1………………………………….WHO WE SERVE ………………….….FINANCIAL … · Texas Department of Workers’ Compensation. This designation means that the Pool

1………………………………….WHO WE SERVE

2………………….….FINANCIAL HIGHLIGHTS

3…………………….……BOARD OF TRUSTEES

4……………………LETTER FROM THE CHAIR

5……………...AUDITOR’S OPINION LETTER

7………..MANAGEMENT’S DISCUSSION & ANALYSIS

21…………….……GASB 31 EXPLANATIONS

25………………………………….REINSURANCE

26…………….……FINANCIAL STATEMENTS

67………………..ORGANIZATIONAL CHART

68………………….……..POOL MEMBERSHIP

WHO WE SERVE

The Pool is an intergovernmental, risk-sharing partnership, formed in 1974 by the members of the Texas Municipal League for the purpose of offering workers’ compensation, liability, and property protection to Texas political subdivisions including:

Cities • Housing Authorities • Municipal Utility Districts • Water & Irrigation Districts • Tax Appraisal Districts • Fire Districts/Emergency Service Districts • Hospital Districts • Transit Authorities • Councils of Government • 911 Districts • Drainage Districts • Flood Control Districts • Navigation Districts & Authorities • Public Utility Boards • River Authorities • Airports • Downtown Management & Improvement Districts • Conservation & Reclamations Districts • MHMR Districts • Toll Road Authorities • Library Districts

GOVERNANCEThe Pool’s mission, objectives, and overall policy governance is set by the Board of Trustees, who are elected and appointed officials that represent the membership.

CORE VALUESThe Pool adheres to the following four core values to fulfill its mission:

• Fiscal Responsibility• Integrity• Operational Excellence• Public Service

Cities, 77.4%

ESD & 911 Districts, 1.1%

Appraisal Districts, 1.0%

Housing Authorities, 5.6%

Water Districts & MUDs, 5.4%

Councils of Government, 1.0% Hospital & Health, 1.4%

Transit Authorities, 2.8%

Contributions $190,092,657 at September 30, 2018

Total Members - 2,827

MISSION STATEMENT

The Mission of the Texas Municipal League Intergovernmental Risk Pool is to offer and provide Texas municipalities and other units of local government with a stable and economic source of risk financing and loss prevention services.

OBJECTIVES• Educate members about avoiding and reducing risks• Control losses with effective legal defense and claims handling• Anticipate emerging risks• Be aware of and anticipate emerging state and national trends• Provide appropriate coverages that meet the needs of the Pool’s members• Serve as an expert source of information on risk management for cities, other units of local government, and the

Texas Municipal League• Develop, train, and retain highly qualified staff

9/30/18 9/30/17 Amount Percent

Revenues

Total Contributions (gross of reinsurance expense) 190,092,657$ 179,896,045$ 10,196,612$ 5.7%

Investment Income* 20,907,902 20,530,234 377,668 1.8%

Other Income 368,265 182,217 186,048 102.1%

Total Revenues 211,368,824$ 200,608,496$ 10,760,328$ 5.4%

Expenses

Total Claim Losses 145,068,267$ 168,754,743$ (23,686,476)$ -14.0%

Reinsurance Expense 10,458,978 9,943,804 515,174 5.2%

Pension and OPEB Expenses 3,192,866 5,128,522 (1,935,656) -37.7%

Administrative Expenses & Contract Service Fees 39,953,715 38,878,610 1,075,105 2.8%

Total Expenses 198,673,826$ 222,705,679$ (24,031,853)$ -10.8%

Revenues Over (Under) Expenses 12,694,998$ (22,097,183)$ 34,792,181$ -157.5%

Adjustment to (Return of) Members' Equity - (20) 20 -100.0%

Revenues Under Expenses (After Adjustment to Equity) 12,694,998$ (22,097,203)$ 34,792,201$ -157.5%

Total Assets and Deferred Outflows** 696,985,851$ 707,067,386$ (10,081,535)$ -1.4%

Total Liabilities (340,313,698) (362,534,947) 22,221,249 -6.1%

Total Net Position** 356,672,153$ 344,532,439$ 12,139,714$ 3.5%

*Excludes Changes in Unrealized Losses of ($25,765,068) and ($19,215,285) for 2017-18 and 2016-17, respectively.

restricted net position of $13,820,225 and $13,647,822 for 2017-18 and 2016-17, respectively.

Financial HighlightsYear Ended Change

**Excludes Cumulative Unrealized (Lossses)/Gains of ($18,744,767) and $7,020,301 for 2017-18 and 2016-17, respectively. Includes

BOARD OF TRUSTEES

J.W. (Buzz) Fullen, Chair

Henderson HA

Place 2

Leo Montalvo

McAllen

Place 5

Carol Loughlin

Dallas

Place 10

Bennett Sandlin

Austin

TML Representative

Randy Criswell, Vice Chair

Canyon

Place 11

Mary Gauer

Central Texas COG

Place 6

Bert Lumbreras

San Marcos

Place 12

Henry Wilson

Hurst

TML Representative

Robert T. Herrera

Cibolo

Place 1

Mary M. Dennis

Live Oak

Place 7

Byron Black

Johnson County CAD

Place 13

Michael Smith

Jacksboro

TML Multistate IEBP

Representative

Jeffrey Snyder

Plainview

Place 3

Larry Melton

Odessa HA

Place 8

David Harris

Balcones Heights

Place 14

Peter H. Vargas

Allen

Place 4

Andres Garza, Jr.

Wharton

Place 9

Rickey Childers

Lancaster

Place 15

LETTER FROM THE CHAIRMembers,

We are pleased to report that the 2017-18 fiscal year was one filled with accomplishments. Most notably, after enduring Hurricane Harvey, the worst natural disaster in Texas’ history, by year-end nearly 80% of the members’ claims had been closed, with the remaining 20% under an advanced phase of repair. This was an enormous feat and illustrates the value of having a diverse partnership of members from across the state, a financially sound risk pool, and a staff dedicated to providing exceptional service.

In addition to the Pool’s focused response to Harvey, other initiatives continued. A few years ago, the Pool embarked on a program to replace its legacy business systems and technologies with advanced, efficient, and more powerful data-driven systems. This has led to an investment of over $20 million intended to better serve the membership. Throughout the fiscal year the Pool has been developing and installing the best in class underwriting, billing, financial, human resources/payroll, and medical bill review systems. A couple of these systems are already online and the remaining systems are on track to be operational in early 2019. A new, informative, and user-friendly website and member portal was also launched in mid-September. Through enhanced data analysis and reporting and increased efficiencies, the Pool and its members are already realizing the benefit and value from this investment.

Over the prior two years, on average, the Pool paid $162 million per year in claim losses. In 2017-18, primarily because of Hurricane Harvey, losses increased by 33% to almost $216 million. Even with the sharp spike in property claims, and with all of the other operational improvements noted above, the Pool continued to enhance its services through better and coordinated communications, member-focused regional meetings, a new property appraisal initiative, and the overall strengthening of the Pool through coverage improvements.

The Pool ended the 2017-18 fiscal year with a $12.7 million increase in equity. To ensure its continued financial strength and long-term stability the Pool had its Target Fund Balance Review updated. As that study concluded, the Pool took full advantage of the capacity available in the reinsurance market and was able to rebalance its capital requirements. In addition to assuring that the Pool’s equity was within the target range, those actions allowed the Pool to both grow its equity and provide an additional $100 million in property reinsurance coverage.

In the Workers’ Compensation program, the Pool continued to receive the “High Performer” designation from the Texas Department of Workers’ Compensation. This designation means that the Pool consistently initiates indemnity benefits and pays medical bills within the timeframes prescribed by statute. The Political Subdivision Workers’ Compensation Alliance (Alliance), of which the Pool is a founding member, again received the highest or second highest ratings among every category as measured by the Texas Department of Insurance. These scores indicate that the Pool and its members continue to provide the highest quality of health care to the members’ employees and that these initiatives to aid injured employees in their recovery are successful.

Based on the Pool’s financial and operational results, the Pool continues to meet its mission of providing its members with a long-term, stable and economic source of risk financing and loss prevention services.

It is with pride that the Board of Trustees and staff present the 2017-18 annual financial report.

John (Buzz) Fullen

Chair, Board of Trustees

Texas Municipal League Intergovernmental Risk PooL

+JohnsonLambert.com

Report of Independent Auditors

Board of Trustees Texas Municipal League Intergovernmental Risk Pool

We have audited the accompanying financial statements of each major fund of the Texas Municipal League Intergovernmental Risk Pool (the “Pool”), which comprise the statements of net position as of September 30, 2018 and 2017 and the related statements of operations and changes in net position and cash flows for the years then ended and the related notes to the financial statements.

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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of 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 Pool’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 Pool’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.

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial positions of each major fund of the Pool as of September 30, 2018 and 2017, and the respective results of operations and cash flows thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion & Analysis 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.

Our audit was conducted for the purpose of forming an opinion on the financial statements of the Pool’s major funds. The ten-year claims development information, schedule of the changes in net pension liability and related ratios and the schedule of employer pension contributions are 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. The required supplementary information is 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 information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

December 14, 2018

Management’s Discussion and Analysis

The Texas Municipal League Intergovernmental Risk Pool (Pool) provides this narrative overview and analysis of the financial activities of the Pool for the fiscal year ended September 30, 2018. Information presented herein should be considered in conjunction with additional information provided in the Financial Statements & Required Supplementary Information section, which is found on page 24 of this report.

PURPOSE AND CORE STRATEGY

The Pool’s purpose is to provide a partneship with local government so that Texas communities are stronger together. The Pool provides its members with a stable and economic source of financing for their workers’ compensation, liability, and property risks, and provides meaningful loss prevention services. The core strategy includes assisting members with implementing programs that avoid or reduce risk, providing exceptional professional claims handling service once losses occur, and maintaining financial strength through strong underwriting, appropriate reserving, and the application of sound financial practices.

FINANCIAL STATEMENT PRESENTATION

This report presents financial information in two ways. The audited financial statements presented in this annual report comply with the Governmental Accounting Standards Board (GASB) Statement 31, which requires the Pool to report unrealized investment gains and losses as part of the Pool’s financial results. The Pool makes all of its management decisions without considering unrealized gains or losses. Unrealized gains and losses are “paper” gains and losses caused by fluctuations in the market price of securities. Since the Pool generally has the intent and ability to hold investments until maturity, unrealized gains and losses do not impact the financial position of the Pool. To provide a clear understanding of the Pool’s financial operational position, this report also includes a section titled GASB 31 Explanations. This section provides a comparison of the Financial Statements with and without GASB 31. In the analysis below, italicized sentences indicate amounts that are exclusive of unrealized gains or losses, otherwise, unless so indicated, amounts recorded include unrealized gains and losses.

FINANCIAL HIGHLIGHTS AS OF SEPTEMBER 30, 2018

• The Pool’s net position was $337.9 million compared to $351.6 million at September 30, 2017,a decrease of $13.7 million. At September 30, 2017, net position decreased $41.3 million fromthe September 30, 2016 level of $392.9 million. The trend in net position from 2016 to 2018was primarily impacted by an extraordinary amount of flood, hurricane, and hail losses andunrealized losses resulting from a rising interest rate environment. Other factors affecting netposition included the reserving for the uncertainty in the interpretation of cancer presumptionworkers’ compensation statutes, positive changes in the Pool’s property coverages that limit

the Pool’s exposure to flood, and the inclusion of property values that were previously not reported or under reported.

• This year, gross earned contributions increased by $10.2 million to $190.1 million. Gross contributions were $179.9 million and $169.4 million in 2017 and 2016, respectively. During 2018 and 2017, the Pool experienced unrealized investment losses of $25.8 million and $19.2 million, respectively, which caused total revenues to decrease (unrealized gains of $7.9 million in 2016). Without the effects of unrealized investment gains/losses, the positive trend of total revenues that is primarily driven by the increase in gross earned contributions is more apparent. Total revenues without unrealized gains/losses for 2018, 2017 and 2016 were $211.4 million, $200.6 million, and $189.3 million respectively. Investment interest income increased to $24.3 million compared to $24.1 million and $24.0 million in 2017 and 2016, respectively. Interest rates rose during 2018 causing the fair value of the Pool’s investments to decrease. The investment income (change in fair value, including amortization and net realized gains) was ($29.1) million compared to ($22.8) million and $3.9 million in 2017 and 2016, respectively. Combining interest income and the change in value, total investment income was ($4.9) million in 2018, compared to $1.3 million and $27.9 million in 2017 and 2016, respectively.

• The Pool maintained a strong investment base even after paying claims for Hurricane Harvey, the Pool’s largest loss ever. Cash, investments and accrued investment income was $645.5 million, $686.9 million, and $689.2 million in 2018, 2017 and 2016, respectively.

• Total net incurred losses and loss adjustment expenses were $145.1 million, a decrease of $23.7 million or 14% under the previous year (net incurred losses were $168.8 million in 2017 and $167.7 million in 2016). Losses in the Workers’ Compensation Fund decreased by $3.7 million, but the Pool increased the reserve redundancy to $8.0 million due to the significant flat long development tail and the risk of open medical claims in older accident years. Losses in the Liability Fund were slightly higher than the previous year and in this Fund, the Pool retained $1.1 million in reserve redundancy. Losses in the Property Fund were only $354,462 higher than the previous year. Losses in the Reinsurance Fund decreased by $22.6 million, from $38.1 million in 2017 to $15.5 million in 2018. Total property losses (net of outside reinsurance) in 2018 were $53.5 million compared to $75.4 million in 2017, a decrease of $21.9 million or 29% from the previous year. Losses over the past three years have been impacted by more frequent and severe weather-related storm occurrences and a large liability loss. The pure loss ratio (total losses/net contributions) for the current year for all funds was 80.8% compared to 99.3% and 103.1% in the previous two years.

OVERVIEW OF THE FINANCIAL STATEMENTS

The discussion and analysis provided herein is to serve as an introduction to the Pool’s financial statements. The Pool’s financial statements consist of three components: 1) basic financial statements, 2) notes to financial statements, and 3) required supplementary information. The supplementary information is intended to furnish additional detail to support the basic financial

statements themselves. The combined financial statements are designed to provide readers with a broad overview of the Pool’s finances.

Fund Accounting and Financial Statements. The Pool has six operating funds that are accounted for as self-sustaining business-like activities or enterprise funds. The Pool's six funds are the Workers' Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds that by policy are classified as major funds. Each fund is presented separately with comparative data from the previous year.

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 Pool, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The Workers ' Compensation, Liability, Property and Coastal Storm Funds are the only funds that receive contributions from participating members. The Pool's other two funds primarily serve special operational functions that include excess loss coverage, large loss frequency and high severity coverage through the Reinsurance Fund, and a reserve for unallocated loss adjustment expenses and pension liability items through the Stability Fund. All funds incur a monthly allocation of administrative expenses.

The Pool adopts an annual appropriated budget for each fund that is aggregated to comprise the combined fund budget. A budgetary comparison statement has been provided for the combined fund to demonstrate compliance with this budget.

The Statement of Net Position presents financial information on all of the Pool’s assets, liabilities, and deferred inflows/outflows of pension resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of the financial position of the Pool.

The Statement of Operations and Changes in Net Position shows how the Pool's Net Position has changed during the two most recent fiscal years. All changes in Net Position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will result in cash flows in future fiscal periods (for example, accrued investment income and contract service fees payable). All interrelated balances and transactions have been eliminated and are presented in a separate column.

The Statement of Cash Flows, utilizing the direct method, shows actual cash received and used by the Pool during the year and presents a reconciliation of revenues over expenses to net cash provided by operating activities.

The Pool-wide financial statements can be found on pages 24 of this report.

FINANCIAL ANALYSIS FOR THE POOL

Assets & Deferred Charges and Liabilities. Along with assets and liabilities on the Statement of Net Position, the Pool reports deferred charges (Deferred Outflows of Pension Resources) in accordance with GASB 68, Accounting and Financial Reporting for Pensions. Total assets and deferred outflows were $678.2 million, $714.1 million and $714.5 million in 2018, 2017, and 2016, respectively. The percentage of cash, investments and accrued investment income to total assets and deferred charges remained relatively consistent at 95.2%, in 2018, 96.2% in 2017, and 96.4% in 2016. The types of securities that the Pool can invest in are limited by state law. Those investment instruments and other management, reporting and training requirements are specifically addressed in the State of Texas Public Funds Investment Act (see Note 4) and are included in the Pool’s Investment Policy. Finally, due to favorable investment results at the Texas Municipal Retirement System (TMRS), the Pool reported a Net Pension Asset of $5.0 million in 2018, compared to Net Pension Liabilities of $3.8 million and $2.6 million in 2017 and 2016, respectively.

Total liabilities decreased to $340.3 million from $362.5 million in 2017 ($321.7 million in 2016). Total liabilities were lower in 2018 due primarily to decreases in investment trade payables, reinsurance payables (and deposits), and the net pension liability. Loss reserves account for the majority of the Pool’s liabilities. Reserves for estimated ultimate net unpaid losses and loss adjustment expenses (loss reserves), were $315.3 million, $319.2 million, and $284.6 million for 2018, 2017, and 2016, respectively (accounting for 92.7%, 88.0%, and 88.5% of total liabilities, respectively). Other items impacting loss reserves were an increase in the Unallocated Loss Adjustment Expense (ULAE) Reserve and the normalizing of the discount rates for certain workers’ compensation reserves.

2018 2017 2016 2015 $ Change % Change $ Change % Change $ Change % ChangeREVENUESEarned contributions $190,093 $179,896 $169,338 $163,418 $10,197 5.7% $10,558 6.2% $5,921 3.6%Reinsurance expense (10,459) (9,944) (6,741) (7,032) (515) 5.2% (3,203) 47.5% 291 -4.1%Investment income (w/unrealized gains/(losses)) (4,857) 1,315 27,860 26,383 (6,172) -469.4% (26,546) -95.3% 1,478 5.6%Other revenues 368 182 52 181 186 102.1% 130 249.1% (129) -71.2%

TOTAL REVENUES 175,145 171,449 190,510 182,950 3,695 2.2% (19,061) -10.0% 7,560 4.1%

EXPENSESNet losses and loss adjustment expenses 145,068 168,755 167,671 128,563 (23,686) -14.0% 1,084 0.6% 39,107 30.4%G&A, Pension and Contract Service Fees 43,147 44,007 44,607 40,325 (861) -2.0% (600) -1.3% 4,282 10.6%

TOTAL EXPENSES 188,215 212,762 212,278 168,889 (24,547) -11.5% 484 0.2% 43,389 25.7%Cumulative effect of change in accounting principles - - - 9,208 - - - - 9,208 100.0%Return of net position (equity) - - 18 1,644 - - (18) - (1,626) -98.9%TMRS Contribution - -

CHANGE IN NET POSITION (13,070) (41,312) (21,750) 24,913 28,242 -68.4% (19,562) 89.9% (46,663) -187.3%Prior Period Adjustment -OPEB (555) - - - - - - - - -Net Position BEGINNING OF YEAR 351,553 392,865 414,615 389,702 (41,312) -10.5% (21,750) -5.2% 24,913 6.4%

END OF YEAR 337,927 $351,553 $392,865 $414,615 $(13,625) -3.9% $(41,312) -10.5% $(21,750) -5.2%

2018 2017 2016 2015 $ Change % Change $ Change % Change $ Change % ChangeASSETS AND DEFERRED OUTFLOWSCash, investments and accrued interest $645,472 $686,902 $689,242 $685,403 $(41,430) -6.0% $(2,340) -0.3% $3,839 0.6%Capital assets 11,158 7,162 5,814 6,307 3,996 55.8% 1,348 23.2% (493) -7.8%Other assets 16,842 11,076 9,211 10,079 5,766 52.1% 1,865 20.2% (868) -8.6%Net pension asset 5,006 - - 4,380 5,006 - - - (4,380) -100.0%Deferred outflows of pension resources (236) 8,948 10,266 3,351 (9,184) -102.6% (1,319) -12.8% $6,916 206.4%

TOTAL ASSETS AND DEFERRED OUTFLOWS 678,241 714,088 714,533 709,520 (35,847) -5.0% (446) -0.1% 5,014 0.7%

LIABILITIESEstimated ultimate unpaid losses & loss adjustment expenses (net) 315,256 319,210 284,628 258,561 (3,954) -1.2% 34,582 12.1% 26,067 10.1%Payables 1,600 4,331 13,618 17,014 (2,731) -63.0% (9,287) -68.2% (3,396) -20.0%Other liabilities 23,458 35,232 20,836 19,330 (18,854) -53.5% 14,396 69.1% 1,506 7.8%Net pension liability - 3,762 2,587 - (3,762) -100.0% 1,176 45.5% 2,587 100.0%

TOTAL LIABILITIES 340,314 362,535 321,668 294,905 (29,301) -8.1% 40,867 12.7% 26,764 9.1%

NET POSITIONInvested in capital assets 11,158 7,162 5,814 6,307 3,996 55.8% 1,348 23.2% (493) -7.8%Restricted 13,820 13,648 12,380 12,431 172 1.3% 1,268 10.2% (51) -0.4%Unrestricted 312,949 330,743 374,672 395,877 (17,794) -5.4% (43,929) -11.7% (21,206) -5.4%

TOTAL NET POSITION 337,927 $351,553 $392,865 $414,615 $(13,625) -3.9% $(41,312) -10.5% $(21,750) -5.2%

2018-2017 2017-2016 2016-20152018 2017 2016 2015 $ Change % Change $ Change % Change $ Change % Change

Net cash provided(used) by operating activities* (5,485) $28,782 $5,137 $16,169 -34,267 -119.1% $23,644 460.2% (11,031) -68.2%Net cash (used) by capital and related activities (4,768) (2,088) (323) (268) (2,680) 128.3% (1,765) 546.4% (56) 20.7%Net cash (used) provided for investing activities 2,770 (25,718) (8,433) 5,401 28,488 -110.8% (17,285) 205.0% (13,834) -256.1%Net (decrease) increase in cash and cash equivalents (7,483) 976 (3,618) 21,303 (8,459) -866.5% 4,595 -127.0% (24,921) -117.0%Cash and cash equivalents (beginning of year) 30,610 29,634 33,252 11,949 976 3.3% (3,618) -10.9% 21,303 178.3%Cash and cash equivalents (end of year) 23,127 $30,610 $29,634 $33,252 $(7,483) -24.4% $976 3.3% $(3,618) -10.9%* Includes investment interest received of $24,277,088, $23,717,056, and $23,770,635 for the years ended September 30, 2018, 2017 and 2016, respectively.

SUMMARY COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN NET POSITION AS OF SEPTEMBER 30, 2018, 2017, 2016, AND 2015 (In Thousands) 2018-2017 2017-2016

SUMMARY COMPARATIVE STATEMENT OF CASH FLOWSAS OF SEPTEMBER 30, 2018, 2017, 2016, AND 2015 (In Thousands)

2016-2015

AS OF SEPTEMBER 30, 2018, 2017, 2016, AND 2015 (In Thousands) 2018-2017 2017-2016 2016-2015SUMMARY COMPARATIVE STATEMENTS OF NET POSITION

Net Position. Over the past three fiscal years, the growth trend of net position has been impacted by an extraordinary amount of weather-related losses, including Hurricane Harvey in August of 2017, the uncertainty of the impact of possible legislative or judicial changes to workers’ compensation statutes related to cancer presumption, and a change in fair value of investments (including unrealized investment losses) of ($29.1) million in 2018 and ($22.8) million in 2017 (there was a gain of $3.9 million in 2016). At the end of the current fiscal year, the Pool reported a combined net position of $337.9 million compared to $351.6 million and $392.9 million in 2017 and 2016, respectively.

As a result of the unrealized losses, in 2018, each Fund, with the exception of the Property Fund, used a portion of its net position. Without including unrealized losses, five funds increased net position and one fund (Reinsurance Fund) used net position. The use of equity in the Reinsurance Fund was a direct result of losses resulting from Hurricane Harvey. On a combined basis in 2018, the Pool used $13.1 million of net position. In 2017 and 2016, the Pool used $41.3 million and $21.8 million of net position, respectively. When excluding unrealized investment losses, the change in net position was $12.7 million, ($22.1) million, and ($29.7) million for 2018, 2017, and 2016, respectively.

In 2013-14, the Pool established policies for determining net position adequacy levels on both a combined and individual fund basis for the Workers’ Compensation, Liability and Property Funds (see Note 2). In April 2018, subject to the inclusion of the effects of the Pool’s new reinsurance structure, the Board adopted the 50/50 target equity blended approach as outlined in PricewaterhouseCoopers’ 2017 Target Fund Balance Review. In July 2018, with the new reinsurance structure incorporated, the minimum of the combined fund target equity range was set at $319.1 million and the maximum at $475.2 million. The Pool ended the 2018 fiscal year with $337.9 million, which is above the target equity minimum on a combined fund basis.

