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CITY OF PARIS, TEXAS
<br />Notes to Financial Statements (Continued)
<br />September 30, 2020
<br />IV. Detailed Notes on All Activities and Funds (Continued)
<br />O. Contingent Liabilities (Continued)
<br />The City has incurred certain asset retirement obligations related to the operation of its wastewater utility
<br />system. The estimated liability of the legally required closure costs for the wastewater utility system cannot be
<br />reasonable estimated as of September 30, 2020, since the specific legally required costs of retirement have not
<br />yet been identified. The City anticipates identifying those specific legally required costs and obtaining an
<br />estimate of those costs in a subsequent fiscal year.
<br />P. Tax Abatements
<br />As of September 30, 2020, the City provides tax abatements through two progams-Industrial and Residential:
<br />1. Industrial abatements are possible for manufacturing, research, regional distribution, regional services,
<br />regional tourist entertainment, basic industry, and any primary jobs creating industry. The property involved
<br />must be newly created or improvements to an existing facility. Abatements may be extended to the value of
<br />buildings, structures, fixed machinery and equipment, site improvements, tangible personal property, and office
<br />space and improvements necessary to the operation and administration of the facility. Inventory and supplies
<br />are not eligible for abatement. The City Council grants abatements on a case by case basis. The abatement is
<br />stated as a percentage of the eligible property under consideration and for a specified period of time up to ten
<br />years. The City has a written industrial tax abatement policy. Provisions for recapturing abated taxes, if any, are
<br />included in this policy.
<br />2. Residential abatements are granted for five year periods. The property involved must be new
<br />residential structures or improvements to existing structures that will be at least a 20% increase in the previous
<br />appraised value of the property. The abatements are stated as a percentage of the increased value using the
<br />following schedule: Year 1-100%, Year 2-100%, Year 3-80%, Year 4-60%, and Year 5-40%. The City has a
<br />standard written residential tax abatement agreement. Provisions for recapturing abated taxes, if any, are
<br />included in this policy.
<br />Tax Abatement Program
<br />Industrial Incentives
<br />Residential Incentives
<br />Q. Prior Period Adjustment
<br />Amount of Taxes Abated 2019-20
<br />$ 1,195,642
<br />437
<br />During fiscal year 2020, the City determined that an adjustment of $210,096 was necessary to the beginning
<br />balance of the Firefighters' Relief and Retirement Fund pension liability. During fiscal year 2020, the City also
<br />determined that adjustments were necessary to reclassify funds held in General Fund to Special Revenue funds.
<br />The prior period adjustment for this purpose totaled $415,120. Cash, grant receivable, various payable and
<br />deferred revenue accounts were also adjusted for a total of $356,837 and $41,498 for governmental and
<br />business -type activities, respectively. The prior period adjustment totaled $982,053 for governmental activities
<br />and $41,498 for business type activities. The restated beginning net position for governmental activities and
<br />business type activities is $32,659,915 and $42,211,693, respectively.
<br />R. Subsequent Event
<br />In November 2020, the City issued $1,765,000 General Obligation Refunding Bonds, Series 2020. The interest
<br />rate is 1.24% paid semi-annually with the final maturity date due on September 30, 2030.
<br />In May 2021, the City issued $43,855,000 Combination Tax and Surplus Revenue Certificates of Obligation,
<br />Series 2021, to fund purchases of equipment and vehicles. The interest rate is payable semi-annually at rates
<br />ranging from 2.0% to 5.0%, with the final maturity date due on September 30, 2051.
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