Contributions. The Pool receives contributions from eight different major types of local government, with cities providing 77.4% of the funds. Contributions are received from members to provide coverages for various risks. Coverages are rated for each individual member based on established rates and adjusted by experience modifiers to reflect the actual loss experience of the member. The experience modifier is based on prior experience, adjusted by certain factors. For the Workers’ Compensation Fund, a 20% discount is also applied that reflects the experience of the Fund as a whole. Member contribution ratings are accomplished by the Pool's Underwriting

2017-18 Earned Contributions - $190,092,657

Cities 77.4%ESD & 911 Districts 1.1%Appraisal Districts 1.0%Housing Authorities 5.6%Water Districts & MUDs 5.4%Councils of Government 1.0%Hospital & Health 1.4%Transit Authorities 2.8%Other 4.3%TOTAL 100.0%

Department which assigns each member to one of its staff underwriters. Required contributions are billed and subsequently collected through the Pool's Finance Department.

For the fiscal year ended September 30, 2018, the Pool reported gross earned contributions of $190.1 million. From the previous year, gross earned contributions increased by $581,923 in the Workers' Compensation Fund, increased by $1.8 million in the Liability Fund, increased by $8.0 million in the Property Fund, and decreased by $204,478 in the Coastal Storm Fund.

The contribution increases in the Property Fund were due primarily to exposure growth, changes in rates, and new polices that cap exposures based on member declared property values that led to valuation increases by the members. There was little change for overall workers’ compensation rates with some rate modifications for various class codes and a slight technical change in the experience modification formula. Payroll exposure increased by $261.9 million to $5.3 billion. Workers’ Compensation audits added $1.5 million as compared to $2.4 million in the prior year. In the Liability Fund there was an overall increase of 3.7% in contributions due to the cumulative changes in rates (increases and decreases) for the various lines of coverage.

Investment income. Investing is a primary ongoing operation of the Pool, and it is the Pool's policy to consider investment income as an important component of operating income. Interest earnings from governmental bonds are the Pool's chief source of investment income. From time to time, some gains from the sale of investments may be realized due to the Pool or one of its contracted investment managers adjusting investments to market conditions. The Pool's policy is to hold investments until maturity. The Pool does not engage in the practice of buying or selling investments to produce income from realized gains. The Pool complies with the provisions of GASB 31 by reporting unrealized gains or losses on investments as an income item.

The Pool's position is that unrealized gains or losses are not actual funds received or lost, and therefore, the Pool considers the unrealized gain or loss separately.

The two components of investment income are (1) interest income and (2) change in fair value. The Pool earned $24.3 million in interest income for 2017-18, compared to $24.1 million and $24.0 million in 2017 and 2016, respectively. Investment income (change in fair value) contains the unrealized portion of the fair value change, any realized gains and losses experienced during the year, and amortization of discounts/premiums. Due to fair value volatility, the Pool makes financial decisions based on investment income excluding unrealized gains and losses.

Investment income, excluding unrealized gains and losses, was $21.0 million, which was $377,668 more than the previous year. Net realized gains were $726,021 million and unrealized losses were ($25.8) million.

Claim payments and reserves. The Pool processes claims and pays for covered losses experienced by its members in-house. Outside claims adjusters, attorneys, medical experts, and other professionals are contracted on an as needed basis. Between the time a claim is reported and the time it is resolved, reserves are established for the estimated amount that will have to be paid at some future date to settle the loss.

In the Workers' Compensation, Liability, Property and Reinsurance Funds, reserves are also established for claim losses that have occurred, but are unknown and not yet reported to the Pool. These reserves known as IBNR (incurred but not reported) also include future development of reported or known losses based on historical development patterns. Reserves are also maintained in the Coastal Storm Fund for reported losses, in the Workers’ Compensation Fund (previously reported in the Lifetime Benefits Fund) for the annuity type payments associated with workers' compensation fatality claims, and in the Stability Fund, which maintains reserves for unallocated loss adjustment expenses.

The reserve for unallocated loss adjustment expenses are costs that would be included for the continued administration of claims in the event that the Pool would cease to provide coverage. Initiating, and the subsequent adjusting of reserves, allows a matching process of current-year expenses with current-year revenues. The target for the reserve for unallocated loss adjustment expense was increased during 2017-18 by $3.6 million to $8.9 million. $1.2 million of the increase was reported in 2018 and the remaining increase will be spread over the next two years. The reserve was $5.3 million for fiscal year ending 2017 and $5.0 million for 2016.

OPERATING RESULTS – BY FUND

Workers’ Compensation Fund. This fund produced revenues of $64.5 million and had losses and expenses of $67.7 million of which, $46.8 million were from losses. Revenues were lower than last year due to lower investment income and total expenses were lower than last year due to lower losses. This fund began the fiscal year with $96.2 million in net position and ended the year with $91.9 million. Without including unrealized gains/losses, the fund began the year with $93.7 million and ended the year with $99.1 million.

Liability Fund. The Liability Fund began the 2017-18 fiscal year with $98.8 million in net position, produced $47.2 million in revenue and had operating losses and expenses of $53.3 million. Claim losses were $42.7 million. This was an increase of $1.4 million over the amount of losses in the previous year. This fund ended the fiscal year with $92.4 million in net position. Without including unrealized gains/losses, the fund began the year with a net position of $96.8 million and ended the year with $97.9 million.

Property Fund. The Property Fund produced revenues of $55.3 million, and recorded operating losses and expenses of $48.6 million. Including unrealized investment gains and losses, the fund gained $6.6 million of net position. Through the Pool's hybrid reinsurance structure, some of the losses were allocated to the Reinsurance Fund while others were recoverable from the reinsurers. In addition, the Fund's financial results reflect the transfer of $1.4 million for reinsurance reinstatement premiums to the reinsurers, and $0.4 million of reinstatement contributions to the Reinsurance Fund. The fund began the year with $48.1 million and ended the year with $54.4 million. Without including unrealized gains/losses, the fund began the year with $47.3 million in net position and ended the year with $56.3 million.

Total Property Losses. Total property losses (without IBNR) in 2017-18 were $101.9 million with most of the increase being ceded (transferred) to the external reinsurers and the Reinsurance Fund. Total property losses were $106.6 million and $84.2 million in 2016-17 and 2015-16, respectively. In 2017-18, the Pool incurred seven property loss occurrences (property loss or group of property losses that equal or exceed $1 million); five flood and hail occurrences and two fire occurrences that spanned the entire State. The Pool incurred seven occurrences in 2016-17 and thirteen occurrences in 2015-16. At September 30, 2018, the total loss (paid and reserve) for Hurricane Harvey was $114.9 million. This was the largest loss the Pool has ever experienced.

Coastal Storm Fund. There were no major storms that affected the Coastal Storm Fund. The fund did not have any incurred losses in the current year and some positive development in prior year’s loss. The fund produced revenues over (under) expenses of ($4,057) and net position at the end of the 2017-18 fiscal year was $11.6 million. Without including unrealized gains/losses, the fund began the year with $11.5 million in net position and ended the year with $11.9 million.

Reinsurance Fund. As a result of Hurricane Harvey and other property losses, the Reinsurance Fund absorbed the greatest amount of the property losses and used approximately $8.2 million of net position. Revenues were $8.4 million and losses and expenses were $16.6 million. This fund ended the 2017-18 fiscal year with $65.3 million in net position. Without including unrealized gains/losses, the fund began the year with $72.1 million in net position and ended the year with $68.4 million.

Stability Fund. The Stability Fund began the fiscal year with $23.4 million in net position. Expenses exceeded revenues by $2.2 million. The Fund’s negative results were primarily due to the pension expense and the increase in the ULAE reserve. However, the deficit was offset by net position transfers from the other funds of $544,986 for the pension expense and $1.2 million

for the ULAE reserve increase. The ending net position balance was $22.3 million. Without including unrealized gains/losses, the fund began the year with $23.1 million and ended the year with $23.1 million. In 2018, the Pool implemented Governmental Accounting Standards Board (GASB) Statement No. 75 Accounting and Financial Reporting of Postemployment Benefits Other Than Pensions (other postemployment benefits or OPEB) (see Note 11). The Pool provides a defined benefit group-term life insurance through TMRS for active employees and retirees. The OPEB liability of $652,046 and 2018 expense of $51,987 is accounted for in the Stability Fund.

Administrative expenses and contract service fees. The Pool incurs administrative expenses and contract service fees which are budgeted and monitored on a monthly basis for compliance with budgetary limits. In 2017-18, 67.8% of all administrative expenses were personnel related, such as salaries, wages, and benefits. The remaining 32.2% includes depreciation, office supplies, postage, phone service, utilities, and similar costs. Contract service fees include outside adjuster fees, workers' compensation medical containment fees, and contracted claims management software maintenance.

In total, the General and Administrative (G&A) expenses, pension expenses and Contract Services fees were $43.1 million (compared to $44.0 million last year). Administrative expenses (excluding pension and contract services) were $36.4 million, an increase of 2.3% over the previous year. The moderate increase in G&A expenses reflects the capitalization of certain project-related costs and vacant personnel positions during the year. Contract service fees were $3.6 million compared to $3.3 million last year. The increase in contract services was primarily due to additional software maintenance fees. Pension expense was $3.1 million compared to $5.1 million last year due to positive investment results at TMRS.

Capital assets. For the year ended September 30, 2018, the Pool’s investment in capital assets was $11.2 million. This is net of accumulated depreciation. The Pool's investment in capital assets includes land, building, property improvements, computer systems, vehicles, and office furniture and equipment. The notes to the financial statements contain a more detailed description of the capital assets and the Pool’s capitalization policy.

The Pool had no existing or pending long-term or short-term debt financing activities for the current or preceding fiscal year. The Pool could, if needed, utilize debt financing; however, in its 44-year history, the Pool has not used debt financing as a means to fund any portion of the Pool'sinitial or ongoing operations.

Budget comparison. In the preceding sections, the Pool addressed the operating results of the 2017-18 fiscal year. Below is a chart comparing the budget to actual expenses. The budget and actual results exclude the effects of the change in unrealized gains and losses.

Financial Statements and Notes to the Financial Statements. The financial statements of the Pool have been prepared using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental entities. The notes, beginning on page 32, provide additional information that is integral to a full understanding of the financial information presented in the financial statements.

Required supplementary information. In addition to the basic financial statements and accompanying notes, this report presents information regarding the Pool’s ten-year claims development history. Setting member contribution rates to cover the assumed risk of possible future loss occurrences are largely guided by historical claims development. Analysis of trends in claims development indicates whether losses are increasing, decreasing or static. Also included in the required supplementary information section, are the schedules of change in net pension liability, and employer pension contributions. Required Supplementary Information is located on pages 56.

SIGNIFICANT EVENTS DURING 2017-18

Hurricane Harvey. On August 25, 2017, Hurricane Harvey made landfall. The hurricane created extensive damage to some of the coastal and inland areas in east Texas, however, because the bands of rain remained stationary over east Texas for several days, at times dropping over 50 inches of rain, the region between Victoria and Port Arthur incurred extensive flood losses. At September 30th, the estimated gross loss was $115 million with the Pool retaining $38.0 million and the reinsurers retaining $77.0 million. Through September 30, 2018, the Pool has paid $64.7 million for these losses.

Replacement of business operations software. The Pool has made significant progress in implementing the Finance & Human Resources/Payroll, Member Billing, Underwriting Policy, and Medical Bill Review software applications. The Finance and Human Resource software development and installation began in March 2017 and went live in October 2018. Extensive work has been completed on the Medical Bill Review application and that project is projected to be operational in January 2019. The Underwriting Policy and Member Billing projects began in August 2017 and are projected to go on-line on March 31, 2019. In addition, a new informative and user-friendly website that provides a portal for Pool’s members went on-line in September 2018.

Provided members with additional property coverage. In May 2018, the Board authorized the purchase of an additional $100 million in reinsurance property coverage. The Pool now purchases $250 million in property reinsurance coverage.

Reserve redundancy and incurred but not reported (IBNR) reserves. The Pool increased the reserve redundancy in the Workers’ Compensation Fund to $8.0 million due to the significant flat long development tail and the risk of open medical claims in older accident years. The Pool decreased the redundancy in the Liability Fund by $1.4 million, to a total of $1.1 million. Based on the total property loss estimate of $55.1 million, the Pool established negative incurred but not reported (IBNR) losses of $875,000 for non-occurrence claims in the Property Fund and $6.3 million for property occurrence losses including Hurricane Harvey property losses in the Reinsurance Fund. The Pool also included the actuary’s recommendation to maintain the IBNR

for Workers’ Compensation and Liability losses assumed by the Workers’ Compensation Fund at $750,000.

Unallocated Loss Adjustment Expense (ULAE) Reserve. As part of the annual reserve review, the Pool had its actuary review the Pool’s methodology for determining ULAE and provide a recommendation. The actuary recommended that the Pool employ the Paid ULAE to Paid Loss Ratio method. This methodology required the ULAE reserve to increase from $5.3 million to $8.9 million, a $3.6 million increase. In October 2018, the Board approved setting the ULAE reserve target at $8.9 million and for rate stabilization purposes, funding it over a three year period at $1.2 million per year beginning in 2017-18.

Updated the Discount Rate for Workers’ Compensation Lifetime and Death Indemnity Claims. To be effective September 30, 2018, the Board set the discount rate at 4.4% for qualifying Lifetime Income Benefit reserves and death benefit reserves established for the surviving spouse of a non-first responder; and set the discount rate at 3.5% for death benefit reserves established for the surviving spouse of a first responder. The Board also approved the normalization of the discount rates for pre-2013 reserves so that they are accordance with the newly adopted discount policy and increased the target amount of these reserves by $3.3 million, and again, for rate stabilization purposes, to be funded over a three year period at the rate of $1.1 million per year.

Updated the Restricted Members Equity in the Reinsurance for Subsequent Injury Fund (SIF) Losses. Effective for the 2017-18 fiscal year, the Board authorized increasing the restricted equity by $2.0 million from $4.7 million to $6.7 million in Members’ Equity in the Reinsurance Fund should the SIF ever have to partially or totally not reimburse the Pool for SIF losses.

Property Coverage Changes and Property Valuation program. In 2017 and 2018, the Pool implemented several property coverage changes that limit the Pool’s exposure with regards to flood losses and when members under value or do not declare property on their property declaration documents. In addition, the Pool expanded its utility property valuation program, whereby contracted firms conduct expert property valuations on complicated properties, such as water and sewer plants, other utility plants, and other large high value, high risk buildings. This program assists members in accurately recording the value of their facilities for reporting and repair/replacement purposes and the Pool in determining the accurate amount of contribution for those properties.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the Pool's finances. Questions concerning the information provided in this report, or requests for additional financial information, should be addressed to the Chief Financial Officer, Texas Municipal League Intergovernmental Risk Pool, P.O. Box 149194, Austin, Texas 78714-9194.

COMBINED

Net Position Change in Net Position

September 30, 2018 For the year ended September 30, 2018

(With) (Without) (With) (Without)

GASB 31 GASB 31 GASB 31 GASB 31

Total Assets 696,985,851$ 696,985,851$ Contributions and Other Income 190,460,922$ 190,460,922$

Total Liabilities (340,313,698) (340,313,698) Investment Income 20,907,902 20,907,902

Net Position Before GASB 31 356,672,153 356,672,153 Unrealized 2017-18 Losses (GASB 31 adjustment) (25,765,068) -

Unrestricted Net Position 342,851,928 342,851,928 Net Revenues 185,603,756 211,368,824

Restricted Net Position* 13,820,225 13,820,225 Losses and Expenses (198,673,826) (198,673,826) Net Position Before GASB 31 356,672,153 356,672,153 Change in Net Position (13,070,070)$ 12,694,998$

GASB 31 Adjustment (18,744,767) -

Net Position After GASB 31 337,927,386$ 356,672,153$ * Restricted Net Position included $6.7 million for the Subsequent injury Fund obligation, $4.7 million for Deferred Outflow of Pension Resources and $2.4 million for ULAE.

WORKERS' COMPENSATION

Net Position Change in Net Position




Total Assets & Deferred Charges 264,506,558$ 264,506,558$ Contributions and Other Income 68,546,512$ 68,546,512$




Restricted Net Position - Pension & ULAE 2,620,072 2,620,072 Losses and Expenses (69,781,348) (69,781,348)

Net Position Before GASB 31 99,080,638 99,080,638 Revenues (under)/over Expenses (3,221,441) 6,508,548

GASB 31 Adjustment (7,194,703) - Transfer of Equity - Pension & ULAE (1,135,754) (1,135,754) Net Position After GASB 31 91,885,935$ 99,080,638$ Change in Net Position (4,357,195)$ 5,372,794$

LIABILITYNet Position Change in Net Position








Restricted Net Position - Pension & ULAE 892,812 892,812 Losses and Expenses (54,432,123) (54,432,123) Net Position Before GASB 31 97,893,252 97,893,252 Revenues (under)/over Expenses (6,077,961) 1,437,021

GASB 31 Adjustment (5,507,302) - Transfer of Equity - Pension & ULAE (361,053) (361,053) Net Position After GASB 31 92,385,950$ 97,893,252$ Change in Net Position (6,439,014)$ 1,075,968$

PROPERTYNet Position Change in Net Position








Restricted Net Position - Pension& ULAE 954,777 954,777 Losses and Expenses (65,361,797) (65,361,797)

Net Position Before GASB 31 56,296,276 56,296,276 Revenues over Expenses 6,642,219 9,294,531

GASB 31 Adjustment (1,856,820) - Transfer of Equity - Pension & ULAE (273,571) (273,571) Net Position After GASB 31 54,439,456$ 56,296,276$ Change in Net Position 6,368,648$ 9,020,960$

COASTAL STORMNet Position Change in Net Position




Total Assets & Deferred Charges 11,937,836$ 11,937,836$ Contributions and Other Income 241,763$ 241,763$

Total Liabilities (15,952) (15,952) Investment Income 337,758 337,758

Net Position Before GASB 31 11,921,884 11,921,884 Unrealized 2017-18 Losses (GASB 31 adjustment) (454,370) -

Unrestricted Net Position 11,915,496 11,915,496 Net Revenues 125,151 579,521

Restricted Net Position - Pension 6,388 6,388 Losses and Expenses (129,208) (129,208)

Net Position Before GASB 31 11,921,884 11,921,884 Revenues over Expenses (4,057) 450,313

GASB 31 Adjustment (335,736) - Transfer of Equity - Pension 2,234 2,234 Net Position After GASB 31 11,586,148$ 11,921,884$ Change in Net Position (1,823)$ 452,547$

REINSURANCENet Position Change in Net Position


(With) (Without) (With) (Without)GASB 31 GASB 31 GASB 31 GASB 31

Total Assets & Deferred Charges 109,371,155$ 109,371,155$ Reinsurance Revenues 9,560,828$ 9,560,828$ Total Liabilities (41,001,739) (41,001,739) Investment Income 3,237,459 3,237,459


Unrestricted Net Position 61,620,439 61,620,439 Net Revenues 8,423,918 12,798,287 Restricted Net Position - SIF 6,700,000 6,700,000 Losses and Expenses (16,593,400) (16,593,400) Restricted Net Position - Pension 48,977 48,977 Revenues under Expenses (8,169,482) (3,795,113) Net Position Before GASB 31 68,369,416 68,369,416 Transfer of Equity - Pension 23,158 23,158 GASB 31 Adjustment (3,072,450) - Change in Net Position (8,146,324)$ (3,771,955)$ Net Position After GASB 31 65,296,966$ 68,369,416$

STABILITYNet Position Change in Net Position




Total Assets & Deferred Charges 30,262,734$ 30,262,734$ Investment Income 736,476$ 736,476$

Total Liabilities (7,152,046) (7,152,046) Unrealized 2017-18 Losses (GASB 31 adjustment) (1,039,047) -

Net Position Before GASB 31 23,110,688 23,110,688 Net Revenues (302,571) 736,476

Unrestricted Net Position 20,513,489 20,513,489 Losses and Expenses (1,936,778) (1,936,778)

Restricted Net Position - Pension 2,597,199 2,597,199 Revenues under Expenses (2,239,349) (1,200,302)

Net Position Before GASB 31 23,110,688 23,110,688 Transfer of Equity - Pension 1,744,986 1,744,986

GASB 31 Adjustment (777,757) - Prior Period Adjustment - OPEB (555,284) (555,284) Net Position After GASB 31 22,332,931$ 23,110,688$ Change in Net Position (1,049,647)$ (10,600)$

Property & Auto Physical Damage

*A.M. Best Rating applies only to Lloyd’s of London, Bermuda &Domestic, and Beazley.

Liability

Cyber Liability & Data Breach

**or up to member’s chosen limit if higher than $1 million

Workers’ Compensation

Lloyd’s of London; Everest Reinsurance Co.; Endurance Specialty Reinsurance; American

Agricultural Insurance Co.; Partner Reinsurance Company Ltd.; Chubb Tempest Reinsurance; Hiscox Insurance Ltd.; Allied World Assurance Co., Ltd.; Da Vinci Re, Renaissance Reinsurance Ltd.; Lancashire

Insurance Co.,Ltd.; and TMLIRP

$225 million per occurrence in excess of $25 million

*A.M. Best Rating A- & Above

Lloyd’s of London, NLC Mutual Insurance Company, & TMLIRP

$15 million per occurrence in excess of $10 million

*A.M. Best Rating A- & Above

Pool Retention

$10 million per occurrence in excess of member deductibles

TMLIRP Up to $10 million

TMLIRP - $1 million**

Beazley & TMLIRP

75% Quota Share of $50,000 – Beazley

25% Quota Share of $50,000 – TMLIRP

TMLIRP statutory limits

Financial Statements & Required

Supplementary Information

September 30, 2018 & 2017

Texas Municipal League Intergovernmental Risk Pool

TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOLSTATEMENTS OF NET POSITIONAS OF SEPTEMBER 30, 2018 AND 2017

ASSETSCurrent Assets 2018 2017 2018 2017 2018 2017 2018 2017

Cash and cash equivalents 8,876,786$ 11,054,346$ 6,794,879$ 8,753,875$ 2,290,938$ 3,468,510$ 414,228$ 517,268$ Short-term investments 2,810,636 877,376 2,151,447 694,789 725,374 275,294 131,156 41,055 Long-term fixed income investments 234,904,332 234,928,220 179,811,308 186,038,353 60,624,561 73,713,174 10,961,631 10,993,041 Accrued investment income 1,156,497 1,205,434 885,260 954,577 298,472 378,227 53,968 56,407

Total cash, investments, and accrued interest (amortized cost $664,217,196 for 2018 and $679,881,970 for 2017) (notes 3 and 4) 247,748,251 248,065,376 189,642,894 196,441,594 63,939,345 77,835,205 11,560,983 11,607,771

Investment trade receivables 10,065 375,364 7,705 297,249 2,598 117,778 470 17,566 Contributions and other receivables 2,513,608 2,454,630 1,149,771 1,255,400 711,543 537,055 (21,530) (2,346)Reinsurance recoverable on paid losses 69,663 183,303 - - 5,186,914 6,522 - - Prepaid reinsurance - - - - 5,679,725 4,101,723 - -

Total Current Assets 250,341,587 251,078,673 190,800,370 197,994,243 75,520,125 82,598,283 11,539,923 11,622,991Noncurrent Assets

Capital assets (land, building, furniture and equipment) (note 5) 5,299,940 3,401,954 2,649,970 1,700,977 2,649,970 1,700,977 55,789 35,810

Net pension asset - - - - - - - - Other assets (note 6) 550,256 537,366 454,910 448,465 520,513 514,068 - -

Total noncurrent assets 5,850,196 3,939,320 3,104,880 2,149,442 3,170,483 2,215,045 55,789 35,810 Deferred outflows of pension resources 1,120,072 974,651 572,812 487,326 374,777 487,326 6,388 10,259 Deferred outflows of pension resources - OPEB - - - - - - - -

Total Assets and Deferred Outflows 257,311,855$ 255,992,644$ 194,478,062$ 200,631,011$ 79,065,385$ 85,300,654$ 11,602,100$ 11,669,060$

LIABILITIES AND NET POSITIONCurrent Liabilities

Claim Reserves:Reserve for reported claims - net 119,437,376$ 122,721,173$ 69,014,874$ 75,412,599$ 16,666,923$ 16,576,263$ -$ 19,000$

Reserve for incurred but not reported claims - net (note 2) 62,900,000 54,300,000 27,400,000 20,900,000 (875,000) (2,375,000) - -

Reserve for unallocated loss adjustment expense - - - - - - - - Estimated future investment income (26,790,368) (27,642,288) - - - - - -

Estimated ultimate unpaid losses & loss adjustment expenses 155,547,008 149,378,885 96,414,874 96,312,599 15,791,923 14,201,263 - 19,000

Payable to admin. service only contracts 1,600,300 1,599,950 - - - - - -Investment trade payables - 986,251 - 781,006 - 309,455 - 46,150 Outstanding loss drafts 1,252,913 1,240,605 2,241,627 1,216,489 1,897,130 3,206,673 - -Unearned contribution reserve (note 2) 1,228,660 1,403,201 940,286 970,739 2,511,040 2,317,950 15,952 15,939 Reinsurance payable - - 8 14,713 1,929,386 2,681,935 - - Reinsurance deposits for unpaid losses - - - - - 12,000,000 - - Other liabilities (note 2) 2,257,051 1,551,051 725,322 715,715 726,455 717,784 - - OPEB liability (note 11) - - - - - - - - Net pension liability - Pension - - - - - - - -

Total current liabilities 161,885,932 156,159,943 100,322,117 100,011,261 22,855,934 35,435,060 15,952 81,089Noncurrent Liabilities

Funds invested for TML (note 9) 3,539,988 3,589,571 1,769,995 1,794,786 1,769,995 1,794,786 - - Total noncurrent liabilities 3,539,988 3,589,571 1,769,995 1,794,786 1,769,995 1,794,786 - -

Total Liabilities 165,425,920 159,749,514 102,092,112 101,806,047 24,625,929 37,229,846 15,952 81,089NET POSITION

Invested in capital assets (net) - (note 5) 5,299,940 3,401,954 2,649,970 1,700,977 2,649,970 1,700,977 55,789 35,810 Restricted Net Position - Pension (note 10) 1,120,072 974,651 572,812 487,326 374,777 487,326 6,388 10,259 Restricted Net Position - ULAE (note 2) 1,500,000 - 320,000 - 580,000 - - - Restricted Net Position - SIF (note 2) - - - - - - - - Unrestricted Net Position 83,965,923 91,866,525 88,843,168 96,636,661 50,834,709 45,882,505 11,523,971 11,541,902

Total Net Position (includes net unrealized investment (losses)/gains of ($18,744,777) for 2018 and $7,020,301 for 2017) (note 2) 91,885,935 96,243,130 92,385,950 98,824,964 54,439,456 48,070,808 11,586,148 11,587,971

Total Liabilities and Net Position 257,311,855$ 255,992,644$ 194,478,062$ 200,631,011$ 79,065,385$ 85,300,654$ 11,602,100$ 11,669,060$

The accompanying notes are an integral part of these financial statements

LiabilityWorkers' Compensation Coastal StormProperty


September 30, September 30,2018 2017

2018 2017 2018 2017 Current Year Prior Year3,790,768$ 5,676,623$ 959,590$ 1,139,274$ 23,127,189$ 30,609,896$ 1,200,262 450,550 303,833 90,423 7,322,708 2,429,487

100,314,215 120,640,233 25,393,396 24,211,973 612,009,443 650,524,994 493,874 619,016 125,018 124,234 3,013,089 3,337,895

105,799,119 127,386,422 26,781,837 25,565,904 645,472,429 686,902,272

4,298 192,757 1,088 38,685 26,224 1,039,399 - - - - 4,353,392 4,244,739- - - - 5,256,577 189,825- - - - 5,679,725 4,101,723

105,803,417 127,579,179 26,782,925 25,604,589 660,788,347 696,477,958

446,311 286,480 55,789 35,810 11,157,769 7,162,008

- - 5,005,695 - 5,005,695 - - - - - 1,525,679 1,499,899

446,311 286,480 5,061,484 35,810 17,689,143 8,661,90748,977 82,076 (2,408,496) 6,906,184 (285,470) 8,947,822

- - 49,064 - 49,064 -

106,298,705$ 127,947,735$ 29,484,977$ 32,546,583$ 678,241,084$ 714,087,687$

34,551,739$ 43,347,986$ -$ -$ 239,670,912$ 258,077,021$

6,450,000 10,650,000 - - 95,875,000 83,475,000

- - 6,500,000 5,300,000 6,500,000 5,300,000- - - - (26,790,368) (27,642,288)

41,001,739 53,997,986 6,500,000 5,300,000 315,255,544 319,209,733- - - - 1,600,300 1,599,950- 506,459 - 101,644 - 2,730,965 - - - - 5,391,670 5,663,767- - - - 4,695,938 4,707,829- - - - 1,929,394 2,696,648 - - - - - 12,000,000 - - - - 3,708,828 2,984,550- - 652,046 - 652,046 - - - - 3,762,362 - 3,762,362

41,001,739 54,504,445 7,152,046 9,164,006 333,233,720 355,355,804

- - - - 7,079,978 7,179,143- - - - 7,079,978 7,179,143

41,001,739 54,504,445 7,152,046 9,164,006 340,313,698 362,534,947

446,311 286,480 55,789 35,810 11,157,769 7,162,00848,977 82,076 2,597,199 6,906,184 4,720,225 8,947,822

- - - - 2,400,000 - 6,700,000 4,700,000 - - 6,700,000 4,700,000

58,101,678 68,374,734 19,679,943 16,440,583 312,949,392 330,742,910

65,296,966 73,443,290 22,332,931 23,382,577 337,927,386 351,552,740

106,298,705$ 127,947,735$ 29,484,977$ 32,546,583$ 678,241,084$ 714,087,687$


Reinsurance Stability


TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOLSTATEMENTS OF OPERATIONS AND CHANGES IN NET POSITIONFOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017

Operating Revenues 2018 2017 2018 2017 2018 2017 2018 2017Earned Contributions 68,344,215$ 67,762,292$ 49,746,349$ 47,974,888$ 71,760,330$ 63,712,624$ 241,763$ 446,241$ (less: cost of reinsurance - outside reinsurers) - - (442,788) (422,622) (10,016,190) (9,521,182) - - (less: cost of reinsurance - reinsurance fund) (2,103,735) (2,028,384) (718,904) (697,287) (6,734,563) (3,717,051) (3,626) (6,694)

Net Contributions 66,240,480 65,733,908 48,584,657 46,854,979 55,009,577 50,474,391 238,137 439,547

Investment Income (Interest Income) (note 4) 8,988,499 8,778,156 7,013,436 6,934,273 3,264,849 2,784,337 392,045 379,601 Investment Income (Change in Fair Value) (note 4) (10,975,104) (8,277,268) (8,488,136) (6,526,412) (3,104,618) (1,885,928) (508,657) (373,847) Service Fees and Other Income 202,297 107,716 82,513 36,666 83,455 37,835 - - Reinsurance Revenue - - - - - - - -

Total Operating Revenues 64,456,172 66,342,512 47,192,470 47,299,506 55,253,263 51,410,635 121,525 445,301Operating Expenses

Net Paid Losses and Loss Adjustment Expenses 40,665,456 42,530,795 42,634,370 33,847,423 37,239,712 37,554,009 7,131 5,042 Net Change in Reserve for Reported Claims (3,283,797) 6,214,535 (6,397,725) 8,095,475 90,660 3,321,901 (19,000) 19,000 Net Change in Reserve for Incurred but not Reported Claims 8,600,000 6,200,000 6,500,000 (600,000) 1,500,000 (2,400,000) - - Net Change in Estimated Future Investment Income 851,919 (4,436,003) - - - - - - Change in Unallocated Loss Adjustment Expense - - - - - - - -

Total Losses and Loss Adjustment Expenses 46,833,578 50,509,327 42,736,645 41,342,898 38,830,372 38,475,910 (11,869) 24,042

Contract Service Fees (note 7) 762,856 712,662 567,060 661,265 2,220,533 1,889,132 1,047 3,304Pension expense (note 10) 1,259,853 1,121,770 635,441 560,885 584,402 560,885 11,630 11,808OPEB expense (note 11) - - - - - - - - General and Administrative Expense 18,821,326 18,599,209 9,331,285 9,042,030 6,975,737 6,720,242 124,774 117,703 Total Operating Expenses 67,677,613 70,942,968 53,270,431 51,607,078 48,611,044 47,646,169 125,582 156,857Revenues (Under)/Over Expenses Before Adjustment of Prior Years' Equity Return (3,221,441) (4,600,456) (6,077,961) (4,307,572) 6,642,219 3,764,466 (4,057) 288,444

Adjustment to Prior Years' Equity Return - - - (20) - - - - Revenues (Under)/Over Expenses After Adjustment of Prior Years' Equity Return (3,221,441) (4,600,456) (6,077,961) (4,307,592) 6,642,219 3,764,466 (4,057) 288,444Transfer of Equity - Pension (392,931) (1,314,278) (209,876) (657,139) 32,429 (657,139) 2,234 (13,835)

Transfer of Equity - ULAE (note 2) (742,823) - (151,177) - (306,000) - - -

Prior period adjustment - OPEB - - - - - - - -

Net Position, beginning of year 96,243,130 102,157,864 98,824,964 103,789,695 48,070,808 44,963,481 11,587,971 11,313,362

Net Position, end of year 91,885,935$ 96,243,130$ 92,385,950$ 98,824,964$ 54,439,456$ 48,070,808$ 11,586,148$ 11,587,971$


Workers' Compensation Liability Property Coastal Storm



2018 2017 2018 2017 2018 2017 Current Year Prior Year-$ -$ -$ -$ -$ -$ 190,092,657$ 179,896,045$ - - - - - - (10,458,978) (9,943,804)- - - - 9,560,828 6,449,416 - -- - - - 9,560,828 6,449,416 179,633,679 169,952,241

3,763,299 4,462,641 854,880 787,309 - - 24,277,008 24,126,317 (4,900,209) (4,860,371) (1,157,450) (887,542) - - (29,134,174) (22,811,368)

- - - - - - 368,265 182,217 9,560,828 6,449,416 - - (9,560,828) (6,449,416) - - 8,423,918 6,051,686 (302,570) (100,233) - - 175,144,778 171,449,407

28,475,788 20,235,315 - - - - 149,022,457 134,172,584(8,796,247) 7,717,251 - - - - (18,406,109) 25,368,162(4,200,000) 10,150,000 - - - - 12,400,000 13,350,000

- - - - - - 851,919 (4,436,003)- - 1,200,000 300,000 - - 1,200,000 300,000

15,479,541 38,102,566 1,200,000 300,000 - - 145,068,267 168,754,743

8,374 26,429 1,047 3,304 - - 3,560,917 3,296,09695,171 94,464 554,382 2,778,709 - - 3,140,879 5,128,521

- - 51,987 - - - 51,987 01,010,314 975,841 129,362 127,490 - - 36,392,798 35,582,515

16,593,400 39,199,300 1,936,778 3,209,503 - - 188,214,848 212,761,875

(8,169,482) (33,147,614) (2,239,348) (3,309,736) - - (13,070,070) (41,312,468)- - - - - - - (20)

(8,169,482) (33,147,614) (2,239,348) (3,309,736) - - (13,070,070) (41,312,488)23,158 (110,676) 544,986 2,753,067 - - - -

- - 1,200,000 - - - - -

- - (555,284) - - - (555,284) -

73,443,290 106,701,580 23,382,577 23,939,246 - - 351,552,740 392,865,228

65,296,966$ 73,443,290$ 22,332,931$ 23,382,577$ -$ -$ 337,927,386$ 351,552,740$


TotalsInterfund

TransactionsReinsurance Stability


TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOLSTATEMENTS OF CASH FLOWSFOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017

Cash Flows From Operating Activities: 2018 2017 2018 2017 2018 2017 2018 2017Receipts from member contributions 68,110,696$ 67,463,148$ 49,821,525$ 48,069,177$ 71,778,932$ 64,138,724$ 260,960$ 420,886$ Receipts from service fees and other income 137,336 38,125 50,032 1,871 50,974 3,040 - - Receipts from reinsurers 290,545 185,668 1,358 - 52,084,533 32,517,658 - - Receipts from third parties - claim recoveries 1,977,034 2,327,765 659,420 673,343 5,110,126 4,375,694 - - Payments on claims (42,807,087) (45,324,695) (42,314,301) (35,471,194) (114,853,106) (62,108,303) (7,131) (5,042) Payments to outside reinsurers - - (413,202) (407,909) (8,839,939) (6,839,246) - - Payments for employee salary and benefits (15,734,942) (15,737,950) (7,807,714) (7,622,903) (5,434,944) (5,554,539) - - Payments to suppliers (3,357,324) (3,903,534) (2,020,724) (1,939,806) (1,789,807) (1,692,456) (128,024) (126,479) Payments to TMRS - - - - - - - - Payments to contractors (762,856) (712,662) (567,060) (661,265) (2,220,533) (1,889,132) (1,047) (3,304)Contributions (to)/from other funds - Reinsurance (2,103,735) (2,028,384) (718,904) (697,287) (6,734,563) (3,717,051) (3,626) (6,694) Receipts from/Payments (to) ASO members 350 44,750 - - - - - - Payments for equity return - - - (3,818) - - - - Payments for reinsurance - - - - (1,578,002) (399,992) - - Payments (for)/Receipts from other assets (12,890) (65,764) (6,445) (32,882) (6,445) (32,882) - - Receipts from TML for investment (49,583) 244,018 (24,791) 122,009 (24,791) 122,009 - -

Net cash provided by/(used for) operating activities (without interest income) 5,687,544 2,530,485 (3,340,806) 2,029,336 (12,457,565) 18,923,524 121,132 279,367

Cash Flows From Capital and Related Financing Activities:

Proceeds from sale of capital assets 64,961 69,591 32,481 34,795 32,481 34,795 - - Purchases of capital assets (2,326,320) (1,057,940) (1,163,161) (528,970) (1,163,161) (528,970) (24,488) (11,136) Transfer of equity - ULAE (742,823) - (151,177) - (306,000) - - - Transfer of equity - pension (392,931) (1,314,278) (209,876) (657,139) 32,429 (657,139) 2,234 (13,835)

Net cash used for capital and related financing activities (3,397,113) (2,302,627) (1,491,733) (1,151,314) (1,404,251) (1,151,314) (22,254) (24,971)

Cash Flows From Investing Activities:Proceeds from sale and maturity of investments 82,922,974 61,993,533 69,619,609 48,437,095 34,260,086 2,377,679 3,903,433 2,696,350 Purchase of investments (95,807,450) (68,137,342) (73,337,358) (53,957,583) (24,726,171) (21,379,380) (4,470,782) (3,188,364)Increase in trade receivables 364,377 (358,394) 288,684 (283,841) 114,618 (113,287) 17,051 (16,781) Decrease in trade payables (985,111) (2,042,749) (780,103) (1,608,945) (309,097) (414,628) (46,096) (92,814) Interest income received 9,037,219 8,633,905 7,082,711 6,816,978 3,344,808 2,659,407 394,476 371,875

Net cash provided by/(used for) investing activities (4,467,991) 88,953 2,873,543 (596,296) 12,684,244 (16,870,209) (201,918) (229,734)

Net increase/(decrease) in cash and cash equivalents (2,177,560) 316,811 (1,958,996) 281,726 (1,177,572) 902,001 (103,040) 24,662Cash and cash equivalents at beginning of year 11,054,346 10,737,535 8,753,875 8,472,149 3,468,510 2,566,509 517,268 492,606

Cash and cash equivalents at end of year 8,876,786$ 11,054,346$ 6,794,879$ 8,753,875$ 2,290,938$ 3,468,510$ 414,228$ 517,268$


PropertyLiabilityWorkers' Compensation Coastal Storm



2018 2017 2018 2017 Current Year Prior Year-$ -$ -$ -$ 189,972,113$ 180,091,935$ - - - - 238,342 43,036- - - - 52,376,436 32,703,326- - - - 7,746,580 7,376,802

(28,475,788) (20,235,315) - - (228,457,413) (163,144,549)- - - - (9,253,141) (7,247,155)- - - - (28,977,600) (28,915,392)

(1,036,316) (1,046,047) (136,901) (136,265) (8,469,096) (8,844,587)- - - (3,700,000) - (3,700,000)

(8,374) (26,429) (1,047) (3,304) (3,560,917) (3,296,096)9,560,828 6,449,416 - - - -

- - - - 350 44,750- - - - - (3,818)- - - - (1,578,002) (399,992)- - - - (25,780) (131,528)- - - - (99,165) 488,036

(19,959,650) (14,858,375) (137,948) (3,839,569) (30,087,293) 5,064,768

- - - - 129,923 139,181(195,901) (89,089) (24,488) (11,136) (4,897,519) (2,227,241)

- - 1,200,000 - - - 23,158 (110,676) 544,986 2,753,067 - -

(172,743) (199,765) 1,720,498 2,741,931 (4,767,596) (2,088,060)

55,589,984 46,491,396 7,804,600 7,582,290 254,100,685 169,578,343(40,913,887) (34,989,857) (10,356,883) (7,022,313) (249,612,530) (188,674,839)

187,563 (183,325) 37,527 (36,879) 1,009,820 (992,507) (505,874) (1,243,263) (101,527) (226,151) (2,727,808) (5,628,550)

3,888,752 4,456,949 854,049 777,942 24,602,015 23,717,056

18,246,538 14,531,900 (1,762,234) 1,074,889 27,372,182 (2,000,497)

(1,885,855) (526,240) (179,684) (22,749) (7,482,707) 976,211

5,676,623 6,202,863 1,139,274 1,162,023 30,609,896 29,633,685

3,790,768$ 5,676,623$ 959,590$ 1,139,274$ 23,127,189$ 30,609,896$


Totals

Reinsurance Stability


TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOLSTATEMENTS OF CASH FLOWSFOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017

Cash Flow - Reconciliation of Revenues(Under)/Over Expenses to Net Cash provided by(used for) Operating Activities 2018 2017 2018 2017 2018 2017 2018 2017

Operating revenues (under)/over operating expenses (3,221,441)$ (4,600,456)$ (6,077,961)$ (4,307,592)$ 6,642,219$ 3,764,466$ (4,057)$ 288,444$

Adjustments to reconcile revenues (under)/over expenses to net cash provided by/(used for) operating activities

Depreciation expense 428,334 417,499 214,168 208,749 214,168 208,749 4,509 4,395 Decrease to pension asset - - - - - - - - (Increase) decrease to deferred outflows of pension resources (145,421) (129,420) (85,486) (64,710) 112,549 (64,710) 3,871 (1,362) (Decrease) increase to deferred outflows of pension resources - OPE - - - - - - - - Decrease (increase) in fair value of investments 10,975,104 8,277,268 8,488,136 6,526,412 3,104,618 1,885,928 508,657 373,847Pension contribution to TMRS - - - - - - - 19,000(Decrease) increase in pension payable to TMRS - - - - - - - - Increase (decrease) in OPEB liability - - - - - - - - Increase (decrease) in loss reserves 6,168,123 7,978,534 102,275 7,495,475 1,590,660 921,901 (19,000) - Gain from sale of property and equipment (64,961) (69,591) (32,481) (34,795) (32,481) (34,795) - - (Increase) decrease in contributions and other receivables (58,978) (424,115) 105,629 78,370 (174,488) 179,371 19,184 (15,681) Decrease (increase) in reinsurance recoverable 113,640 (142,137) - - (5,180,392) (5,524) - - (Increase) decrease in prepaid reinsurance - - - - (1,578,002) (399,992) - - (Increase) decrease in other assets (12,890) (65,764) (6,445) (32,882) (6,445) (32,882) - - Increase (decrease) in other liabilities 706,000 (208,585) 9,607 (103,829) 8,671 (109,907) - - (Decrease) increase in equity return payable - - - (3,801) - 0 - - (Decrease) increase in unearned contributions reserve (174,541) 124,971 (30,453) 15,919 193,090 246,729 13 (9,674) (Decrease) increase in funds invested for TML (49,583) 244,018 (24,791) 122,009 (24,791) 122,009 - - (Decrease) increase in reinsurance payable - - (14,705) 14,713 (752,549) 2,681,935 - - (Decrease) increase in reinsurance deposit for unpaid losses - - - - (12,000,000) 12,000,000 - - Increase (decrease) in payable to Administrative Services Only contracts 350 44,750 - - - - - -

(Decrease) increase in outstanding loss drafts 12,308 (138,331) 1,025,138 (950,429) (1,309,543) 344,583 - - (Increase) decrease in accrued investment income 48,937 (140,438) 69,317 (114,273) 79,755 (123,669) 2,439 (7,548)(Increase) decrease in investment trade receivable 922 (3,894) 860 (3,089) 562 (1,365) 44 (184) (Decrease) increase in investment trade payable (1,140) 81 (903) 67 (358) 104 (52) 5

Net cash provided by/(used for) operating activites 14,724,763 11,164,390 3,741,905 8,846,314 (9,112,757) 21,582,931 515,608 651,242 Adjustment for Receipt of Interest Income (9,037,219) (8,633,905) (7,082,711) (6,816,978) (3,344,808) (2,659,407) (394,476) (371,875)

Net cash provided by/(used for) operating activites (without interest income) 5,687,544$ 2,530,485$ (3,340,806)$ 2,029,336$ (12,457,565)$ 18,923,524$ 121,132$ 279,367$

(Statements of Cash Flows continued from previous page)


Liability Coastal StormWorkers' Compensation Property



2018 2017 2018 2017 Current Year Prior Year

(8,169,482)$ (33,147,614)$ (2,239,348)$ (3,309,736)$ (13,070,070)$ (41,312,488)$

36,070 35,158 4,509 4,395 901,758 878,945- - (5,005,695) - (5,005,695) -

33,099 (10,899) 9,314,680 1,589,750 9,233,292 1,318,649 - - (49,064) - (49,064) -

4,900,209 4,860,371 1,157,450 887,542 29,134,174 22,811,368- - (3,762,362) 1,175,789 (3,762,362) 1,194,789 - - 0 (3,700,000) 0 (3,700,000) - - 96,762 - 96,762 -

(12,996,247) 17,867,250 1,200,000 300,000 (3,954,189) 34,563,160- - - - (129,923) (139,181)- - - - (108,653) (182,055)- - - - (5,066,752) (147,661)- - - - (1,578,002) (399,992)- - - - (25,780) (131,528)- - - - 724,278 (422,321)- - - - 0 (3,801)- - - - (11,891) 377,945- - - - (99,165) 488,036- - - - (767,254) 2,696,648- - - - (12,000,000) 12,000,000

- - - - 350 44,750

- - - - (272,097) (744,177)125,142 (3,789) (784) (8,979) 324,806 (398,696)

896 (1,877) 70 (391) 3,354 (10,800) (585) (26) (117) 3 (3,155) 234

(16,070,898) (10,401,426) 716,101 (3,061,627) (5,485,278) 28,781,824 (3,888,752) (4,456,949) (854,049) (777,942) (24,602,015) (23,717,056)

(19,959,650)$ (14,858,375)$ (137,948)$ (3,839,569)$ (30,087,293)$ 5,064,768$


Stability

Totals

Reinsurance

NOTES TO FINANCIAL STATEMENTS NOTE 1 - DESCRIPTION OF OPERATIONS The Texas Municipal League Intergovernmental Risk Pool (the Pool) provides workers’ compensation, liability and property coverages for certain governmental entities of the State of Texas. Member entities include cities, housing authorities, municipal utility districts, councils of government, hospital districts, fire districts/emergency service districts, water and irrigation districts, tax appraisal districts and other special districts and authorities. At September 30, 2018 and 2017, the Pool had 2,827 and 2,803 members respectively participating in its programs. The Pool consists of enterprise funds including the Workers’ Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds. For external reporting purposes, the Pool classifies all of its Funds as “major funds” as prescribed by the Governmental Accounting Standards Board (GASB). The Texas Municipal League Workers’ Compensation Joint Insurance Fund (Workers’ Compensation) was created in January 1974. This Fund provides coverage that conforms to the workers’ compensation laws of Texas. This Fund also provides excess workers’ compensation coverage over per occurrence retentions and corridor deductibles. In 1981, the Texas Municipal League Joint-Self Insurance Fund (Liability and Property) was created. The coverages provided by the Liability Fund include general liability, errors and omissions liability, law enforcement liability, automobile liability, cyber and data breach liability, hangarkeepers liability, chartered aircraft and airport liability, and supplemental sewage backup liability. The Property Fund provides real and personal property, automobile physical damage, mobile equipment, boiler and machinery, crime and animal mortality coverage. The Stability and Reinsurance Funds were created in 1990. The purpose of these funds is to provide additional self-funded layers of risk and stability for Pool operations. The Stability Fund was created to provide protection of all of the Pool’s claims incurring funds to offset the inability of any such fund to meet its cash requirements, provide a reserve for Unallocated Loss Adjustment Expenses (ULAE), and be the mechanism to fund the non-operational Texas Municipal Retirement System unfunded liability. The Reinsurance Fund provides reinsurance, similar to external reinsurance providers, to the claims incurring funds. In 2007, the Pool created the Coastal Storm Fund. This Fund is a source of windstorm and hail coverage for properties located in the first tier of counties adjacent to the Gulf of Mexico with certain characteristics that reduce the likelihood of damage caused by windstorm and hail. The Coastal Storm Fund provides coverage that cannot be readily provided by the Property Fund due to reinsurance limitations. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Change in Accounting Principle On October 1, 2017, the Pool adopted GASB Statement No. 25, Accounting and Financial Reporting of Post- Retirement Benefits Other than Pension. The change in accounting principle resulted in a reduction of net position as of October 1, 2017 of $555,084. See Note 11. Financial Statements The basic financial statements consist of individual account balances for the Workers’ Compensation, Liability, Property, Reinsurance, Stability, and Coastal Storm Funds. The effects of all interfund transactions have been removed. The financial statements of the Pool have been prepared using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental entities.

Contribution Recognition Generally, member entities pay annual contributions to obtain workers’ compensation, liability, property, and coastal storm coverage for each fiscal year ending September 30. These contributions are earned on a pro-rata basis over the period of coverage. General liability, automobile liability, and property rates are determined by the Board and are based on the Pool’s experience. Initial rates were based on the rates established by the Insurance Services Office and have been adjusted over time as the Pool’s experience developed. Rates for law enforcement liability and public officials errors and omissions coverages are determined by the Board. Workers’ Compensation contributions are based on rates established by the Texas Department of Insurance, adjusted using experience modifiers and discounts based on members’ individual loss experience. Coastal Storm contributions are 80% of the premium charged by Texas Windstorm Insurance Association (TWIA). Liability and Property contributions are adjusted using an experience modifier based on members’ individual loss experience. These credits and adjustments have been netted against contributions in the Workers’ Compensation, Liability and Property Statements of Operations and Changes in Net Position. Investments Cash, cash equivalents and investments are combined for banking and investment purposes, but individual fund balances are determined by fund operations and financial results. The Pool presents all of its investments on the balance sheet at fair value and recognizes changes in the fair value of investments as a component of investment income on the Statements of Operations and Changes in Net Position. The intent of the Pool is to buy and hold investments until they mature. However, the Pool may sell securities as a prudent measure based on market conditions. Long-term fixed income investments consist of United States Government and agency securities, and municipal bonds. Short-term investments include securities with maturity dates within one year. Cash equivalents include demand, money market, and investment pool funds. Investing is a primary ongoing operation of the Pool and all investment income is used to fund Pool operations. Investment income is also a determining factor used in setting contribution rates. It is the Pool’s policy to consider investment income as an important component of total operating income. Fair Value Measurements Estimates of fair value for financial assets are based on the framework established in the fair value measurements and disclosures accounting guidance. The framework is based on the inputs used in valuation and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance includes a hierarchy based on whether significant valuation inputs are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect significant market assumptions. Fair values are based on quoted market prices when available (Level 1). The Pool receives the quoted market prices from a third party nationally recognized in pricing service. When market prices are not available, the Pool utilizes a pricing service to determine an estimate of fair value, which is mainly used for the Pool’s debt securities’ fair value. The fair value is generally estimated using current market inputs for similar financial instruments with comparable terms and credit quality, commonly referred to as matrix pricing (Level 2). In instances where there is little or no market activity for the same or similar instruments, the Pool estimates fair value using methods, models and assumptions that management believes are relevant to the particular asset. This may include discounted cash flow analysis or other income based approaches (Level 3). These valuation techniques involve some level of management estimation and judgment. The Pool recognizes transfers between levels at the end of the reporting period. Claim Reserves After considering the consulting actuary’s analysis, claim reserves represent management’s best estimate of ultimate net unpaid losses. Estimated net ultimate losses include claims that have been reported but not yet paid, estimates of additional development of initial claim estimates, and claims that have been incurred but not yet reported (IBNR) to the Pool, net of reinsurance. The actuary’s analysis includes allocated loss adjustment expenses that can be associated directly with specific claims, such as legal fees. The Pool also accrues a reserve estimate for ULAE in the Stability Fund, which represents expected future costs that cannot be associated with specific claims but will be related to claims in the process of settlement, such as salaries of the Pool’s claims department, and other costs of administering and closing claims. The Pool currently incurs ULAE such as contract adjuster fees that are reported as contact service

fees and are not included in claim reserves. The Pool has accumulated a base of reported loss data which is used to project ultimate losses. Estimates of incurred losses for all accident years involve estimation of future events and costs that may significantly differ from costs ultimately realized due to a number of factors. Although considerable variability is inherent in estimates of trends in loss severity and frequency, management believes the reserves for losses and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. Reinsurance premiums, losses, and loss adjustment expenses are accounted for consistent with the original coverage documents issued and the terms of the reinsurance contracts. Certain reinsurance contracts include provisions for reinstatement premiums that are estimated and included in current operations when incurred. The Pool discounts claim reserves in the Workers’ Compensation Fund for all unpaid lifetime benefits to beneficiaries of employees fatally injured on the job. As such, the unpaid benefits have a determinable duration and amount, and are discounted as follows:

• For claims prior to October 1, 2013, the Board authorized varying discount rates of 5%, 6%, and 9%. The

undiscounted reserves were based on the 1980 industry life expectancy table. • Effective October 1, 2013, the Board established a discount rate of 4.6% for all 2013-14 and later claims.

The undiscounted reserves for these claims will be based on the most recent National Vital Statistics Reports life expectancy tables.

• Effective October 1, 2014, the Board expanded the Pool’s discounting on loss reserve policy to include workers’ compensation indemnity claims that qualify under the Lifetime Income Benefits provision in the Texas Workers’ Compensation Act, and that the Pool use the same methodology and factors in determining the reserve amount consistent with the application of the Pool’s policy of discounting fatality losses.

• Effective September 1, 2015, the state law changed to provide that a surviving spouse of a first responder fatally injured on the job will receive lifetime weekly death benefits. Prior to September 1, 2015, the lifetime benefits ended when the surviving spouse remarried. As a result of this legislative change, the Pool discontinued applying the life change factor for first responder surviving spouse benefits since it no longer applies.

• The discount rates included a component for future interest income plus life changes such as remarriage, children not continuing their education, etc., except for all first responder claims with an accident date of September 1, 2015 and later. For these claims, the life change factor was not included in the discount rate.

• Effective September 30, 2018, the discount rate for qualifying lifetime income benefit and death benefit reserves for the surviving spouse of non-first responder is 4.4%, and 3.5% for death benefit reserves established for the surviving spouse of a first responder. The Board also approved normalizing the discount rates for all previously discounted reserves so that they are in accordance with the updated discount policy. The normalizing of all discount rates increased the reserves by $3.3 million. For rate stabilization purposes, the Board decided to increase the amount of the reserves by 1/3 of the $3.3 million, or $1.1 million per year over the three year period beginning with the 2017-18 fiscal year.

At September 30, the reserves for reported lifetime benefit claims (net of reinsurance) and estimated present value of these reserves were as follows: Net Position Net Position supports the Pool’s operations, provides protection against enterprise risks (underwriting, reserving, asset, and operational risks), and maintains the financial stability and strength of the Pool.

In order to maintain financial stability and protect the Pool against enterprise risks, the Pool had a Target Fund Balance Review conducted by PricewaterhouseCoopers, LLP (PwC), and on April 26, 2014, based on that study, the Board adopted a policy establishing minimum and maximum target net position funding levels on a combined fund basis. The minimum target funding level is based on the projected capital requirements to fund a 1-in-250

Lifetime Income Benefits 2018 2017Reserves $65,291,174 $64,387,202Discount (26,790,369) (27,642,288) Present Value $38,500,805 $36,744,914

year occurrence and the maximum level was set at the minimum target funding level plus funding for an additional 1-in-20 year occurrence.

The Board also set minimum net position equity goals for the Workers’ Compensation, Liability, Property, and Coastal Storm Funds based on the projected capital requirements to fund a 1-in-100 year occurrence.

Each year, using a modified PwC provided template, the Pool performs an analysis of the combined and individual operating fund minimum and maximum net position requirements and adopts updated minimum and maximum funding level parameters. For the 2016-17 fiscal year, the Pool set the range for minimum target equity level at $418.5 million and the maximum at $620.4 million on a combined fund basis.

During the 2017-18 fiscal year, PwC updated the original study. Based on this, the Board adopted a new methodology (50/50 blend method) to establish updated minimum and maximum funding level parameters. For the 2017–18 fiscal year, the Pool set the range for minimum target equity level at $391.3 million and the maximum at $547.9 million on a combined fund basis. In addition, the following minimum equity goals were set for the individual funds:

Workers’ Compensation Fund $100.1 million Liability Fund $ 86.5 million Property Fund $ 86.0 million Coastal Storm Fund $ 4.7 million Reinsurance & Stability Funds $114.0 million In July 2018, PwC revised its 2017 Target Equity study to include the additional $50 million layer of reinsurance that the Pool purchased subsequent to PwC’s update of the original study. The update reduced the target equity capital requirement range from $391.3 - $547.9 million to $319.1 - $475.2 million, a $72.2 million reduction. In addition, the update also resulted in new minimum equity goals for the individual funds:

Workers’ Compensation Fund $ 98.1 million Liability Fund $ 81.0 million Property Fund $ 41.4 million Coastal Storm Fund $ 4.6 million Reinsurance & Stability Funds $ 94.0 million Along with the Target Fund Balance Policy, the Board also adopted an Equity (Net Position) Return Policy. The combined net position balance at September 30, 2018 and 2017 was below the minimum target funding level. As such, based on the Pool’s policy, no net position distributions were accrued for the fiscal years 2017-18 and 2016-17.

GASB Statement No. 31 requires the Pool to report investments on the Statement of Net Position at fair value. Due to this GASB requirement, net position shown on the Statement of Net Position as of September 30, 2018 and 2017 includes unrealized gains and losses on investments as follows:

Funds Net Position Net Unrealized Gains (Losses) 2018 2017

Workers' Compensation 99,080,638$ (7,194,703)$ 91,885,935$ 96,243,130$

Liability 97,893,252 (5,507,302) 92,385,950 98,824,964

Property 56,296,276 (1,856,820) 54,439,456 48,070,808

Coastal Storm 11,921,884 (335,736) 11,586,148 11,587,971

Reinsurance 68,369,416 (3,072,450) 65,296,966 73,443,290

Stability 23,110,688 (777,757) 22,332,931 23,382,577

Total 356,672,154$ (18,744,768)$ 337,927,386$ 351,552,740$

On October 2013, the Board authorized restricting $4.7 million in equity in the Large Loss Fund for the purpose of establishing a conservative approach for the Subsequent Injury Fund’s long term obligations to the Pool. On September 30, 2018, the Board authorized restricting an additional $2.0 million in equity in the Reinsurance Fund for the Subsequent Injury Fund’s long term obligations to the Pool. On October 2018, the Board increased the ULAE reserves by $3.6 million to $8.9 million. For rate stabilization purposes, the Board decided to recognize 1/3 of the $3.6 million or $1.2 million per year over the three year period beginning with the 2017-18 fiscal year. Income Taxes The Workers’ Compensation and the Liability and Property programs obtained rulings from the Internal Revenue Service in February 1980 and July 1989, respectively, which recognize these programs as political subdivisions. Pursuant to these rulings, income is not taxable under Section 115(1) of the Internal Revenue Code. Accordingly, the accompanying financial statements do not include income tax expense. Land and Capital Assets On February 28, 1995, the Pool purchased a 50% undivided interest in the land and building at 1821 Rutherford Lane in Austin, Texas as the site of the Pool’s headquarters. Expenditures for individual property items costing $30,000 or more are capitalized and carried at depreciated cost. Depreciation on the building is computed on a straight-line basis over its estimated useful life of 40 years. Land is reported as a non-depreciable asset. Capital assets are shown on the statement of net position at depreciated cost. Depreciation expense is computed on a straight-line basis over the estimated useful life of the assets, which is assumed to be seven years for software, three years for vehicles and computers, and five years for furniture, fixtures and equipment (see Note 5). Other Liabilities and Pension Payable Other liabilities include amounts payable to employees and various vendors at the end of the fiscal year for goods or services provided during the fund year. Unearned Contributions Unearned contributions represent amounts contributed by members that have not been earned. The balances at September 30 are detailed on the table to the right: Deferred Compensation Plan The Pool offers its employees deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans available to all Pool employees permit employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or qualifying emergency. The Pool contributed $1,259,012 and $1,247,147 during the years ended September 30, 2018 and 2017, respectively to the 457 plan. Allocations Investment income (without unrealized gains/(losses)) is allocated monthly to each fund on the basis of each fund’s beginning month’s pooled cash balance. Unrealized gains/(losses) are allocated monthly to each fund on the basis of each fund’s ending cash balance. Assets, liabilities, revenues and expenses directly attributable to a particular Fund are recorded directly to those Funds at 100%. General and Administrative (G&A) expenses, not directly attributable to a particular Fund are allocated among the Funds. 95% of these G&A expenses are allocated to the Workers’ Compensation, Liability and Property Funds at percentages of 50%, 25%, and 25%, respectively. The other 5% of G&A expenses are allocated to the Reinsurance, Coastal Storm and Stability Funds at 80%, 10%, and 10%, respectively. Estimates The Pool’s annual financial report contains required estimates in accordance with GAAP. All such estimates are reviewed and approved by management. Required estimates are based on the most current and accurate information available at the time. Actual results, when known, could vary significantly from these estimates.

Unearned Contributions 2018 2017

Workers' Compensation 1,228,660$ 1,403,201$

Liability 940,286 970,739

Property 2,511,040 2,317,950

Coastal Storm 15,952 15,939

Total 4,695,938$ 4,707,829$

Other Liabilities 2018 2017

Vacation Wages Payables 1,939,726$ 1,812,649$

Other Payables 1,092,077 1,171,901

Total Other Liabilities 3,031,803$ 2,984,550$

Subsequent Events The Pool has evaluated subsequent events for disclosure and recognition through December 14, 2018 the date on which these financial statements were available to be issued. NOTE 3 - CASH AND CASH EQUIVALENTS The bank balances of the Pool’s cash and cash equivalents are $23,823,616 and $31,292,987 at September 30, 2018 and 2017, respectively. The difference between the bank balances and the recorded cash balances on the statement of net position is due to the outstanding checks net of deposits in transit of $696,427 and $683,091 at September 30, 2018 and 2017, respectively. The cash balances are $23,127,189 and $30,609,896 at September 30, 2018 and 2017, respectively. Cash equivalents invested in TexPool, a Local Government Investment Pool (LGIP), amounted to $10,176,234 and $7,003,000 at September 30, 2018 and 2017, respectively. Per GASB Statement No. 79, Certain External Investment Pools and Pool Participants, TexPool utilizes amortized cost for valuation and financial reporting. The Pool also invests in money market funds that are recorded at fair value which approximates cost. There are no limitations or restrictions on withdrawals from TexPool or money market funds except for daily trading time deadlines. NOTE 4 - INVESTMENTS Investing is a primary ongoing operation of the Pool and it is the Pool’s policy to consider investment income as an important component of operating income. Under provisions of the Pool’s investment policy, and in accordance with regulations for investment of public funds in the State of Texas (i.e., the Public Funds Investment Act), the Pool may invest in the following types of investments:

1. Obligations of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks;

2. Direct obligations of the State of Texas or its agencies and instrumentalities;

3. Mortgage backed securities directly issued by a federal agency or instrumentality except for collateralized mortgage obligations.

4. Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States;

5. 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;

6. Certificates of deposit and share certificates authorized by section 2256.010 of the Public Funds Investment Act;

7. Repurchase agreements authorized by section 2256.011 of the Public Funds Investment Act;

8. No-load money market mutual funds authorized by section 2256.014 of the Public Funds Investment Act;

9. No-load mutual funds authorized by section 2256.014 of the Public Funds Investment Act;

10. Investment Pools authorized by sections 2256.016 and 2256.019 of the Public Funds Investment Act;

11. Interest-bearing banking deposits guaranteed or insured by the Federal Deposit Insurance Corporation or its successor.

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. In accordance with the Pool’s investment policy and State law, preservation and safety of principal is the primary objective of the Pool’s investment program and is addressed by purchasing the highest quality and creditworthy investments (see list of authorized investments above). As of September 30, 2018 and 2017, the percentage of the Pool’s cash equivalents invested in a government money market at Wells Fargo was 15.4% and 56%, respectively. The percentage of the Pool’s cash equivalents invested in TexPool as of September 30, 2018 and 2017 was 42.7% and 22.4%, respectively. The remainder of the cash equivalents were invested in a money market fund account at Frost Bank. Federal Deposit Insurance Corporation (FDIC) insures amounts on deposit up to the limits as prescribed by law. For funds in excess of the FDIC insured amount, the Pool requires the depository to place securities as collateral in accordance with state law and the Pool’s investment policy. Cash equivalents held in government money market funds at Wells Fargo and Frost Bank and in TexPool are not FDIC insured. The government money market funds are registered and regulated by the Securities and Exchange Commission (SEC) and the Texas State Comptroller of Public Accounts oversees TexPool. The Pool does not believe it’s exposed to significant credit risk. Neither the Pool’s investment policy nor state law places a limit on the amount the Pool may invest in a single authorized issuer. The following presents the ratings for each investment type at September 30, 2018:

The Pool’s gross unrealized gains and losses on investments were as follows:

The Pool categorizes its investments fair value measurements within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Pool had the following recurring fair value measurements at September 30, 2018 and 2017, respectively:

Investments by fair value level 09/30/18

Quoted Prices in Active

Markets for Identical Assets

(Level 1)

Significant Other

Observable Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

U.S. Treasury Securities 5,902,847$ 5,902,847$ -$ -$ Total U.S. Treasury Securities 5,902,847 5,902,847 - -

Government Agencies SecuritiesFNMA 989,430 - 989,430 - FHLB 14,597,820 - 14,597,820 - FFCB 8,348,640 - 8,348,640 - Municipal Bonds 132,055,018 - 132,055,018 - Mortgage Backed 457,269,379 - 457,269,379 - Other 169,017 - 169,017 -

Total Government Agencies Securities 613,429,304 - 613,429,304 - Total investments by fair value level 619,332,151$ 5,902,847$ 613,429,304$ -$

Investments by fair value level 09/30/17

Quoted Prices in Active

Markets for Identical Assets

(Level 1)

Significant Other

Observable Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

U.S. Treasury Securities 6,306,117$ 6,306,117$ -$ -$ Total U.S. Treasury Securities 6,306,117 6,306,117 - -

Government Agencies SecuritiesFNMA 2,002,920 - 2,002,920 - FHLB 12,335,320 - 12,335,320 - FFCB 5,650,920 - 5,650,920 - Municipal Bonds 167,815,960 - 167,815,960Mortgage Backed 458,676,511 - 458,676,511 - Other 166,733 - 166,733 -

Total Government Agencies Securities 646,648,364 - - 646,648,364 - - Total investments by fair value level 652,954,481$ 6,306,117$ 646,648,364$ -$

September 30, 2018

Amortized CostGross Unrealized

GainsGross Unrealized

Losses

Total Gross Unrealized

Gain/(Loss) Fair ValueU.S. Treasury Obligations 6,097,500$ 99,175$ (293,828)$ (194,653)$ 5,902,847$ Municipal Bonds 133,294,068 1,839,306 (3,078,356) (1,239,050) 132,055,018 U.S. Agency Obligations 26,161,475 504 (2,057,072) (2,056,568) 24,104,907 U.S. Agency MBS 472,523,885 1,578,590 (16,833,096) (15,254,506) 457,269,379 Total Investments 638,076,928$ 3,517,575$ (22,262,352)$ (18,744,777)$ 619,332,151$

September 30, 2017

Amortized CostGross Unrealized

GainsGross Unrealized

Losses

Total Gross Unrealized

Gain/(Loss) Fair ValueU.S. Treasury Obligations 6,101,791$ 205,467$ (1,141)$ 204,326$ 6,306,117$ Municipal Bonds 163,253,428 5,102,194 (539,662) 4,562,532$ 167,815,960$ U.S. Agency Obligations 21,160,311 10,030 (1,014,448) (1,004,418)$ 20,155,893$ U.S. Agency MBS 455,418,650 6,283,779 (3,025,918) 3,257,861$ 458,676,511$ Total Investments 645,934,180$ 11,601,470$ (4,581,169)$ 7,020,301$ 652,954,481$

The amortized cost and estimated fair value of long-term and short-term fixed income investments at September 30, 2018 and 2017, by expected maturities, are shown below. Actual maturities will vary from expected maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Net realized gains from sales of long-term fixed income investments were $726,020 and $1,258,345 for 2018 and 2017, respectively, and are included in investment income (change in fair value). Investment income included in the Statement of Operations and Changes in Net Position for the years ended September 30 are detailed to the right. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Pool’s investment policy addresses interest rate risk by establishing a custom benchmark based on the intent and ability to buy investments and hold them until they mature. However, the Pool may sell securities as a prudent measure based on market conditions. To guide the buying and holding of investments, the Pool utilizes a custom benchmark that takes into account expected payments of liabilities and the Pool’s objectives for utilizing Members’ Equity. The Pool’s custom benchmark is the following:

70% weighting of the Barclays Capital MBS Fixed Rate Index 20% weighting of the Barclays Capital Intermediate Taxable Municipal Index 10% weighting of the Barclays Capital Intermediate Government Index

The estimated effective duration is used to assess interest rate risk by estimating the sensitivity of fixed income securities to interest rate changes. The effective duration estimates the percentage change in the fair value of an investment (or an investment portfolio) for a one percent change in interest rates. It makes assumptions regarding the most likely timing and amounts of variable cash flows for investments that are highly sensitive to interest rate changes, such as mortgage-backed securities, callable bonds, and variable-rate debt.

September 30, 2018 September 30, 2017Investment Maturity Amortized Cost Fair Value Amortized Cost Fair ValueDue in one year or less 7,327,039$ 7,322,708$ 2,430,631$ 2,429,488$ Due after one year through five years 41,955,783 41,248,119 56,821,120 57,780,990Due after five years through ten years 46,223,943 43,716,072 37,665,802 37,563,521Due after ten years through twenty years 70,046,278 69,775,873 93,697,345 96,604,022Mortgage-Backed Securities due after one year 472,523,885 457,269,379 455,319,282 458,576,460Total 638,076,928$ 619,332,151$ 645,934,180$ 652,954,481$

Investment Income 2018 2017

Investment Income (interest income) 24,277,008$ 24,126,317$

Net unrealized gains (25,765,066)$ (19,215,285)$ Amortization of discounts (premiums) (4,095,128) (4,854,428)Net realized gains 726,020 1,258,345

Investment Income (change in fair value) (29,134,174)$ (22,811,368)$

Estimated

As of September 30, 2018 Fair ValueEffective

DurationU.S. Treasury 5,902,487$ 18.08Government Agencies 24,104,907 5.35Municipal Bonds 132,055,018 5.74Mortgage Backed Securities 457,269,379 5.56Total Investments 619,331,791$ 5.68The estimated effective duration of the custom benchmark at September 30, 2017 was 4.28.

NOTE 5 – CAPITAL ASSETS

Capital assets were comprised of the following at September 30:

NOTE 6 - OTHER ASSETS At September 30, the balance of other assets consisted of the following:

The TML deposit required by contract is equal to one month’s average bill and is based upon an average of six months of billings. The deposit with National League of Cities Mutual Insurance Company (NLC-MIC) is based upon the level of reinsurance purchased from them. At September 30, 2018, the Pool’s equity interest in NLC-MIC was $3,298,768 which is $2,737,701 more than the Pool’s recorded cost basis.

Other AssetsWorkers'

Compensation Liability Property 2018 2017Deposit with TML 201,798$ 100,899$ 100,899$ 403,596$ 403,596$ Deposit with NLC-MIC 39,518 227,973 293,576 561,067 561,067 Deposit with WC Alliance 56,864 - - 56,864 56,864 Prepaid Expenses 243,227 121,613 121,614 486,454 460,675 Rent Deposits 8,849 4,425 4,424 17,698 17,697 Total 550,256$ 454,910$ 520,513$ 1,525,679$ 1,499,899$

Net Capital Assets

Fund Capital AssetsAccumulated Depreciation 2018 2017

Workers' Compensation 10,137,153$ (4,837,213)$ 5,299,940$ 3,401,954$ Liability 5,068,576 (2,418,606) 2,649,970 1,700,977Property 5,068,576 (2,418,606) 2,649,970 1,700,977Reinsurance 853,655 (407,344) 446,311 286,480Coastal Storm 106,707 (50,918) 55,789 35,810Stability 106,707 (50,918) 55,789 35,810 Total 21,341,374$ (10,183,605)$ 11,157,769$ 7,162,008$

Capital AssetsEnding Balance

@ 10/1/17

Purchases & Other

AcquisitionsSales and Other

DispositionsEnding Balance

@ 9/30/18Vehicles over $30,000 140,318$ 32,559$ (75,129)$ 97,748$ Computers 521,822 - - 521,822Furniture & Fixtures 979,010 - (13,833) 965,177Software 7,996,844 4,782,876 (177,327) 12,602,393Building & Property Improv. 6,380,127 267,527 (8,117) 6,639,537Land 514,697 - - 514,697Total Investments 16,532,818$ 5,082,962$ 21,615,780$ 21,341,374$

Accumulated DepreciationEnding Balance

@ 10/1/17Depreciation

ExpenseSales and Other

DispositionsEnding Balance

@ 9/30/18Vehicles over $30,000 89,616$ 27,111$ (75,130)$ 41,597$ Computers 414,845 56,433 - 471,278Furniture & Fixtures 742,298 63,651 (13,834) 792,115Software 3,811,888 624,487 - 4,436,375Building & Property Improv. 4,312,163 130,077 - 4,442,240Total Investments 9,370,810$ 901,759$ (88,964)$ 10,183,605$

*Includes $6,287,997.61 of Work in Process projects: ONESolution - $487,384.34 & Policy/Billing Center - $5,800,613.27

NOTE 7 – CONTRACT SERVICE FEES The Pool utilizes several contractors for claims processing, underwriting, reinsurance brokerage and data processing services. Included in the statement of operations were the following contract service fees for the fiscal years ending September 30, 2018 and 2017: NOTE 8 - REINSURANCE For fiscal years ending September 30, 2018 and 2017, the following Funds carry excess reinsurance as outlined below:

• Workers’ Compensation Fund

− Carries excess reinsurance up to statutory limits over a retention limit of $3 million. − Retains 40% of losses exceeding the Fund’s retention of $3 million. − The Reinsurance Fund assumes a 60% quota share of losses in excess of $3 million up to statutory

limits. • Liability Fund

− Carries excess reinsurance over a retention of $3 million. − Retains 27.5% of losses exceeding the Fund’s retention of $3 million. − Retains a 25% quota share of the first $50,000 of losses related to Cyber & Data Breach coverage. − Retains 100% of Cyber & Data Breach losses exceeding $50,000 up to policy limits. − The Reinsurance Fund assumes a 72.5% quota share of losses in excess of $3 million.

• Property Fund

− Carries a specific retention limit of $4 million per occurrence and retains 50% of the $6 million excess of $4 million layer.

Through April 30, 2018, the Reinsurance Fund assumes the following: • a 50% quota share for the $6 million excess of $4 million layer, • a 20% quota share of the $15 million excess of $10 million layer, • a 20% quota share of the $25 million excess of $25 million layer, • a 25% quota share of the $50 million excess of $50 million layer, • a 50% quota share of the $50 million excess of $100 million layer, and • an 80% quota share of the $50 million excess of $150 million layer.

− Beginning on May 1, 2018, continues a specific retention limit of $4 million per occurrence and retains 50% of the $6 million excess of $4 million layer.

The Reinsurance Fund assumes the following: • a 50% quota share for the $6 million excess of $4 million layer, • a 30% quota share of the $15 million excess of $10 million layer, • a 20% quota share of the $25 million excess of $25 million layer, • a 25% quota share of the $50 million excess of $50 million layer, • a 25% quota share of the $50 million excess of $100 million layer, • a 25% quota share of the $50 million excess of $150 million layer, and • a 50% quota share of the $50 million excess of $200 million layer.

Payments to reinsurers are recognized over the term of the contracts. Reserves for losses and loss adjustment expenses are stated after deduction for reinsured estimated losses; however, the Pool is liable for these amounts in the event the reinsurers are unable to pay their portion of the claims.

Contract Service Fees 2018 2017Workers' Compensation 762,856$ 712,662$ Liability 567,060 661,265Property 2,220,533 1,889,132Coastal Storm 1,047 3,304Reinsurance 8,374 26,429Stability 1,047 3,304Total 3,560,917$ 3,296,096$

The amounts anticipated to be recovered from outside reinsurance on case reserves and IBNR at September 30, 2018 and 2017 were as follows:

The gross liabilities shown above are net of discounting. Approximately 99.0% of the 2018 recoverable balance represents reserves from reinsurers rated “Excellent”, “Superior” or “Good” by A.M. Best Company or the State of Texas Subsequent Injury Fund. The Pool is a participating member of NLC-MIC (not rated), which provides excess insurance coverage accounting for 1.0% of the reinsurance recoverable. NOTE 9 - RELATED PARTY TRANSACTIONS The Pool has an administrative services contract with TML for certain management and licensing fees related to the use of the organization’s name. For fiscal years 2018 and 2017, these fees totaled $847,000, each year. The Pool maintains a deposit with TML, and at September 30, 2018 and 2017, the amount of this deposit was $403,596. The Pool has an arrangement to invest funds owned by TML. The amount of these funds, which was recorded as both an investment asset and a liability on the financial statements, is shown in the table above.

September 30 , 2018 September 30 , 2017Gross Ceded Net Gross Ceded Net

Workers' Compensation Case 114,882,621$ (22,235,613)$ 92,647,008 116,128,611$ (21,049,726)$ 95,078,885

IBNR 63,255,000 (355,000) 62,900,000 54,765,000 (465,000) 54,300,000

Total 178,137,621 (22,590,613) 155,547,008 170,893,611 (21,514,726) 149,378,885

Liability Case 69,014,874 - 69,014,874 75,412,599 - 75,412,599

IBNR 27,400,000 - 27,400,000 20,900,000 - 20,900,000

Total 96,414,874 - 96,414,874 96,312,599 - 96,312,599

Property Case 90,330,657 (73,663,734) 16,666,923 96,879,703 (80,303,440) 16,576,263

IBNR 5,435,000 (6,310,000) (875,000) 3,245,000 (5,620,000) (2,375,000)

Total 95,765,657 (79,973,734) 15,791,923 100,124,703 (85,923,440) 14,201,263

Coastal Storm Case - - - 19,000 - 19,000

IBNR - - - - - -

Total - - - 19,000 - 19,000

Reinsurance Case 34,551,739 - 34,551,739 43,347,986 - 43,347,986

IBNR 6,450,000 6,450,000 10,650,000 10,650,000

Total 41,001,739 - 41,001,739 53,997,986 - 53,997,986

Stability ULAE 6,500,000 - 6,500,000 5,300,000 - 5,300,000

Eliminating Case (34,551,739) 34,551,739 - (43,347,986) 43,347,986 -

IBNR (6,450,000) 6,450,000 - (10,650,000) 10,650,000 -

Total (41,001,739) 41,001,739 - (53,997,986) 53,997,986 -

Total Case 280,728,152 (61,347,608) 219,380,544 293,739,913 (58,005,180) 235,734,733

IBNR 96,090,000 (215,000) 95,875,000 78,910,000 4,565,000 83,475,000

Total 376,818,152$ (61,562,608)$ 315,255,544$ 372,649,913$ (53,440,180)$ 319,209,733$

Related Party Transactions 2018 2017Beginning TML Investments 7,179,143$ 6,691,107$ Investment Income 200,835 188,036 Additional (Withdrawals) Deposits (300,000) 300,000Total Fair Value 7,079,978$ 7,179,143$

The Pool purchased 50% of the land and building at 1821 Rutherford Lane from the Texas Municipal League Multi-State Benefits Risk Pool in February 1995. The net purchase price paid by the Pool was $2.184 million. The common areas of the building are managed by a governing committee. The Pool invests funds in TexPool. The same municipalities that the Pool insures, may also be members in TexPool investments as further disclosed in Note 4. The Executive Director serves on the NLC-MIC Board of Directors. The Pool is a member of the Political Subdivision Workers’ Compensation Alliance, which is an intergovernmental arrangement to develop and maintain network medical services for workers’ compensation providers within the State of Texas. NOTE 10 - DEFINED BENEFIT PENSION PLAN Plan Description The Pool provides pension benefits for all of its eligible employees through a non-traditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public employee retirement system. The plan provisions adopted by the Pool are within the options available in the governing state statutes of TMRS. TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for TMRS. The report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by TMRS. This report may be obtained from the TMRS website at www.tmrs.com. Questions concerning the Pool’s retirement provisions should be directed to the Chief Financial Officer at the Texas Municipal League Intergovernmental Risk Pool at (512) 491-2300. Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the Pool, within the options available in the state statutes governing TMRS. The plan provisions adopted by the Pool’s Board of Trustees as of September 30, 2018 and 2017 are detailed to the right: Members can retire at certain ages, based on the years of service with the Pool and prior service with participating local governments. The Service Retirement Eligibilities for the Pool are: 10 years/age 60, 25 years/any age.

In addition to the annually repeating updated service credit, the Pool elected to provide an annually repeating annuity adjustment at 70% of the increase in the Consumer Price Index and supplemental death benefits to both active and retired employees. In 2016, the Pool added the transfer service option to its plan’s provisions. Employees covered by benefit terms At the December 31, 2017 and 2016 valuation and measurement dates, the following numbers of employees were covered by the benefit terms:

Plan Provisions Plan Year 2018 Plan Year 2017Employee deposit rate (Employee) 7.0% 7.0%Matching ratio (Pool to Employee) 2 to 1 2 to 1Years required for vesting 10 10Service retirement eligibility

(expressed as age / years of service) 60/10, 0/25 60/10, 0/25Updated Service Credit 100% Repeating 100% RepeatingAnnuity Increase (to retirees) 70% of CPI 70% of CPISupplemental Death Benefits (to active employees) Yes YesSupplemental Death Benefits (to retirees) Yes YesMilitary Service Credit Yes YesBuyback Service Yes Yes

Plan Valuation Year2017 2016

Active employees 245 244Inactive employees or beneficiaries currently receiving benefits 74 66Inactive employees entitled to but not yet receiving benefits 43 42Total 362 352

http://www.tmrs.com/

Contributions Under the state law governing TMRS, the contribution rate for the Pool is determined annually by the TMRS actuary, using the Entry Age Normal (EAN) actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of the Pool’s payroll from year to year. The normal cost contribution rate finances the portion of the Pool’s projected benefit allocated annually; the prior service contribution rate amortizes the unfunded actuarial liability over the applicable period for the Pool. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and annuity increases.

The Pool contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Pool make contributions monthly. The contribution rates for the Pool were 10.59% and 11.38% in calendar years 2018 and 2017, respectively. The Pool’s contributions to TMRS for the year ended September 30, 2018, were $2,818,177. For the year ended September 30, 2017, the contributions were $2,679,841. Net Pension Asset (Liability) The Pool’s Net Pension Asset (Liability) was measured as of December 31, and the Total Pension Liability used to calculate the Net Pension Asset (Liability) was determined by an actuarial valuation as of that date. Actuarial assumptions: The Total Pension Asset (Liability) in the December 31, 2017 and 2016 actuarial valuation was determined using the following actuarial assumptions:

Methods and Assumptions used to Determine Contribution Rates:Actuarial Cost Method Entry Age NormalAmortization Method Level Percentage of Payroll, ClosedRemaining Amortization Period 27 yearsAsset Valuation Method 10 Year Smoothed Market; 15% soft corridorInflation 2.5%Salary Increases 3.50% to 10.5% including inflationInvestment Rate of Return 6.75%Retirement Age Experience-based table of rates that are specific to the Pool's plan of benefits.

Last updated for the 2015 valuation pursuant to an experience study of the period 2010-2014.

Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male ratesmultiplied by 109% and female rates multiplied by 103% and projected on a fullygenerational basis with scale BB.

Other Information:Notes There were no benefit changes during the year.

2017 Plan Valuation Methods and Assumptions

Notes Actuarially determined contribution rates are calculated as of December 31 and become effective in January, 13 months later.

Schedule of Contributions for Plan Years 2017 and 2016

Actuarial assumptions used in the December 31, 2017, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2010 to December 31, 2014. Health post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. 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. The target allocation and best estimates of real rates of return for each major asset class in fiscal year 2018 are summarized in the table above. Discount Rate The discount rate used to measure the Total Pension Asset (Liability) was 6.75% at December 31, 2017. 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. The following presents the net pension asset (liability) of the Pool, as well as what the Pool’s net pension asset (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:

Methods and Assumptions used to Determine Contribution Rates:Actuarial Cost Method Entry Age NormalAmortization Method Level Percentage of Payroll, ClosedRemaining Amortization Period 28 yearsAsset Valuation Method 10 Year Smoothed Market; 15% soft corridorInflation 2.5%Salary Increases 3.50% to 10.5% including inflationInvestment Rate of Return 6.75%Retirement Age Experience-based table of rates that are specific to the Pool's plan of benefits.

Last updated for the 2015 valuation pursuant to an experience study of the period 2010-2014.

Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male ratesmultiplied by 109% and female rates multiplied by 103% and projected on a fullygenerational basis with scale BB.

Other Information:Notes There were no benefit changes during the year.

2016 Plan Valuation Methods and Assumptions

Long-term Expected RealAsset Class Target Allocation Rate of Return (Arithmetic)

Domestic Equity 17.5% 4.55%International Equity 17.5% 6.35%Core Fixed Income 10.0% 1.00%Non-Core Fixed Income 20.0% 3.90%Real Return 10.0% 3.80%Real Estate 10.0% 4.50%Absolute Return 10.0% 3.75%Private Equity 5.0% 7.50% Total 100.0%

Pension Expense and Deferred Outflows and Inflows of Resources Related to Pensions For the year ended September 30, 2018, the Pool recognized pension expense of $3,296,829, which was the same amount of pension expense for the Pool reported by TMRS (calendar year basis).

Schedule of Pension ExpenseAt December 31, 2017

1. Total Service Cost 4,173,329$ 2. Interest (on the Total Pension Liability) 9,012,5083. Current Period Benefit Changes 04. Employee Contribution (Reduction of Expenses) (1,692,619)5. Projected Earnings on Plan Investments (Reduction of Expenses) (8,710,895)6. Administrative Expense 92,6927. Other Changes in Fiduciary Net Position 4,6988. Recognition of Current Year Outflows (Inflows) of Resources - Liabilities 49,6078. Recognition of Current Year Outflows (Inflows) of Resources - Assets (1,837,969)9. Amortization of Prior Year Outflows (Inflows) of Resources - Liabilities 395,44310. Amortization of Prior Year Outflows (Inflows) of Resources - Assets 1,810,035 Total 3,296,829$

1% Decrease in Discount Rate (5.75%)

Discount Rate (6.75%)

1% Increase in Discount Rate (7.75%)

Pool's net pension (asset) liability 15,264,394$ (5,005,695)$ (21,776,048)$

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

Schedule of Changes in Net Pension Liability and Related RatiosDecember 31 Measurement Date

A. Total pension liability 2017 20181. Service Cost 4,173,329$ 4,043,502$ 2. Interest (on the Total Pension Liability) 9,012,508 8,316,6163. Changes of benefit terms - - 4. Difference between expected and actual experience 296,152 629,506 5. Changes of assumptions - - 6. Benefit payments, including refunds of employee contributions (2,761,390) (2,728,666) 7. Net change in total pension liability 10,720,599 10,260,958 8. Total pension liability - beginning 132,812,663 122,551,7059. Total pension liability - ending 143,533,262$ 132,812,663$

B. Plan fiduciary net position1. Contributions - employer 2,754,077$ 2,407,378$ 2. Contributions - employee 1,692,619 1,636,8423. Net investment income 17,900,740 7,863,0364. Benefit payments, including refunds of employee contributions (2,761,390) (2,728,666)5. Administrative Expenses (92,692) (88,740)6. Other (4,698) (4,781)7. Net change in plan fiduciary net position 19,488,656 9,085,069 7a. Contribution - employer accrual to fund UAAL*8. Plan fiduciary net position - beginning 129,050,301 119,965,1329. Plan fiduciary net position - ending 148,538,957$ 129,050,201$

C. Net pension (asset) liability [A.9 - B.9] (5,005,695)$ 3,762,462$

D. 103.49% 97.17%

E. Covered-employee payroll 24,179,194$ 23,171,933$

F. Net pension (asset) liability as a % of covered employee payroll [C / E] -20.70% 16.24%

Plan fiduciary net position as a % of the total pension liability [B.9 / A.9]

For the year ended September 30, 2017, the Pool recognized pension expense of $5,174,279, which was the same amount of pension expense for the Pool reported by TMRS (calendar year basis).

At September 30, 2018, the Pool reported deferred outflows and inflows of resources related to pensions from the following sources:

Schedule of Pension ExpenseAt December 31, 2016

1. Total Service Cost 4,043,502$ 2. Interest (on the Total Pension Liability) 8,316,6163. Current Period Benefit Changes 04. Employee Contribution (Reduction of Expenses) (1,636,942)5. Projected Earnings on Plan Investments (Reduction of Expenses) (7,847,896)6. Administrative Expense 88,7407. Other Changes in Fiduciary Net Position 4,7818. Recognition of Current Year Outflows (Inflows) of Resources - Liabilities 104,2238. Recognition of Current Year Outflows (Inflows) of Resources - Assets (3,028)9. Amortization of Prior Year Outflows (Inflows) of Resources - Liabilities 291,22010. Amortization of Prior Year Outflows (Inflows) of Resources - Assets 1,813,063 Total 5,174,279$

Total (Inflow) or Outflow of Resources

2017 Recognized in current pension expense

Deferred (Inflow)/Outflow in future expense

Prior Years'*Difference between expected and actual experience 1,168,696$ 262,688$ 906,008$ Difference in assumptions changes 554,917 132,755 422,162Difference between projected and actual earnings on pension plan investments 5,172,312 1,810,035 3,362,277

2017 Plan YearDifference between expected and actualexperience 296,152 49,607 246,545Difference in assumptions changes - - - Difference between projected and actual earnings on pension plan investments (9,189,845) (1,837,969) (7,351,876)Deferred Pension Items (1,997,768) 417,116 (2,414,884)Contributions made subsequent to measurement date 2,129,414 2,129,414 Total 131,646$ 417,116$ (285,470)$

* Prior Years' is composed of Plan Years 2014 - 2016.

Schedule of Outflows and Inflows - Current and Future Expenses

At September 30, 2017, the Pool reported deferred outflows and inflows of resources related to pensions from the following sources:

The schedule below reflects the deferred outflows and inflows of resources at September 30, 2018 that will be amortized in future pension expense.

Pension Charges (Credits) The Pool recorded Pension Expense reconciling items as Pension Charges (Credits) as follows:

Total (Inflow) or Outflow of Resources

2016 Recognized in current pension expense


Prior Years' *Difference between expected and actual experience 801,878$ 158,465$ 643,413$ Difference in assumptions changes 687,672 132,755 554,917 Difference between projected and actual earnings on pension plan investments 6,997,487 1,813,063 5,184,424

2016 Plan Year

Difference between expected and actual experience 629,506 104,223 525,283Difference in assumptions changes - - - Difference between projected and actual earnings on pension plan investments (15,140) (3,028) (12,112)Deferred Pension Items 9,101,403 2,205,478 6,895,925Contributions made subsequent to measurement date 2,051,897 - 2,051,897 Total 11,153,300$ 2,205,478$ 8,947,822$

* Prior Years' is composed of Plan Years 2014 - 2015.

Schedule of Outflows and Inflows - Current and Future Expenses

Pension Charges (Credits) (2017)Capitalized TMRS Contributions (142,532)$ Changes in Deferred Contributions (13,365)Differences Between Contributions per the Pool and TMRS (53)

(155,950)

Pension Charges (Credits) (2016) -$

Schedule of Outflows and Inflows - Future Pension Expenses

Year

Net deferred outflows(inflows) of

resources*2018 417,116$ 2019 162,3512020 (1,410,004)2021 (1,636,632)2022 52,285Thereafter 0 *Total (2,414,884)$ *Excludes contributions of $2,129,414 remitted to TMRSsubsequent to the December 31, 2017 measurement date

As a result of Pension Charges (Credits), the following is the Pension Expense line item amount as reported on the financial statements:

Restricted Net Position The Pool restricted net position for pension-related assets (liabilities) due to the expected volatility in changes to the fair value of pension investments and outflow (inflows) of pension resources: Supplemental Death Benefits Plan The Pool also participated in the cost sharing multiple-employer defined benefit group-term life insurance plan operated by TMRS known as the Supplemental Death Benefits Fund (SDBF). The Board of Trustees authorized the Pool to provide group-term life insurance coverage to both current and retired employees. The Pool may discontinue participation in the SDBF by Board authorization before November 1 of any year to be effective the following January 1st. 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 covered by an “other postemployment benefit” that pays a death benefit of $7,500 per employee. The Pool contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during employee’s entire careers. The Pool’s contributions to the TMRS SDBF for the fiscal years ended September 30, 2018 and 2017 were $52,005 and $50,010, respectively, which equaled the required contributions each year.

Net Pension Asset 5,005,695$ Deferred Outflow of Pension Resources (Future Expenses) (2,414,884)Deferred Outflow of Pension Resources (Contributions) 2,129,414Restricted Net Position @ September 30, 2018 4,720,225$

Deferred Outflow of Pension Resources (Future Expenses) 6,895,925$ Deferred Outflow of Pension Resources (Contributions) 2,051,897Restricted Net Position @ September 30, 2017 8,947,822$

Restricted Net Position @ September 30, 2018

Restricted Net Position @ September 30, 2017

Pension Expense as Reported on the Financial Statements2017 2016

Pension Expense 3,296,829$ 5,174,279$ Pension Charges (Credits) (155,950) -Capitalized Pension Expense - (45,758)Reported Pension Expense 3,140,879$ 5,128,521$

NOTE 11 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) Plan Description The Pool provides all of its eligible employees a defined benefit group-term life insurance through the TMRS SDBF. The SDBF covers both active and retiree benefits with no segregation of assets, and therefore doesn’t meet the definition of a trust under GASB Statement No. 75 Accounting and Financial Reporting of Postemployment Benefits Other Than Pensions (i.e., no assets are accumulated for other postemployment benefits or OPEB, and as such, the SDBF is considered to be an unfunded OPEB plan. The retiree portion of the SDBF is not considered a cost sharing plan and is instead considered a single-employer, defined benefit OPEB plan. TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for TMRS. The report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by TMRS. This report may be obtained from the TMRS website at www.tmrs.com. Questions concerning the Pool’s OPEB provisions should be directed to the Chief Financial Officer at the Texas Municipal League Intergovernmental Risk Pool at (512) 491-2300. Benefits Provided Benefit provisions are adopted by the governing body of the Pool, within the options available in the state statutes governing TMRS. The death benefits 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). The death benefits for retirees is considered a postemployment benefit (OPEB) and is a fixed amount of $7,500 per employee. 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). Employees covered by benefit terms At the December 31, 2017 valuation and measurement date, the following numbers of employees were covered by the benefit terms: Contributions The Pool contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy of the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year. The intent is not to pre-fund retiree term life insurance. The Pool’s contributions to TMRS for the plan year ended December 31, 2017 were $2,418 for the retiree-only portion (OPEB). Total OPEB Liability The Pool’s Total OPEB Liability of $652,046 was measured as of December 31, 2017 (date of the actuarial valuation). For 2017-18, the Pool recorded a prior period adjustment as of October 1, 2017 reflecting the cumulative effect of adopting GASB 75 of $555,284, which represents the Total OPEB Liability as of the December 31, 2016 measurement date.

Plan Valuation Year2017

Inactive employees currently receiving benefits 65Inactive employees entitled to but not yet receiving benefits 21Active employees 245Total 331

Plan/Calendar YearTotal SDB

Contribution RateRetiree Portion of SDB

Contribution Rate2017 0.21% 0.01%2018 0.20% 0.01%

Schedule of Contributions (Retiree-only portion of the rate, for OPEB)

Actuarial Assumptions: The actuarial assumptions used in the December 31, 2017 valuation were based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014. The Total OPEB Liability was determined using the following actuarial assumptions:

Discount Rate The discount rate used to measure the Total OPEB Liability was 3.31% at December 31, 2017. The discount rate was based on the Fidelity Index’s “20-Year Municipal GO AA Index” rate as of December 31, 2017. The following presents the Total OPEB Liability of the Pool, as well as what the Pool’s Total OPEB Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.31%) or 1-percentage-point higher (4.31%) than the current rate: Changes in the Total OPEB Liability

1% Decrease in Discount Rate (2.31%)

Current Discount Rate (3.31%)

1% Increase in Discount Rate (4.31%)

Total OPEB Liability 797,570$ 652,046$ 540,244$

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

Changes in Total OPEB Liability 2017Total OPEB Liability - beginning of year 555,284$ Changes for the year: Service Cost 21,761 Interest on Total OPEB Liability 21,355 Changes in benefit terms - Differences between expected and actual experience - Chnages in assumptions or other inputs 56,064 Benefit payments** (2,418) Net Changes 96,762 Total OPEB Liability - end of year 652,046$

Covered Payroll 24,179,194

Total OPEB Liability as a Percentage of Covered Payroll 2.7%

Schedule of Changes in Total OPEB LiabilityDecember 31 Measurement Date

OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the year ended September 30, 2018, the Pool recognized OPEB expense of $51,987, which was the same amount of pension expense for the Pool reported by TMRS (calendar year basis).

At September 30, 2018, the Pool reported deferred outflows and inflows of resources related to the OPEB from the following sources:

The schedule below reflects the deferred outflows and inflows of resources at September 30, 2018 that will be amortized in future pension expense.

Schedule of OPEB ExpenseAt December 31, 2017

Service Cost 21,761$ Interest on Total OPEB Liability 21,355Changes in benefit terms - Employer administrative costs - Recognition of deferred outflows/inflows of resources:

Difference between expected and actual experience - Changes in assumptions or other inputs 8,871

Total OPEB Expense 51,987$

Total (Inflow) or Outflow of

Resources

2017 Recognized in current OPEB

expense


Due to LiabilitiesDifference between expected and actualexperience -$ -$ -$

Change in assumptions 56,064 8,871 47,193

Contributions made subsequent to measurement date 1,871 Total 56,064$ 8,871$ 49,064$

Schedule of Deferred Outflows and Inflows - Current and Future Expenses

Schedule of Outflows and Inflows - Future OPEB Expenses

Year

Net deferred outflows(inflows) of

resources*

2018 8,871$ 2019 8,8712020 8,8712021 8,8712022 8,871Thereafter 2,838 Total 47,193$

NOTE 12 - CONTINGENCIES In the normal course of operations, the Pool is involved in litigation related to certain claims. In the opinion of management, the disposition of these matters will not have a materially adverse effect on the Pool’s financial position.

NOTE 13 – RECONCILIATION OF CLAIM RESERVES BY CONTRACT TYPE

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

Reserve for losses and loss adjustment expenses at beginning of year $149,378,885 $141,400,353 $96,312,599 $88,817,124 $14,201,263 $13,279,363 $19,000 -$ $53,997,986 $36,130,736 $5,300,000 $5,000,000 $319,209,733 $284,627,576Incurred claims and claim adjustment expenses

Provision for insured events of current fiscal year 43,171,802 49,940,378 41,313,408 39,388,981 40,374,392 40,736,373 - 15,000 3,433,645 31,455,176 1,200,000 300,000 129,493,247 161,835,908Change in provision for insured events of prior fiscal years 3,661,776 568,949 1,423,237 1,953,917 (1,544,020) (2,260,463) (11,869) 9,042 12,045,896 6,647,390 - - 15,575,020 6,918,835

Total incurred claims and claim adjustment expenses 46,833,578 50,509,327 42,736,645 41,342,898 38,830,372 38,475,910 (11,869) 24,042 15,479,541 38,102,566 1,200,000 300,000 145,068,267 168,754,743

Payments:

Claims and claim adjustment expenses attributable to insured events of current fiscal year 16,715,820 18,145,868 5,390,224 4,297,445 27,602,635 31,103,074 - 5,042 18,373 2,201,582 - - 49,727,052 55,753,011

Claims and claim adjustment expenses attributable to insured events of prior fiscal years 24,102,822 24,689,013 37,289,795 29,549,978 80,830,802 26,974,118 7,131 - 28,457,415 18,033,734 - - 170,687,965 99,246,843

Reinsurance recoveries received attributable to insured events of current fiscal year - - - - (4,585) (2,201,582) - - - - - - (4,585) (2,201,582)Change in reinsurance recoverable on paid losses (153,187) (304,086) (45,649) - (71,189,140) (18,321,600) - - - - - - (71,387,976) (18,625,686)

Net total payments 40,665,455 42,530,795 42,634,370 33,847,423 37,239,712 37,554,010 7,131 5,042 28,475,788 20,235,316 - - 149,022,456 134,172,586

Reserve for losses and loss adjustment expenses at end of year $155,547,008 $149,378,885 $96,414,874 $96,312,599 $15,791,923 $14,201,263 - $19,000 $41,001,739 $53,997,986 $6,500,000 $5,300,000 $315,255,544 $319,209,733

WORKERS'

The schedule below presents the changes in claims liabilities for the years ended September 30, 2018 and 2017 for Workers' Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds:

STABILITY TOTALCOMPENSATION LIABILITY PROPERTY COASTAL STORM REINSURANCE

Prior fiscal year's net reserves on a combined basis increased by $15,575,020 and $6,918,835 in 2018 and 2017, respectively. Both 2018 and 2017 changes in property claims reflect significant prior accident years' weather related experience.

REQUIRED SUPPLEMENTARY INFORMATION

September 30, 2018

TEN-YEAR CLAIMS DEVELOPMENT INFORMATION The following tables illustrate how earned revenue (net of reinsurance) and investment income compare to related cost of loss (net of reinsurance) and other expenses as of the end of each of the last ten years. The rows of the table are defined as follows: (1) This line shows the total of each fiscal year’s gross earned contributions and investment revenue,

contributions placed with reinsurers, and net earned contributions and reported investment revenue. (2) This line shows each fiscal year’s other operating costs, including overhead and claims’ expense that

cannot be allocated to individual claims. (3) This line shows the gross incurred claims and allocated claim adjustment expenses, claims assumed

by reinsurers, and net incurred claims and allocated claim adjustment expenses (both paid and accrued) as originally reported at the end of the first year in which the event that triggered coverage under the contract occurred (called fund year).

(4) This section of 10 rows shows the cumulative net amounts paid as of the end of successive years for

each fund year. (5) This line shows the latest re-estimated amount of claims assumed by reinsurers as of the end of the

current year for each accident year. (6) This section of 10 rows shows how each fund year’s net incurred claims increased or decreased as of

known claims, re-evaluation of existing information on known claims, as well as emergence of new claims not previously known.)

(7) This line compares the latest re-estimated incurred claims amount to the amount originally

established (line 3) and shows whether this latest estimate of claims cost is greater or less than originally thought.

As data for individual fund years mature, the correlation between original estimates and re-estimated amounts is commonly used to evaluate the accuracy of incurred claims currently recognized.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Contribution and Investment revenues: Earned 81,630$ 73,463$ 67,992$ 62,110$ 49,607$ 66,569$ 69,660$ 74,831$ 68,263$ 66,358$ Assumed by reinsurers* 4,118 3,912 2,598 1,778 1,964 1,653 1,858 1,938 2,028 2,104 Net 77,512 69,551 65,394 60,332 47,643 64,916 67,802 72,893 66,235 64,254

2 Unallocated expenses 18,670 19,423 19,902 20,559 21,625 19,325 20,239 20,612 20,434 20,844

3 Estimated incurred claims and allocatedexpenses, end of fund year: Incurred 55,033 46,768 51,054 50,659 50,879 56,755 47,907 51,719 49,956 43,158 Assumed by reinsurers 80 46 42 5 238 11 11 11 16 36 Net incurred 54,953 46,722 51,012 50,654 50,641 56,744 47,896 51,708 49,940 43,122

4 Paid (cumulative) as of: End of fund year 18,547 16,816 19,781 18,476 20,075 20,811 17,705 17,379 18,145 16,721 One year later 31,153 28,734 32,363 30,781 29,849 34,882 31,669 29,999 31,038 Two years later 33,834 31,168 35,169 32,847 33,043 39,701 34,884 32,999 Three years later 35,151 32,081 35,692 33,412 34,858 40,915 35,901 Four years later 35,888 31,634 36,266 34,041 36,304 41,471 Five years later 35,436 32,017 36,656 34,277 37,207 Six years later 35,986 32,477 36,937 34,740 Seven years later 36,415 32,736 37,144 Eight years later 36,760 32,912 Nine years later 37,057

5 Re-estimated claims and expensesassumed by reinsurers: 0 0 0 17 0 0 60 1 0 36

6 Re-estimated incurred claims and allocated expenses: End of fund year 54,953 46,722 51,012 50,654 50,641 56,744 47,896 51,708 49,940 43,122 One year later 53,533 46,511 49,474 47,134 53,460 56,860 48,141 49,599 46,971 Two years later 44,894 40,536 45,072 43,760 50,556 54,268 45,689 46,451 Three years later 42,308 38,761 43,816 42,468 47,295 53,588 44,805 Four years later 41,994 40,357 43,040 41,529 46,970 54,033 Five years later 43,622 39,809 42,082 41,940 49,222 Six years later 43,344 37,664 41,763 41,196 Seven years later 41,255 37,445 41,689 Eight years later 41,115 37,655 Nine years later 41,377

7 (Decrease) increase in estimated incurredclaims and expense from endof fund year: (13,576) (9,067) (9,323) (9,458) (1,419) (2,711) (3,091) (5,257) (2,969) 0

Prior to fiscal year ending September 30, 2013, line 4 includes payments to Lifetime Benefits and line 6 reflects discounts taken on claims transferred to Lifetime Benefits (see Note 1).

*Including Reinsurance Fund, Large Loss Fund and Outside Reinsurers.

WORKERS' COMPENSATION

Fiscal and Fund Year Ended September 30(In Thousands of Dollars)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Contribution and Investment revenues: Earned 55,158$ 52,577$ 52,207$ 49,640$ 40,022$ 54,224$ 55,056$ 54,640$ 48,383$ 48,272$ Assumed by reinsurers* 1,221 1,319 892 786 807 1,014 946 933 1,120 1,162 Net 53,937 51,258 51,315 48,854 39,215 53,210 54,110 53,707 47,263 47,110


3 Estimated incurred claims and allocatedexpenses, end of fund year: Incurred 29,692 28,983 29,284 31,810 35,503 35,487 35,357 36,718 39,389 41,303 Assumed by reinsurers 103 39 21 12 5 2 0 0 0 0 Net incurred 29,589 28,944 29,263 31,798 35,498 35,485 35,357 36,718 39,389 41,303


5 Re-estimated claims and expensesassumed by reinsurers: 0 0 0 0 0 0 0 0 0 0


7 (Decrease) increase in estimated incurredclaims and expense from endof fund year: 2,967 3,778 3,783 1,126 1,222 3,259 5,310 2,327 401 0


LIABILITY


2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Contribution and Investment revenues: Earned 45,467$ 43,743$ 46,672$ 49,539$ 48,290$ 55,573$ 57,607$ 60,063$ 64,611$ 71,921$ Assumed by reinsurers* 9,699 9,978 10,087 11,507 11,947 10,666 9,525 9,214 13,238 16,751 Net 35,768 33,765 36,585 38,032 36,343 44,907 48,082 50,849 51,373 55,170


3 Estimated incurred claims and allocatedexpenses, end of fund year: Incurred 22,672 24,257 29,538 30,800 29,082 37,537 47,339 64,714 96,491 41,127 Assumed by reinsurers 31 50 5 380 212 4,225 10,312 22,280 55,755 753 Net incurred 22,641 24,207 29,533 30,420 28,870 33,312 37,027 42,434 40,736 40,374


5 Re-estimated claims and expensesassumed by reinsurers: 46 76 661 234 3,983 21,419 11,193 23,144 120,522 753


7 (Decrease) increase in estimated incurredclaims and expense from endof fund year: (1,425) (2,007) 231 2,046 1,031 (4) (1,685) (475) (1,726) 0


PROPERTY


2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Contribution and Investment revenues:Earned $253 $902 $1,092 $1,359 $898 $1,449 $1,146 $1,134 $452 $125Assumed by reinsurers 1 9 11 15 15 16 11 10 7 4Net 252 893 1,081 1,344 883 1,433 1,135 1,124 445 121

2 Unallocated Expenses 14 12 20 10 17 120 129 133 133 137

3 Expenses incurred claims and allocatedexpenses, end of fund year: Incurred 0 0 0 0 0 0 0 2 15 0 Assumed by reinsurers 0 0 0 0 0 0 0 0 0 0 Net incurred 0 0 0 0 0 0 0 2 15 0

4 Paid (cumulative) as of:End of fund year 0 0 0 0 0 0 0 2 0 0One year later 0 0 0 0 0 0 0 5 0Two years later 0 0 0 0 0 0 0 14Three years later 0 0 0 0 0 0 0Four years later 0 0 0 0 0 0Five years later 0 0 0 0 0Six years later 0 0 0 0Seven years later 0 0 0Eight years later 0 0Nine years later 0

5 Re-estimated incurred claims and expensesassumed by reinsurers: 0 0 0 0 0 0 0 0 0 0

6 Re-estimated incurred claims and allocated expenses:End of fund year 0 0 0 0 0 0 0 2 15 0One year later 0 0 0 0 0 0 0 9 0Two years later 0 0 0 0 0 0 0 14Three years later 0 0 0 0 0 0 0Four years later 0 0 0 0 0 0Five years later 0 0 0 0 0Six years later 0 0 0 0Seven years later 0 0 0Eight years later 0 0Nine years later 0

7 Increase in estimated incurredclaims and expense from end of fund year: 0 0 0 0 0 0 0 14 (15) 0

COASTAL STORM


2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Contribution and Investment revenues:Earned $15,844 $12,279 $11,500 $10,343 $2,269 $11,254 $10,757 $10,827 $6,052 $8,424Assumed by reinsurers 0 0 0 0 0 0 0 0 0 0Net 15,844 12,279 11,500 10,343 2,269 11,254 10,757 10,827 6,052 8,424

2 Unallocated Expenses 80 86 96 105 110 1,017 1,086 1,107 1,097 1,114

3 Expenses incurred claims and allocatedexpenses, end of fund year: Incurred 231 200 80 147 450 4,225 9,462 22,417 31,455 3,434 Assumed by reinsurers 0 0 0 0 0 0 0 0 0 0 Net incurred 231 200 80 147 450 4,225 9,462 22,417 31,455 3,434

4 Paid (cumulative) as of:End of fund year 0 0 5 0 105 0 0 3,351 2,202 5One year later 46 76 5 0 195 1,830 4,442 14,462 25,444Two years later 46 76 5 0 556 7,092 8,567 16,722Three years later 46 76 5 0 924 7,850 10,438Four years later 46 76 169 14 2,904 8,012Five years later 46 76 169 59 3,827Six years later 46 76 169 59Seven years later 46 76 169Eight years later 46 76Nine years later 46

5 Re-estimated incurred claims and expensesassumed by reinsurers: 0 0 0 0 0 0 0 0 0 0

6 Re-estimated incurred claims and allocated expenses:End of fund year 231 200 80 147 450 4,225 9,462 22,417 31,455 3,434One year later 185 99 23 51 1,159 3,466 10,909 28,183 45,342Two years later 52 89 9 188 1,942 12,350 11,066 24,675Three years later 49 77 10 112 3,739 12,622 12,047Four years later 49 81 180 113 3,921 12,486Five years later 46 81 174 92 5,021Six years later 46 81 174 64Seven years later 46 81 174Eight years later 46 81Nine years later 46

7 (Decrease) increase in estimated incurredclaims and expense from end of fund year: (185) (119) 94 (83) 4,571 8,261 2,585 2,258 13,887 0

REINSURANCE



September 30, 2018

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS The schedule below shows the changes in Total Pension Liability less the changes in Fiduciary Net Pension, resulting in the Net Pension (Asset) Liability calculation for the Pool.

Schedule of Changes in Net Pension Liability and Related RatiosDecember 31 Measurement Date

A. Total pension liability 2014 2015 2016 20171. Service Cost 3,462,948$ 3,729,750$ 4,043,502$ 4,173,329$ 2. Interest (on the Total Pension Liability) 7,091,398 7,854,694 8,316,616 9,012,5083. Changes of benefit terms - 2,029,099 - - 4. Difference between expected and actual experience 177,106 810,546 629,506 296,152 5. Changes of assumptions - 820,427 - - 6. Benefit payments, including refunds of employee contributions (1,961,917) (2,017,510) (2,728,666) (2,761,390) 7. Net change in total pension liability 8,769,535$ 13,227,006$ 10,260,958$ 10,720,599$ 8. Total pension liability - beginning 100,555,164 109,324,699 122,551,705 132,812,6639. Total pension liability - ending 109,324,699$ 122,551,705$ 132,812,663$ 143,533,262$

B. Plan fiduciary net position1. Contributions - employer 8,865,171$ 2,938,215$ 2,407,378$ 2,754,077$ 2. Contributions - employee 1,532,174 1,579,447 1,636,942 1,692,6193. Net investment income 5,700,478 167,819 7,863,036 17,900,7404. Benefit payments, including refunds of employee contributions (1,961,917) (2,017,510) (2,728,666) (2,761,390)5. Administrative Expenses (59,507) (102,194) (88,740) (92,692)6. Other (4,892) (5,055) (4,781) (4,698)7. Net change in plan fiduciary net position 14,071,507$ 2,560,722$ 9,085,169$ 19,488,656$ 7a. Contribution - employer accrual to fund UAAL* - 3,700,000 - 8. Plan fiduciary net position - beginning 99,632,903 113,704,410 119,965,132 129,050,3019. Plan fiduciary net position - ending 113,704,410$ 119,965,132$ 129,050,301$ 148,538,957$

C. Net pension (asset) liability [A.9 - B.9] (4,379,711)$ 2,586,573$ 3,762,362$ (5,005,695)$

D. 104.01% 97.89% 97.17% 103.49%

E. Covered-employee payroll 21,888,198$ 22,563,522$ 23,171,933$ 24,179,194$

F. Net pension (asset) liability as a % of covered employee payroll [C / E] -20.01% 11.46% 16.24% -20.70%* Reflects accrual to fund at 9/30/16, with payment at or before December 31, 2016, the December 31, 2015 Plan Valuation's Unfunded Actuarial Accrued Liability (UAAL).

Plan fiduciary net position as a % of the total pension liability [B.9 / A.9]


September 30, 2018 SCHEDULE OF EMPLOYER PENSION CONTRIBUTIONS The schedule below shows the Pool’s required annual contributions from the actuarial valuation, compared with the actual contributions remitted. The schedule is based on the Pool’s respective fiscal year-end, not the valuation/measurement date. The Actuarially Determined Contribution (ADC) dollar amount is calculated by multiplying the Pool’s Full Retirement Rate (excluding portion of rate for Supplemental Death Benefits Fund) by the applicable payroll amount. The Pool contributes to the TMRS Plan at the actuarially determined Full Retirement Rate. The difference between the ADC and Pool contributions equals the contribution deficiency/excess).

Notes to Schedule Methods and assumptions used to determine the contribution rates for the 12/31/17 valuation date can be found at Note 11.

.

Schedule of Contributions(fiscal year end)

2015 2016 2017 2018Actuarially Determined Contribution 2,904,530$ 2,153,514$ 2,742,274$ 2,622,539$

Contributions in relation to the actuariallydetermined contribution 2,908,414$ 2,535,600$ 2,679,841$ 2,818,177$

Contribution deficiency (excess) (3,884)$ (382,086)$ 62,433$ (195,638)$ Covered employee payroll 22,308,219$ 23,007,631$ 24,097,309$ 24,764,299$ Contributions as a percentage of coveredemployee payroll 13.04% 11.02% 11.12% 11.38%

Actuarially Determined Contribution Rate 13.02% 9.36% 11.38% 10.59%

Members

TML INTERGOVERNMENTAL RISK POOL

Board of Trustees

General Counsel

Executive Director

ChiefInformation

Officer

ChiefFinancialOfficer

Director of Legal Services

Deputy Executive Director

Finance&

Investments

Human Resources

InformationTechnology

Workers' Compensation

Claims

Office of Project

Management & Analytics

Legal

Subrogation

Liability

Member Services

Underwriting

Loss Prevention

Property

Pool Membership

as of October 1, 2018

Abbott Abernathy Abilene Abilene City of/Transit Mgmt of Abilene Abilene Housing Authority Ables Springs SUD Ackerly Addison Town of Adrian Agua Dulce Airline Improvement District Alamo Alamo Area COG Alamo Heights Alamo Housing Authority Alamo Regional Mobility Authority Alamo SWCD #330 Alba Alba Housing Authority Albany Aledo Alice Alice Housing Authority Allen Alliance Regional Water Authority Alma Alpine Alpine Housing Authority Alto Alto Housing Authority Alton Alvarado Alvin Alvord Amarillo Ames Amherst Anahuac Anderson Anderson CAD Anderson County Housing Authority Anderson Mill Limited District Andrews Andrews CAD Angelina County WCID #4 Angelina County/City Health District Angleton Angleton Drainage District Angus Anna Annetta Annetta North Annetta South Annona Anson Anson Housing Authority Anthony Housing Authority Anthony Town of Anton Appleby Aquilla Water Supply District Aransas CAD Aransas County Navigation District #1 Aransas Pass

Aransas Pass Housing Authority Archer CAD Archer City Archer City Housing Authority Arcola Argyle Ark-Tex COG Arlington Entertainment AMD Arlington Housing Authority Arp Asherton Aspermont Aspermont Housing Authority Atascocita Joint Operations Board Atascosa Central Appraisal District Athens Athens Municipal Water Auth Atlanta Atlanta Property Management Aubrey Aud's Creek Watershed Improvement Dist Aurora Austin - 505 Barton Springs Road Austin - City Hall Austin - Convention Center Austin - Economic & Redevelopment Svcs Austin - Housing Finance Austin - Neighborhood Partnering Program Austin - Rosewood Community Development Austin CAD Austin County ESD #3 Austin Housing Authority Austwell Avery Avery Housing Authority Avinger Avinger Housing Authority Azle Bacliff MUD Bailey Bailey Central Appraisal District Bailey's Prairie Village of Baird Baird Housing Authority Balch Springs Balcones Heights Balcones Heights Crime CPD Ballinger Ballinger Housing Authority Balmorhea Balmorhea Housing Authority Bandera Bandera County Central Appraisal Dist Bandera County FWSD #1 Bandera County River Authority & GWD Bandera SWCD Bangs Bangs Housing Authority Bardwell Barry City of

Barstow Bartlett Bartlett Housing Authority Barton Springs/Edwards Aquifer Bartonville Bastrop Bastrop Central Appraisal District Bastrop County ESD #1 Bastrop County MUD #1 Bastrop County SWCD #340 Bastrop County WCID #2 Bastrop County WCID #3 Bastrop Housing Authority Bay City Bay City Housing Authority Baylor CAD Bayou Vista Bayside Town of Baytown Baytown Housing Authority Bayview Irrigation District #11 Bayview MUD Bayview Town of Beach City Bear Creek Village of Beasley Beaumont Housing Authority Beckville Beckville Housing Authority Bedford Bedias Bee CAD Bee Cave Bee Development Authority Bee GCD Beeville Beeville Housing Authority Beeville Water Supply District Bell CAD Bell County MUD #1 Bell County MUD #2 Bell County Public Health District Bell County WCID #2 Bellaire Bellevue Bellmead Bells Bellville Bellville Housing Authority Belton Belton Housing Authority Belvedere MUD Benavides Benbrook Benbrook Public Library District Benbrook Water Authority Benjamin Berryville Bertram Bethany SUD Beverly Hills Bevil Oaks Bexar Appraisal District Bexar County Housing Authority

Bexar County WCID #10 Bexar Metro 911 District Bexar-Medina-Atascosa Counties WCID #1 Big Bend SWCD #227 Big Lake Big Oaks MUD Big Sandy Big Sandy Housing Authority Big Spring Big Spring Housing Authority Big Wells Bishop Bishop Hills Village of Bistone MWSD Blackwell Blanco Blanco Co North Lib Dist/Johnson City Blanco County South Library Dist/Blanco Blanco-Pedernales GCD Blanket Block House MUD Bloomburg Blooming Grove Blooming Grove Housing Authority Blossom Blossom Prairie Housing Authority Blue Mound Blue Ridge Blum Boerne Bogata Bogata Housing Authority Bois D'arc MUD Bonham Bonney Village of Booker Booker-Booker Housing Foundation Borger Borger Housing Authority Bosque County Central Appraisal District Bovina Bovina Housing Authority Bowie Bowie County ESD #1 Bowie County ESD #2 Bowie County Housing Authority Bowie County SWCD Boyd Brackettville Brackettville Housing Authority Brady Brady Housing Authority Brazoria Brazoria CAD Brazoria County Cons/Recl Dist #3 Brazoria County Drainage District #5 Brazoria County FWSD #1 Brazoria County FWSD #2 Brazoria County MUD #23 Brazoria County MUD #24 Brazoria County MUD #25

Brazoria County MUD #35 Brazoria County MUD #61 Brazoria County MUD #66 Brazoria-Fort Bend County MUD #1 Brazos Central Appraisal District Brazos Country Brazos County Emergency 911 Brazos County ESD #1 Brazos Regional Public Utility Agency Brazos River Authority Brazos Transit District Brazos Valley COG Brazos Valley GCD Brazos Valley Solid Waste Mgmt Agency Brazos Valley SWCD #557 Breckenridge Breckenridge Housing Authority Bremond Bremond Housing Authority Brenham Brenham Housing Authority Brewster CAD Brewster Co Groundwater Cons District Briarcliff Village of Briaroaks Bridge City Bridgeport Bridgeport Housing Authority Bright Star-Salem SUD Briscoe CAD Broaddus Brock Bronte Bronte Housing Authority Brookesmith SUD Brookshire Brookshire Municipal Water District Brookside Village Brownfield Brownfield Housing Authority Brownsboro Brownsville Brownsville Housing Authority Brownsville Metro Brownsville Navigation District Brownsville Public Utilities Board Brownwood Brownwood Housing Authority Bruceville-Eddy Brush Country GCD Brushy Creek MUD Brushy Creek Reg Wastewater Treatment Brushy Creek Regional Utility Authority Bryan Bryan Housing Authority Bryson Bryson Housing Authority Buckholts Buda Buena Vista-Bethel SUD Buffalo Buffalo Gap Buffalo Housing Authority

Buffalo Springs Bullard Bulverde Bulverde Area Rural Library District Bunker Hill Village Burkburnett Burkburnett Housing Authority Burke Burleson Burleson CAD Burleson County MUD #1 Burnet Burnet Central Appraisal District Burnet County ESD #1 Burnet Housing Authority Burney Road MUD Burton Byers Bynum Cactus Caddo Basin SUD Caddo Mills Caddo Mills Housing Authority Caldwell Caldwell CAD Caldwell County MUD #1 Caldwell Housing Authority Caldwell Valley MUD #1 Caldwell-Travis SWCD #304 Calhoun CAD Calhoun County DD #11 Calhoun County E911 ECD Calhoun County GCD Calhoun County MUD #1 Calhoun County WCID #1 Calhoun Port Authority Callahan CAD Callahan County Nutrition Project Callahan Divide SWCD #552 Callisburg Calvert Calvert Housing Authority Cameron Cameron Appraisal District Cameron County DD #4 Cameron County ECD Cameron County Housing Authority Cameron County Regional Mobility Auth Cameron Housing Authority Camfield MUD Camino Real Regional Mobility Authority Camp Central Appraisal District Camp Wood Campbell Canadian Caney City Caney Creek MUD Canton Canyon Canyon Falls MUD #1 Canyon Falls WCID #2 Canyon Housing Authority Canyon Lake Comm Library District

Canyon Regional Water Authority Cape Royale Utility District Capital Area COG Capital Area Metropolitan Planning Org Capital Area Rural Transportation System Capital Metro Transportation Authority Caprock Hospital Dist & Floydada EMS Carbon Carmine Carrizo Springs Carrizo Springs Housing Authority Carrollton Carson CAD Carthage Cascades MUD #1 Cash SUD Cashion Community Cass CAD Cass County ESD #1 Castle Hills Castlewood MUD Castro CAD Castroville Cedar Bayou Park Utility District Cedar Hill Cedar Park Celeste Celina Center Center Housing Authority Centerville Centerville Housing Authority Central Harris County Region Water Auth Central Texas COG Central Texas GCD Central Texas Housing Consortium Central Texas Regional Mobility Auth Central Texas Rural Transit District Central WCID Chalk Hill SUD Chambers CAD Chandler Channing Charlotte Chateau Woods MUD Cherokee CAD Chico Childress Childress CAD Childress County Hospital District Childress Housing Authority Chillicothe China China Grove City of Chireno Chisholm Trail SUD Christine Cibolo Cibolo Creek Municipal Authority Cinco MUD #1 Cinco MUD #12 Cinco MUD #3

Cinco MUD #6 Cinco MUD #7 Cinco MUD #8 Cinco MUD #9 Cinco Southwest MUD #1 Cinco Southwest MUD #2 Cinco Southwest MUD #3 Cinco Southwest MUD #4 Cisco Cisco Housing Authority City Park Redevelopment Auth TIRZ #12 Clarendon Clarendon Housing Authority Clarksville Clarksville City Clarksville Housing Authority Claude Clay CAD Clear Brook City MUD Clear Creek Watershed Authority Clear Fork GCD Clear Lake City Water Authority Clear Lake Shores Clearwater Ranch MUD #1 Clearwater UWCD Cleburne Cleveland Cleveland Housing Authority Clifton Clifton Housing Authority Clint Town of CLL MUD #1 Clute Clyde CNP Utility District Coahoma Coastal Bend COG Coastal Plains Community MHMR Center Cochran Central Appraisal District Cockrell Hill Coffee City Coke County SWCD #219 Coke County UWCD Coldspring Coleman Coleman County SUD Coleman Housing Authority College Mound SUD Colleyville Collin Co Central Appraisal District Collin County MUD #1 Collin County SWCD Collinsville Colmesneil Colorado City Colorado City Housing Authority Colorado County CAD Colorado County WCID #2 Colorado Valley Transit District Columbus Comal CAD

Comal Co Water Oriented Recreation Dist Comal County ESD #3 Comal County ESD #7 Comal County WCID #6 Comal Trinity GCD Comanche Comanche Central Appraisal District Comanche Housing Authority Combes Combine Combined Consumers SUD Commerce Commerce Housing Authority Commodore Cove Improvement District Como Como Housing Authority Concho CAD Concho SWCD #201 Concho Valley COG Concho Valley Transit District Conroe Conroe MUD #1 Cooke CAD Coolidge Coolidge Housing Authority Cooper Cooper Housing Authority Coppell Copper Canyon Copperas Cove Copperas Cove Housing Authority Corinth Corinthian Point MUD #2 Corpus Christi Corpus Christi Downtown Management Dist Corpus Christi Gas Utility Department Corpus Christi Housing Authority Corrigan Corrigan Housing Authority Corsicana Corsicana Housing Authority Coryell CAD Coryell City Water Supply District Cotton Center MUD #1 Cotton Center MUD #2 Cottonwood Cottonwood Creek MUD #1 Cottonwood Creek WCID #3 Cottonwood Shores Cotulla Cotulla Housing Authority County Line SUD Coupland Cove Covington Cow Creek GCD Crandall Crane Crane CAD Cranfills Gap Crawford Creedmoor

Cresson Crockett Crockett County GCD Crockett County SWCD Crockett County WCID #1 Crockett Housing Authority Crosby Central Appraisal District Crosby MUD Crosbyton Crosbyton Housing Authority Cross Plains Cross Plains Housing Authority Cross Roads Cross Roads SUD Cross Timber Cross Timbers SWCD #556 Crowell Crowell Housing Authority Crowley Crystal City Crystal City Housing Authority Cuero Cuero Community Hospital Cuero Housing Authority Culberson CAD Culberson County GCD Cumby Cumby Housing Authority Cuney Cut and Shoot Cypress Forest PUD Cypress Hill MUD #1 Cypress Ranch WCID #1 Cypress Springs SUD Cypress Waters Municipal Management Dist Cypress-Klein Utility District Daingerfield Daingerfield Housing Authority Daisetta Dalhart Dallam CAD Dallas Dallas Area Rapid Transit (DART) Dallas CAD Dallas County Flood Control Dist #1 Dallas Housing Authority Dalworth SWCD #519 Dalworthington Gardens Danbury Darrouzett Darrouzett Hospital District Dawson Dawson County Central Appraisal District Dawson Housing Authority Dayton Dayton Housing Authority Dayton Lakes De Leon De Leon Housing Authority Deaf Smith CAD Decatur Decatur Housing Authority

DeCordova Deep East Texas COG Deer Park DeKalb DeKalb Housing Authority Del Rio Del Rio Housing Authority Dell City Delta CAD Delta County MUD Delta County SWCD Denco Area 911 District Denison Denison Housing Authority Dennis Denton Central Appraisal District Denton County FWSD #10 Denton County FWSD #6 Denton County FWSD #7 Denton County Reclamation & Road Dist Denton County Transportation Authority Denton Housing Authority Denver City Denver City Housing Authority Deport Deport Housing Authority DeSoto Detroit Detroit Housing Authority Devers Devil's River SWCD #224 Devine Devine Housing Authority DeWitt CAD DFW International Airport Diboll Diboll Housing Authority Dickens Dickinson Dickinson Management District #1 Dilley Dilley Housing Authority Dimmit CAD Dimmitt DISH Town of Dodd City Dodson Domino Donley County Hospital District Donley County SWCD #127 Donna Donna Housing Authority Dorchester Double Oak Town of Douglassville Draper Driftwood Economic Development Mgmt Dist Dripping Springs Dripping Springs Community Library Dist Driscoll Dublin

Dublin Housing Authority Dumas Duncanville Duval CAD Duval County Cons/Recl District Duval County ESD #1 Duval County GCD Duval County Housing Authority Eagle Lake Eagle Pass Eagle Pass Housing Authority Eagle Pass Waterworks Early Earth East Aldine Management District East Bernard East Cedar Creek FWSD East Central SUD East Downtown Management District East Downtown Redev Auth/Reinv Zone #15 East Fork SUD East Harris County Emergency Communications East Medina County SUD East Montgomery County Improvement Dist East Mountain East Tawakoni East Texas COG East Texas MUD East Travis Gateway Library District Eastland Easton Ecleto Creek Watershed District Ector Ector County Emergency Comm District Edcouch Edcouch Housing Authority Eden Eden Housing Authority Edgecliff Village Town of Edgewood Edgewood Housing Authority Edinburg Edinburg Housing Authority Edmonson Edna Edna Housing Authority Edom Edwards Aquifer Authority Edwards Central Appraisal District Edwards Plateau SWCD El Campo El Campo Housing Authority El Cenizo El Lago El Paso El Paso Central Appraisal District El Paso County 911 District El Paso County Housing Authority El Paso County Tornillo WID El Paso County WCID #4 El Paso Downtown Management District

El Paso Water Utilities Public Service Eldorado Eldorado Housing Authority Electra Electra Housing Authority Elgin Elgin Housing Authority Elkhart Ellis Appraisal District Ellis County ESD #3 Ellis County ESD #9 Ellis County Rural Rail District Ellis-Prairie SWCD Elm Creek Water Control District Elm Creek Watershed Authority Elmendorf Elsa Elsa Housing Authority Emerald Bay MUD Emhouse Emory Enchanted Oaks Encinal Engelman Irrigation District Ennis Ennis Housing Authority Erath CAD Escobares Escondido Creek Watershed District Estelline Euless Eureka Eustace Evadale WCID #1 Evant Everman Fair Oaks Ranch Fairchilds Village of Fairfield Fairview Falfurrias Falfurrias Housing Authority Falfurrias Housing Authority (FmHA) Falls CAD Falls City Falls City Housing Authority Falls County WCID #1 Fannin CAD Fannin County Rural Rail District Fannin County SWCD Fannin County Water Supply Agency Farmers Branch Farmersville Farwell Fate Fayette CAD Fayette County GCD Fayette County WCID Fayetteville Fern Bluff MUD Ferris Ferris Housing Authority First Colony LID First Colony LID #2

First Colony Management District Fisher County Hospital District Five Corners Improvement District Flamingo Isles MUD Flatonia Flatonia Housing Authority Florence Floresville Floresville Electric Light/Power System Floresville Housing Authority Flower Mound Town of Floyd CAD Floydada Floydada Housing Authority Flying L Public Utility District Foard CAD Foard County Hospital District Follett Forest Hill Forest Hill Library District Forney Forsan Fort Bend Co Improvement District #24 Fort Bend County ESD #2 Fort Bend County FWSD #1 Fort Bend County FWSD #2 Fort Bend County LID #10 Fort Bend County LID #14 Fort Bend County LID #17 Fort Bend County MUD #121 Fort Bend County MUD #124 Fort Bend County MUD #141 Fort Bend County MUD #162 Fort Bend County MUD #163 Fort Bend County MUD #165 Fort Bend County MUD #187 Fort Bend County MUD #189 Fort Bend County MUD #199 Fort Bend County MUD #25 Fort Bend County MUD #5 Fort Bend County MUD #50 Fort Bend County MUD #67 Fort Bend County MUD #81 Fort Bend County Toll Road Authority Fort Bend ESD #3 Fort Bend Grand Parkway Toll Road Auth Fort Bend Redevelopment Authority Fort Clark MUD Fort Hancock WCID Fort Stockton Fort Worth Fort Worth - AA Fort Worth Housing Solutions Fort Worth Transportation Authority Four Way SUD Fourth Ward Redevelopment Authority Franklin Franklin CAD Franklin Housing Authority Frankston Fredericksburg Fredericksburg Hospital Authority Freeport

Freer Freer WCID Freestone Central Appraisal District Friendswood Frio CAD Friona Frisco Frisco Housing Authority Fritch Frost Fruitvale Fruitvale Housing Authority Fulshear Fulton Gaines Central Appraisal District Gainesville Gainesville Housing Authority Galena Park Gallatin Galveston Galveston Central Appraisal District Galveston County DD #1 Galveston County DD #2 Galveston County FWSD #6 Galveston County Health District Galveston County MUD #12 Galveston County MUD #14 Galveston County MUD #15 Galveston County MUD #30 Galveston County MUD #39 Galveston County MUD #43 Galveston County MUD #44 Galveston County MUD #46 Galveston County MUD #52 Galveston County MUD #66 Galveston County WCID #1 Galveston County WCID #12 Galveston County WCID #19 Galveston Housing Authority Ganado Garden Ridge Garrett Garrison Gary Gatesville Gatesville Housing Authority Gateway GCD Generation Park Management District George West Georgetown Georgetown Housing Authority Gholson Giddings Gillespie Central Appraisal District Gillespie County SWCD #220 Gillespie County WCID Gilmer Gilmer Housing Authority Gladewater Gladewater Housing Authority Glasscock County SWCD Glasscock GCD Glen Rose Glenn Heights

Gober MUD Godley Golden Crescent Reg Planning Commission Goldsmith Goldthwaite Goldthwaite Housing Authority Goliad Goliad CAD Goliad County GCD Goliad Housing Authority Golinda Gonzales Gonzales CAD Gonzales County ESD #1 Gonzales County SWCD #338 Gonzales County UWCD Gonzales Housing Authority Goodlow Goodrich Gordon Goree Gorman Gorman Housing Authority Graford Graham Graham Regional Medical Center Granbury Granbury Housing Authority Grand Lakes MUD #4 Grand Prairie Grand Saline Grand Saline Housing Authority Grandfalls Grandfalls Housing Authority Grandview Grandview Housing Authority Granger Granger Housing Authority Granite Shoals Granjeno Grapeland Grapeland Housing Authority Grapevine Grapevine Housing Authority Gray CAD Grayson County Housing Authority Grayson County Regional Mobility Auth Greater East End Management District Greater Northside Management District Green Valley SUD Greenbelt Municipal & Industrial WA Greenhawe WCID #2 Greenville Greenville Electric Utility Greenville Housing Authority Gregg CAD Gregory Gregory Housing Authority Grey Forest Grimes CAD Groesbeck Groesbeck Housing Authority Groom

Groves Groveton Groveton Housing Authority Gruver Gulf Coast Water Authority Gulfgate Redevelopment Authority TIRZ #8 Gun Barrel City Gunter Gustine Haciendas Del Norte WID Hackberry Hale CAD Hale Center Hale Center Housing Authority Hale County Housing Authority Hale County SWCD #132 Hall CAD Hall County Hospital District Hall-Childress SWCD #109 Hallettsville Hallettsville Housing Authority Hallsburg Hallsville Haltom City Haltom City Housing Authority Hamilton Hamilton CAD Hamilton Housing Authority Hamilton/Coryell SWCD Hamlin Hamlin Housing Authority Hamlin Memorial Hospital Hansford CAD Hansford SWCD #148 Happy Hardin Hardin County ESD #2 Hardin County ESD #5 Hardin County WCID #1 Hardy/Near Northside RDA/TIRZ #21 Harker Heights Harlingen Harlingen Housing Authority Harris CAD Harris Co Imp Dist3-Upper Kirby Mgt Dist Harris Co Road Improvement District #1 Harris County ESD #12 Harris County ESD #25 Harris County ESD #6 Harris County FWSD #27 Harris County FWSD #45 Harris County FWSD #47 Harris County FWSD #48 Harris County FWSD #58 Harris County FWSD 1A Harris County Housing Authority Harris County Improvement Dist #1 Harris County Improvement Dist #4 Harris County Improvement District #12 Harris County Improvement District #17

Harris County Improvement District #5 Harris County MUD #106 Harris County MUD #11 Harris County MUD #130 Harris County MUD #151 Harris County MUD #152 Harris County MUD #153 Harris County MUD #154 Harris County MUD #156 Harris County MUD #163 Harris County MUD #166 Harris County MUD #189 Harris County MUD #205 Harris County MUD #217 Harris County MUD #222 Harris County MUD #250 Harris County MUD #264 Harris County MUD #286 Harris County MUD #290 Harris County MUD #321 Harris County MUD #322 Harris County MUD #345 Harris County MUD #354 Harris County MUD #355 Harris County MUD #358 Harris County MUD #359 Harris County MUD #360 Harris County MUD #361 Harris County MUD #367 Harris County MUD #372 Harris County MUD #373 Harris County MUD #391 Harris County MUD #396 Harris County MUD #397 Harris County MUD #399 Harris County MUD #407 Harris County MUD #411 Harris County MUD #418 Harris County MUD #419 Harris County MUD #434 Harris County MUD #44 Harris County MUD #450 Harris County MUD #46 Harris County MUD #468 Harris County MUD #473 Harris County MUD #48 Harris County MUD #480 Harris County Municipal Mgmt Dist #1 Harris County Municipal Utility District No. 316 Harris County Utility District #15 Harris County WCID #1 Harris County WCID #116 Harris County WCID #133 Harris County WCID #145 Harris County WCID #155 Harris County WCID #156 Harris County WCID #36 Harris County WCID #50 Harris County WCID #91 Harris County WCID #92 Harrisburg Redevelopment Authority/Houston TIRZ #23 Harrison Central Appraisal District

Harrison County SWCD Hart Hartley CAD Haskell Haskell CAD Haskell Housing Authority Haslet Hawk Cove Hawkins Hawley Hays Hays Central Appraisal District Hays County ESD #3 Hays County ESD #5 Hays County ESD #6 Hays County MUD #5 Hays County SWCD #351 Hays Trinity GCD Hays WCID #1 Hays WCID #2 Headwaters GCD Hearne Hearne Housing Authority Heart of Texas COG Heath Hedley Hedwig Village Helotes Hemphill Hemphill Housing Authority Hempstead Henderson Henderson Co Levee Improvement Dist #3 Henderson County 911 District Henderson County ESD #1 Henderson County ESD #4 Henderson County ESD #6 Henderson County ESD #7 Henderson County Hospital Authority Henderson Housing Authority Henrietta Henrietta Housing Authority Hereford Hewitt Hickory Creek SUD Hickory Creek Town of Hickory UWCD #1 Hico Hico Housing Authority Hidalgo CAD Hidalgo City of Hidalgo County Drainage District #1 Hidalgo County ESD #3 Hidalgo County Housing Authority/Weslaco Hidalgo County Irrigation District #6 Hidalgo County Regional Mobility Auth Hidalgo Housing Authority Hideaway Higgins Higgins/Lipscomb Hospital District High Point SWCD #230 Highland Haven

Highland Park Town of Highland SWCD #210 Highland Village Highlands at Mayfield Ranch MUD Hill CAD Hill Country Community MHMR Center Hill Country Transit District Hill Country UWCD Hill Country Village Hill County Blackland SWCD Hillcrest Village Hillsboro Hilshire Village Hiram Clarke/Fort Bend TIR Zone Hitchcock Hobby Area District Hobby Area Improvement Corporation Hockley CAD Holiday Lakes Town of Holland Holliday Hondo Hondo Creek Watershed Improvement Dist Honey Grove Hood Central Appraisal District Hooks Hopkins CAD Hopkins County Hospital District Hopkins County SWCD Horizon City Horizon Regional MUD Horseshoe Bay Houston Houston CAD Houston Downtown Management District Houston Forensic Science Center Inc Houston Housing Authority Houston TIRZ #24 Houston TIRZ #27 Houston/Galveston Area COG Howard CAD Howard County 911 Howard SWCD #243 Howardwick Howe Hubbard Hubbard Housing Authority Hudson Hudson Oaks Hudspeth County Cons/Recl Dist #1 Hudspeth County ESD #1 Hudspeth County UWCD #1 Hudspeth County WCID #1 Hughes Springs Hughes Springs Housing Authority Hull FWSD Hull-Daisetta ESD #2 Humble Hungerford MUD Hunt CAD Hunters Creek Village Huntington

Huntington Housing Authority Huntsville Huntsville Housing Authority Hurst Hutchins Hutchinson CAD Hutto Huxley Idalou Idlewood WCID #1 Impact Indian Lake Industry Ingleside Ingleside Housing Authority Ingleside on the Bay Ingram International Management District Inverness Forest Improvement District Iola Iowa Colony Village of Iowa Park Iraan Iraan General Hospital District Iredell Irion CAD Irion County Water Conservation District Irving Irving Flood Control Dist Section I Irving Flood Control Dist Section III Isaacson MUD Italy Itasca Ivanhoe City of Jacinto City Jack CAD Jackrabbit Road PUD Jacksboro Jackson CAD Jackson County ESD #1 Jackson County ESD #3 Jackson County Hospital District Jackson County WCID #2 Jacksonville Jacksonville Housing Authority Jamaica Beach Jarrell Jasper Jasper CAD Jasper Housing Authority Jayton Jefferson Jefferson CAD Jefferson County Drainage District #6 Jefferson Housing Authority Jersey Village Jewett Jim Hogg County Housing Authority Jim Hogg County WCID #2 Jim Wells County FWSD #1 Johnson City Johnson City Housing Authority Johnson County Central Appraisal Dist

Johnson County ESD #1 Johnson County SUD Johnson County SWCD #541 Jonah Water SUD Jones CAD Jones Creek Village of Jonestown Josephine Joshua Jourdanton Jourdanton Housing Authority Junction Junction Housing Authority Justin Karnes CAD Karnes City Karnes County SWCD #343 Katy Kaufman Kaufman CAD Kaufman-Van Zandt Rockwall County SWCD Keene Keller Kelly Lane WCID #1 Kelly Lane WCID #2 Kemah Kemp Kemp Housing Authority Kempner Kendall Appraisal District Kendall County WCID #1 Kendall Lakes TIRZ Redevelopment Auth Kendall SWCD #216 Kendleton Kenedy Kenedy Housing Authority Kenefick Kennard Kennedale Kerens Kerens Housing Authority Kermit Kerr Central Appraisal District Kerr County SWCD #217 Kerr Emergency 911 Network Kerrville Kerrville Public Utility Board Kilgore Killeen Killeen Housing Authority Kimble Central Appraisal District Kingsbury Kingsland MUD Kingsville Kingsville Housing Authority Kinney CAD Kinney County GCD Kirby Kirbyville Kirbyville Housing Authority Kleberg CAD Klein PUD

Kleinwood Joint Powers Board Kleinwood MUD Knollwood Knox City Knox City Housing Authority Kosse Kountze Kress Krugerville Krum Kurten Kyle Kyle Housing Authority La Coste La Feria La Feria Irrigation District #3 La Grange La Grange Housing Authority La Grulla La Joya La Joya Housing Authority La Marque La Porte La Salle CAD La Salle WCID #1A La Vernia La Villa La Ward Lacy-Lakeview Ladonia Lago Vista Laguna Madre Water District Laguna Vista Lake Amanda WCID #1 Lake Bridgeport Lake Cities MUA Lake City Lake Dallas Lake Forest Plant Advisory Council Lake Forest UD Lake Houston Redevelopment Authority Lake Houston TIRZ 10 Lake Jackson Lake LBJ WCID #1 Lake MUD Lake Pointe MUD Lake Proctor Irrigation Authority Lake Tanglewood Lake Travis Community Library District Lake Worth Lakeport Lakeside (San Patricio Co) Lakeside (Tarrant Co) Lakeside City Lakeside MUD #3 Lakeside Water Supply District Lakeside WCID #1 Lakeside WCID #2A Lakeside WCID #2B Lakeside WCID #2C Lakeside WCID #2D Lakeview Lakeview Police Department Lakeway

Lakeway MUD Lakewood Village Lamar CAD Lamar SWCD Lamb CAD Lamesa Lampasas Lampasas CAD Lampasas County WCID #1 Lancaster Laredo Laredo Housing Authority Laredo Transit Latexo Lavaca County Central Appraisal District Lavaca-Navidad River Authority Lavon Lazy Nine MUD #1A Lazy Nine MUD #1B Lazy Nine MUD #1C Lazy Nine MUD #1D Lazy Nine MUD #1E Lazy River Improvement District League City Leakey Leander Leander MUD #1 Leander MUD #2 Leander MUD #3 Leary Lee CAD Lee-Fayette Counties Cummins Creek WCID Lefors Leland Woods Redevelopment Authority Leland Woods Redevelopment Authority #2 Leon CAD Leon Valley Leona Leonard Leroy Levelland Levelland Housing Authority Lewisville Lexington Liberty Liberty County Central Appraisal Dist Liberty County DD #2 Liberty County DD #4 Liberty County WCID #5 Liberty Hill Liberty Hill Public Library District Limestone CAD Limestone County Senior Services Project Limestone-Falls SWCD Lindale Linden Linden Housing Authority Lindsay Lipan Lipan-Kickapoo WCD

Lipscomb Co Central Appraisal District Little Elm Town of Little River Academy Little River-San Gabriel SWCD #508 Littlefield Live Oak Live Oak UWCD Liverpool Livingston Livingston Housing Authority Llano Llano Central Appraisal District Llano County ESD #1 Llano County MUD #1 Llano County SWCD #233 Llano Estacado UWCD Llano Housing Authority Lockhart Lockhart Housing Authority Lockney Lockney Housing Authority Log Cabin Logan Slough WID Lometa Lometa Housing Authority Lone Oak Lone Star Lone Star Regional Water Authority Lone Wolf GCD Longview Loraine Loraine Housing Authority Lorena Lorenzo Los Fresnos Los Fresnos Housing Authority Los Indios Lost Creek Limited District Lost Pines GCD Lott Lott Housing Authority Louetta North PUD Louetta Road UD Lovelady Lower Brushy Creek WCID Lower Clear Fork/Brazos SWCD #551 Lower Kirby Pearland Mgmt District Lower Rio Grande Valley Dev Council Lower Trinity GCD Lower Valley Water District Lowry Crossing Lubbock Central Appraisal District Lubbock County WCID #1 Lubbock Emergency Communication District Lubbock Housing Authority Lubbock-Citibus Lubbock/Reese Redevelopment Authority Lucas Luce Bayou PUD Lueders Luella SUD Lufkin

Luling Luling Housing Authority Lumberton Lumberton MUD Lyford Lynn CAD Lytle Lytle Lake WCID Mabank Mabank Housing Authority MacBee SUD Macedonia Eylau MUD Mackenzie Municipal Water Authority Madison CAD Madisonville Madisonville Housing Authority Magnolia Magnolia East MUD Malakoff Malakoff Housing Authority Malcomson Road UD Malone Manor Mansfield Manvel Marble Falls Marble Falls Housing Authority Marfa Marfa Housing Authority Marietta Marion Marion Cass SWCD Marion Central Appraisal District Marion County Hospital District Marlin Marlin Housing Authority Marquez Marshall Marshall Harrison County Health District Marshall Housing Authority Mart Mart Housing Authority Martin County Fresh Water District Martindale Mason Mason Housing Authority Mason SWCD #223 Matador Matador Housing Authority Matador Water District Matagorda CAD Matagorda County WCID #6 Mathis Mathis Housing Authority Maud Maud Housing Authority Mauriceville MUD Maverick CAD Maverick County SWCD #253 Maverick County WCID #1 Maypearl McAllen McAllen Housing Authority

McCamey McCulloch CAD McCulloch SWCD #249 McGregor McGregor Housing Authority McKinney McKinney Housing Authority McLean McLean Housing Authority McLendon-Chisholm McLennan CAD McLennan County Rural Transit District McLennan County WCID #2 McMullen County WCID #1 McMullen County WCID #2 McMullen GCD Meadow Meadowlakes Meadows Place Medina CAD Medina County 911 Medina County WCID #2 Medina Valley SWCD Megargel Melissa Melvin Memorial City Redevelopment Authority Memorial Heights Redevelop Auth TIRZ #5 Memorial Point UD Memorial Villages Police Department Memorial Villages Water Authority Memphis Memphis Housing Authority Menard Menard County SWCD #215 Mercedes Mercedes Housing Authority Meridian Meridian Housing Authority Merkel Merkel Housing Authority Mertens Mertzon Mesa UWCD Mesquite Mesquite Groundwater Conservation Dist Metropolitan Area EMS Authority Mexia Mexia Housing Authority Meyer Ranch MUD of Comal County Miami Middle Concho SWCD Middle Rio Grande COG Middle Trinity GCD Midland Midland Central Appraisal District Midland County Housing Authority Midland County Utility District Midland Emergency Commission District Midland Housing Authority Midland SWCD

Midland-Odessa Urban Transit District Midlothian Midlothian/Waxahachie Airport Midway Milam Appraisal District Milano Mildred Miles Milford Mills CAD Millsap Mineola Mineola Housing Authority Mineral Wells Mineral Wells Housing Authority Mingus Mission Mission Housing Authority Missouri City Mitchell County Appraisal District Mitchell County SWCD Mobeetie Mobile City Monahans Monahans Housing Authority Mont Belvieu Montague County Tax Appraisal District Montgomery Montgomery County ECD Montgomery County ESD #14 Montgomery County ESD #2 Montgomery County Housing Authority Montgomery County MUD #126 Montgomery County MUD #88 Montgomery County MUD #89 Montgomery County MUD #90 Montgomery County WCID #1 Montrose Management District Moody Moody Housing Authority Moore CAD Moore's Crossing MUD Moran Morgan Morgan's Point Morgan's Point Resort Morris CAD Morton Motley CAD Motley County Hospital District Moulton Mount Calm Mount Enterprise Mount Pleasant Mount Pleasant Housing Authority Mount Vernon Mount Vernon Housing Authority Mountain City Mountain Peak SUD Muenster Muleshoe Muleshoe Housing Authority Munday Munday Housing Authority

Murchison Murphy Mustang Ridge Nacogdoches Nacogdoches County ESD #4 Nacogdoches Housing Authority Nacogdoches SWCD Naples Naples Housing Authority NASA Area Management District Nash Nassau Bay Nassau Bay Redevelopment Authority Natalia Navarro Central Appraisal District Navarro County ESD #1 Navarro SWCD Navasota Navasota Housing Authority Nazareth Near Northwest Management District Neches/Trinity Valley GCD Nederland Needville Nevada New Berlin New Boston New Boston Property Management New Braunfels New Braunfels Housing Authority New Braunfels Utilities New Deal New Fairview New Home New Hope New Hope SUD New London New Summerfield New Waverly Newark Newcastle Newcastle Housing Authority Newport MUD Newton Newton Central Appraisal District Newton County ESD #5 Newton Housing Authority Niederwald Nixon Nixon Housing Authority Nocona Nocona Housing Authority Nolan CAD Nolan County Fresh Water District Nolanville Nome Noonday Nordheim Normangee Nortex Regional Planning Commission North Austin MUD #1 North Central Texas COG North Central Texas MWA North Channel Water Authority

North Concho River SWCD North Green MUD North Houston District North Montague County WSD North Richland Hills North San Gabriel MUD #2 North Texas ECC North Texas Tollway Authority North Zulch MUD Northampton MUD Northeast Gaines County ESD #1 Northeast Harris County MUD #1 Northeast Police Department Northeast Texas MWD Northeast Texas Public Health District Northeast Travis County UD Northeast TX Regional Mobility Authority Northlake Northtown MUD Northwest Grayson County WCID #1 Northwest Harris County MUD #16 Northwest Harris County MUD #19 Northwest Harris County MUD #20 Northwest Harris County MUD #22 Northwest Harris County MUD #29 Northwest Harris County MUD #36 Northwest Leon County ESD #3 Northwood MUD #1 Novice Nueces CAD Nueces County DD #2 Nueces County ESD #1 Nueces County ESD #4 Nueces County ESD #6 Nueces County WCID #3 Nueces County WCID #4 Nueces County WCID #5 Nueces/Jim Wells Counties ESD #5 O'Brien O'Donnell O'Donnell Housing Authority Oak Grove Oak Leaf Oak Point Oak Ridge (Cooke Co) Oak Ridge (Kaufman Co) Oak Ridge North Oakwood Ochiltree SWCD #142 Odem Odem Housing Authority Odessa Odessa Housing Authority Office of Urban Redevelopment-OUR SA Oglesby Oglesby Housing Authority Old River-Winfree Old Sixth Ward Redevelopment Authority Oldham CAD Olmos Park Olney Olney Housing Authority

Olton Olton Housing Authority Omaha Omaha Housing Authority Onalaska Opdyke West Orange Orange CAD Orange Co ESD #2/Bridge City VFD Orange County ESD #1 Orange County ESD #3 Orange County ESD #4 Orange County Navigation/Port District Orange County WCID #1 Orange County WCID #2 Orange Grove Orange Housing Authority Orchard Ore City OST/Almeda Corridors Redevelopment Auth Overton Overton Housing Authority Ovilla Oyster Creek Paducah Paducah Housing Authority Paint Rock Palacios Palacios Housing Authority Palestine Palisades Village Palm Valley Palmer Palmera Ridge MUD of Williamson County Palmhurst Palmview Palo Duro River Authority Palo Pinto Appraisal District Palo Pinto County MWD #1 Palo Pinto SWCD #518 Paloma Lake MUD #1 Paloma Lake MUD #2 Pampa Panhandle Panhandle Regional Planning Commission Panola CAD Panola County ESD #1 Panola County FWD #1 Panola SWCD #448 Panorama Village Pantego Paradise Paris Paris Housing Authority Paris-Lamar Co Pub Health Department Park Board of Trustees of Galveston Parker Parker CAD Parker County SWCD #558 Parklands MUD #1 Parkside at Mayfield Ranch MUD

Parmer CAD Pasadena Paseo del Este MUD #1 Paseo del Este MUD #10 Paseo del Este MUD #11 Paseo del Este MUD #2 Paseo del Este MUD #3 Paseo del Este MUD #4 Paseo del Este MUD #5 Paseo del Este MUD #6 Paseo del Este MUD #7 Paseo del Este MUD #8 Paseo del Este MUD #9 Pattison Patton Village Payne Springs Pearland Pearsall Pearsall Housing Authority Peaster Pecan Bayou SWCD #553 Pecan Gap Pecan Hill Pecan Valley GCD Pecos Pecos CAD Pecos County WCID #1 Pecos County WID #2 Pecos County WID #3 Pecos Housing Authority Pedernales SWCD #218 Pelican Bay Penelope Penitas Permian Basin Regional Planning Comm Permian Basin UWCD Perryton Petersburg Housing Authority Petrolia Petronila Pettus MUD Pflugerville Pharr Pharr Housing Authority Phelps SUD Pilot Knob MUD #1 Pilot Knob MUD #2 Pilot Knob MUD #3 Pilot Knob MUD #4 Pilot Knob MUD #5 Pilot Point Pine Creek WID Pine Forest Pine Island Pinehurst Pineland Housing Authority Piney Point Village Pittsburg Pittsburg Housing Authority Plains Plainview Plainview Housing Authority Plainview/Hale County Airport Plano Housing Authority

Plateau UWCSD Pleak Pleasant Valley Pleasanton Pleasanton Housing Authority Point Point Aquarius MUD Point Blank Point Comfort Point Housing Authority Point Venture Political Subdivision WC Alliance Polk Central Appraisal District Ponder Ponderosa Forest Utility District Ponderosa Joint Powers Agency Port Aransas Port Arthur Port Arthur Housing Authority Port Authority of San Antonio Port Isabel Port Isabel Housing Authority Port Isabel/San Benito Navigation Dist Port Lavaca Port Lavaca Housing Authority Port Neches Port O'Connor Improvement District Port of Corpus Christi Authority Port of Harlingen Authority Port of Liberty Commission Porter SUD Portland Post Post Housing Authority Post Oak Bend Post Oak Savannah GCD Post Oak SUD Poteet Poteet Housing Authority Poth Potter-Randall Appraisal District Potter-Randall County ECD Pottsboro Poynor Prairie View Premont Presidential Glen MUD Presidio CAD Primera Princeton Progreso Progreso Lakes Prosper Town of Providence Village Town of Public Employee Benefit Alliance Public Transit Services Putnam Pyote Quail Creek MUD Quail Valley UD Quanah Quanah Housing Authority Queen City Quinlan

Quintana Quitaque Quitman Rains CAD Ralls Ralls Housing Authority Ranch at Clear Fork Creek MUD #1 Ranch at Clear Fork Creek MUD #2 Ranch at Cypress Creek MUD #1 Rancho Viejo Ranger Ranger Housing Authority Rankin Rankin Housing Authority Ransom Canyon Rayburn Country MUD Raymondville Reagan CAD Reagan Hospital District Real CAD Real Edwards Cons/Recl District Red Bluff Water Power Control District Red Lick Red Oak Red River Authority of Texas Red River CAD Red River County WCID #1 Red River SWCD Red Sands GCD Redwater Reeves CAD Reeves County GCD Reeves County WID #1 Reeves County WID #2 Refugio Refugio County WCID #1 Refugio GCD Regional Transportation Authority Reklaw Reno Reno (Parker County) Retreat Rhome Rice Richland Richland Hills Richland Springs Richland SUD Richmond Richwood Riesel Rio Bravo Rio Grande City Rio Grande COG Rio Grande Regional Water Authority Rio Hondo Rio Vista Rising Star Rising Star Housing Authority River Oaks River Place Limited District River Plantation MUD Riverside Riverside SUD

Riviera WCID Roanoke Roaring Springs Robert Lee Robert Lee Housing Authority Robertson CAD Robinson Robstown Robstown Housing Authority Robstown Utility Systems Roby Roby Housing Authority Rochester Rockdale Rockdale Housing Authority Rockett SUD Rockport Rocksprings Rockwall Rockwall Housing Authority Rocky Mound Rogers Rogers Housing Authority Rolling Creek UD Rolling Plains GCD Rolling Plains Memorial Hospital Dist Rollingwood Roma Roma Housing Authority Roman Forest Roman Forest PUD #3 Ropesville Roscoe Rose City Rose Hill Acres Rose Hill SUD Rosebud Rosebud Housing Authority Rosenberg Rosenberg Housing Authority Ross Rosser Rotan Rotan Housing Authority Round Mountain Round Rock Round Rock Housing Authority Round Top Town of Rowlett Roxton Royalwood MUD Royse City Royse City Housing Authority Rule Runaway Bay Runge Runge Housing Authority Runnels CAD Runnels County ESD #1 Runnels SWCD #232 Rural Economic Asst League Inc Rural Taylor County Aging Service Rusk Rusk County GCD

Rusk County Rural Rail District Rusk Housing Authority Rusk SWCD #447 Sabinal Sabine/Neches Navigation District Sachse Sadler Sagemeadow Utility District Saginaw Saint George Pl Redev Auth Reinvest Z#1 Saint Hedwig Saint Jo Saint Paul Salado Salado Public Library District Salt Fork SWCD #133 Sam Rayburn Mun Power Agency San Angelo San Angelo Housing Authority San Antonio San Antonio MUD #1 San Augustine San Augustine CAD San Augustine Housing Authority San Benito San Benito Housing Authority San Diego San Diego MUD #1 San Elizario San Felipe San Jacinto CAD San Jacinto County ESD San Jacinto SUD San Juan San Juan Housing Authority San Leanna San Leon MUD San Marcos San Marcos Housing Authority San Patricio San Patricio CAD San Patricio County GWCD San Patricio County Navigation Dist #1 San Patricio MWD San Perlita San Saba San Saba CAD San Saba Housing Authority San Saba SWCD #250 Sanctuary Sandhills SWCD #241 Sandy Oaks Sandy Point Sanford Sanger Sansom Park Santa Anna Santa Anna Housing Authority Santa Clara Santa Fe Santa Rita UWCD Santa Rosa Saratoga UWCD

Savoy Schertz Schertz Housing Authority Schleicher County Hospital District Schulenburg Schulenburg Housing Authority Scotland Scurry Scurry CAD Seabrook Seadrift Seagoville Seagraves Seagraves Housing Authority Sealy Sealy VFD/Austin County ESD #2 Sebastian MUD Seguin Seguin Housing Authority Seis Lagos UD Selma Seminole Senna Hills MUD Seven Oaks Seven Points Seymour Seymour Housing Authority Shackelford CAD Shady Grove SUD Shady Hollow MUD Shady Shores Shallowater Shamrock Shavano Park Shelby CAD Shelby County FWSD #1 Shelby County SWCD Sheldon Road MUD Shenandoah Shepherd Sherman Sherman CAD Sherman Housing Authority Shiner Shoreacres Siena MUD #1 Siena MUD #2 Siesta Shores WCID Silsbee Silverton Simonton Sinton Sinton Housing Authority Skellytown Slaton Slaton Housing Authority Smiley Smiley Housing Authority Smith CAD Smith County 911 Commisson District Smith County ESD #1 Smithville Smithville Housing Authority Smyer

Snook Snyder Socorro Somerset Somervell Central Appraisal District Somervell County Hospital District Somervell County Water District Somerville Sonora Sonterra MUD Sour Lake South Central Calhoun County WCID South East Texas RPC South Houston South Padre Island South Plains Association of Governments South Plains Public Health District South Plains Regional Housing Authority South Plains UWCD South Post Oak Redev Auth/TIRZ #9 South Rains SUD South Texas Development Council South Texas Water Authority South Texas Weather Modification Assoc Southeast Leon County ESD #1 Southeast Texas Groundwater Cons Dist Southeast Travis County MUD #1 Southeast Travis County MUD #2 Southeast Travis County MUD #3 Southeast Travis County MUD #4 Southeast Williamson County MUD #1 Southern Montgomery County MUD Southern Trinity GCD Southlake Southmayd Southmost Regional Water Authority Southside Place Southwest Area Regional Transit District Southwest Fannin SUD Southwest Houston Redevelopment Auth Southwest Management District Southwest Travis County GCD SPAN Transit Spearman Spearman Housing Authority Spencer Road PUD Splendora Spring Branch Spring Branch Mgmt District Spring Valley Springhollow MUD Springlake Springtown Spur Spur Housing Authority Spurger ESD #2 St George Place Management District ST PST Water Supply Stadium Park Redevelopment Authority Stafford

Stagecoach Stamford Stamford Hospital District Stamford Housing Authority Stanton Stanton Housing Authority Staples Star Harbor STAR Transit Starr CAD Starr County Housing Authority Stephens CAD Stephenville Sterling City Sterling County Appraisal District Sterling County UWCD Stinnett Stockdale Stockdale Housing Authority Stockton Bend Stonewall County Ambulance Service Stonewall Memorial Hospital District Stonewall Ranch MUD Stonewall SWCD #167 Stratford Strawn Strawn Housing Authority Streetman Sudan Sugar Land Sullivan City Sulphur Springs Sulphur-Cypress SWCD Sun Metro Sunbelt FWSD Sundown Sunnyvale Sunray Sunrise Beach Village Sunset Valley Surfside Beach Sutton CAD Sutton County UWCD Sweeny Sweetwater Sweetwater Housing Authority Swisher CAD Taft Taft Housing Authority Tahoka Tahoka Housing Authority Talco Talco Housing Authority Talty City of Talty SUD Tanglewood Forest Limited District Tara Glen MUD Tarkington SUD Tarrant County 911 District Tarrant County ESD #1 Tarrant County Hospital Dist-JPS Health Tatum Tatum Housing Authority Tax Increment Reinvestment Zone #11

Taylor Taylor CAD Taylor Housing Authority Taylor Lake Village Teague Teague Housing Authority Tehuacana Temple Temple Housing Authority Tenaha Tenaha Housing Authority Terranova West MUD Terrell Terrell Hills Terry CAD Terry Memorial Hospital District Texana Groundwater Conservation District Texana MHMR Center Texarkana Texarkana Housing Authority Texarkana Urban Transit District Texarkana Water Utilities Texarkana-Bowie County Fam Health Clinic Texas Association of Regional Councils Texas City Texas City Housing Authority Texas City TIRZ #1/Lago Mar Dev Auth Texas Housing Foundation Texas Municipal Power Agency Texas Municipal Retirement System Texas Panhandle Centers Texhoma Texline Texoma Area Solid Waste Authority Texoma COG Texoma Housing Partners The Colony The Colony MUD #1A The Colony MUD #1B The Colony MUD #1C The Colony MUD #1D The Colony MUD #1E The Colony MUD #1F The Colony MUD #1G The Woodlands Township Thompsons Thorndale Thorndale Housing Authority Thornton Thorntonville Thrall Three Rivers Three Rivers Housing Authority Throckmorton Throckmorton Central Appraisal District Throckmorton Housing Authority Throckmorton SWCD #543 Tiki Island Timbercreek Canyon Village of Timpson Timpson Housing Authority Timpson Public Library Dist

Tioga Titus CAD TML TML MultiState IEBP TMLIRP TMLIRP & TMLIEBP Toco Todd Mission Tolar Tom Bean Tom Green CAD Tom Green County FWD #3 a MUD Tom Green SWCD Tomball Tool Toyah Toyah-Limpia SWCD Travis Central Appraisal District Travis County ESD #1 Travis County ESD #14 Travis County ESD #2 Travis County ESD #8 Travis County Fire/Rescue ESD #11 Travis County Housing Authority Travis County MUD #11 Travis County MUD #12 Travis County MUD #13 Travis County MUD #14 Travis County MUD #17 Travis County MUD #2 Travis County MUD #23 Travis County MUD #24 Travis County MUD #3 Travis County MUD #4 Travis County MUD #5 Travis County MUD #6 Travis County MUD #7 Travis County MUD #8 Travis County MUD #9 Travis County WCID #10 Travis County WCID #17 Travis County WCID #18 Travis County WCID #19 Travis County WCID #20 Travis County WCID-Point Venture Travis-Creedmoor MUD Treasure Island MUD Trent Trenton Tres Lagos Public Improvement District TRI SUD Trinidad Trinidad Housing Authority Trinity Trinity Glen Rose GCD Trinity River Authority Trophy Club Trophy Club MUD #1 Troup Troy Tulia Tulia Housing Authority Turkey Tuscola

Two Way SUD Tye Tyler CAD Tyler County ESD #1 Tyler County ESD #3 Tyler County ESD #4 Tyler County ESD #5 Tyler County ESD #7 Tyler County SUD Uhland Uncertain Union Grove Union Valley Universal City University Park Upper Brushy Creek WCID Upper Clear Fork SWCD Upper Guadalupe River Authority Upper Kirby Redev Auth TIRZ #19 Houston Upper Leon River MWD Upper Leon SWCD #525 Upper Llanos SWCD Upper Nueces Frio SWCD #238 Upper Pecos SWCD Upper Sabine SWCD Upper Trinity Regional Water District Upshur CAD Upshur County ESD #1 Upshur-Gregg County SWCD Upton CAD Upton County ESD #1 Upton County ESD #2 Upton County Water District #1 Urban Renewal Agency of City of Austin Uvalde Uvalde CAD Uvalde County UWCD Uvalde Housing Authority Val Verde CAD Valentine Valley International Airport Valley Mills Valley MUD #2 Valley View Van Van Alstyne Van Horn Van Horn Housing Authority Van Housing Authority Van Zandt CAD Van Zandt County ESD #2 Van Zandt County ESD #4 Varner Creek UD Vega Velasco Drainage District Venus Vernon Vernon Housing Authority Via Metropolitan Transit Victoria Victoria Central Appraisal District Victoria County GCD Victoria County WCID #2

Victoria Housing Authority Victoria SWCD #346 Vidor Village of The Hills Vinton Vista MUD Vista Oaks MUD Volente Von Ormy Waco Waco Housing Authority Waelder Waelder Housing Authority Wake Village Walker CAD Walker County ESD #1 Walker County ESD #2 Walker County Housing Authority Walker County SUD Waller Waller County RID #1 Waller Creek Local Gov't Corp Wallis Walnut Creek SUD Walnut Springs Walsh Ranch MUD Ward CAD Ward County WID #2 Warren City Washington CAD Waskom Watauga Waterwood MUD #1 Waxahachie Waxahachie Housing Authority Weatherford Weatherford Housing Authority Webb CAD Webberville Webster Weimar Weinert Weir Wellington Wellington Housing Authority Wellman Wells Wells Branch Community Library Wes-Tex GCD Weslaco Weslaco Housing Authority West West Brazoria County DD #11 West Cedar Creek MUD West Central Texas COG West Columbia West Cypress Hills WCID #1 West Gregg SUD West Harris County MUD #10 West Harris County MUD #11 West Harris County MUD #16 West Keegans Bayou Improvement District West Lake Hills

West Nueces-Las Moras SWCD West Orange West Tawakoni West Texas Reg Transportation Auth Inc West Texas Weather Modification Assoc West Travis County MUD #6 West Travis County MUD #8 West Travis County Public Utility Agency West University Place West Williamson County MUD #1 West Wise SUD Westador MUD Westbank Comm Library District Westbrook Westchase District Westchase District Comm Fund Westlake Westlake MUD #1 Westminster SUD Weston Weston Lakes Weston MUD Westover Hills Westwood Shores MUD Westworth Village Wharton Wharton County ESD #3 Wheeler Wheeler CAD White Deer White Oak White Oak Bayou Joint Powers White River Municipal Water District White Rock SUD White Settlement Whiteface Whitehouse Whitesboro Whitesboro Housing Authority Whitewright Whitney Whitney Housing Authority Wichita Appraisal District Wichita Falls Wichita Falls Housing Authority Wichita-Wilbarger 911 Dist Wickett Wickson Creek SUD Wilbarger Creek MUD #1 Wilbarger Creek MUD #2 Willacy CAD Willacy Co Nav Dist/Port Mans PUD Willacy County Drainage District #1 Willacy County Housing Authority Williamson CAD Williamson County ESD #1 Williamson County ESD #4 Williamson County ESD #5 Williamson County MUD #10 Williamson County MUD #11 Williamson County MUD #12 Williamson County MUD #15 Williamson County MUD #16

Williamson County MUD #17 Williamson County MUD #19 Williamson County MUD #19A Williamson County MUD #19B Williamson County MUD #19C Williamson County MUD #21 Williamson County MUD #22 Williamson County MUD #30 Williamson County MUD #31 Williamson County MUD #32 Williamson County MUD #34 Williamson County WCID #2 Williamson County WSIDD #3 Williamson County/Cities Health Dist Williamson/Travis County MUD #1 Willis Willow Creek WCD Willow Park Wills Point Wills Point Housing Authority Wilmer Wilson Wilson CAD Wimberley Wimberley Village Library District Windcrest Windom Windthorst Winfield Wink Wink Housing Authority Winkler CAD Winnsboro Winnsboro Housing Authority Winona Wintergarden GCD Winters Winters Housing Authority Wise CAD Wise County WCID #1 Wise SWCD #548 Wixon Valley Wolfe City Wolfe City Housing Authority Wolfforth Wood CAD Wood County SWCD Wood Trace MUD #1 Woodbranch Village Woodcreek Woodcreek Reserve MUD Woodloch Woodridge MUD Woodsboro Woodville Woodville Housing Authority Woodway Workforce Solutions for H O T Wortham Wortham Housing Authority Wylie Wylie Northeast SUD Yantis Yoakum

Member Member Member

Yoakum CAD Yoakum Housing Authority York Creek Improvement District Yorktown

Yorktown Housing Authority Young County SWCD Zapata CAD Zapata County WCID

Zavala CAD Zavala County WCID #1 Zavalla

Key AMD............... Area Management District CAD ................ County Appraisal District CCPD ............. Crime Control & Prevention District COG ................ Council of Governments DD .................. Drainage District ECD ................ Emergency Communication District EMS ................ Emergency Medical Services ESD................. Emergency Services District FWD .............. Fresh Water District FWSD ............ Fresh Water Supply District GCD ................ Groundwater Conservation District GWD .............. Groundwater District ID .................... Improvement District LID ................. Levee Improvement District MD .................. Management District MHMR .......... Mental Health/Mental Retardation MPEC............. Multi-Purpose Events Center MUD .............. Municipal Utility District MWA ............. Municipal Water Authority MWD ............. Municipal Water District MWSD........... Municipal Water Supply District

PUD .................. Public Utility District RA ..................... Redevelopment Authority RFPD ............... Rural Fire Prevention District RMA ................. Regional Mobility Authority RPC .................. Regional Planning Commission RSA ................... Regional Sewage Authority SUD .................. Special Utility District SWCD .............. Soil & Waste Conservation District SWMA ............. Solid Waste Management Agency TIRZ ................. Tax Increment Reinvestment Zone UWCD ............. Underground Water Conservation District UWCSD ........... Underground Water Conservation & Supply District VFD .................. Volunteer Fire Department WA .................... Water Authority WCD................. Water Conservation District WCID ............... Water Control & Improvement District WID .................. Watershed Improvement District WORD ............. Water Oriented Recreation District WSD ................. Water Supply District WSIDD ............ Water, Sewer, Irrigation & Drainage District

Documents

1………………………………….WHO WE SERVE ………………….….FINANCIAL … · Texas Department of Workers’ Compensation. This designation means that the Pool