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CITY OF PARIS, TEXAS
<br />Notes to Financial Statements (Continued)
<br />September 30, 2022
<br />IV. Detailed Notes on All Activities and Funds (Continued)
<br />P. Contingent Liabilities (Continued)
<br />the legally required closure costs for the waste water utility system was estimated as of September 30, 2022 to
<br />be $2,901,000. The estimated remaining wastewater utility system life is 30 years. The actual cost of closure
<br />and post closure may be higher due to inflation, changes in technology, or changes in waste water utility system
<br />laws and regulations. At September 30, 2022, there were no assets restricted to pay this liability.
<br />Q. Tax Abatements
<br />As of September 30, 2022, the City provides tax abatements through two programs -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
<br />involved must be newly created or improvements to an existing facility. Abatements may be extended to
<br />the value of buildings, structures, fixed machinery and equipment, site improvements, tangible personal
<br />property, and office space and improvements necessary to the operation and administration of the facility.
<br />Inventory and supplies are not eligible for abatement. The City Council grants abatements on a case by
<br />case basis. The abatement is stated as a percentage of the eligible property under consideration and for a
<br />specified period of time up to ten years. The City has a written industrial tax abatement policy. Provisions
<br />for recapturing abated taxes, if any, are 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
<br />previous appraised value of the property. The abatements are stated as a percentage of the increased value
<br />using the following schedule: Year 1-100%, Year 2-100%, Year 3-80%, Year 4-60%, and Year 5-40%.
<br />The City has a standard written residential tax abatement agreement. Provisions for recapturing abated
<br />taxes, if any, are included in this policy.
<br />Tax Abatement Program Amount of Taxes Abated 2021-22
<br />Industrial Incentives $ 1,289,467
<br />R. Prior Period Adjustment
<br />During fiscal year 2022, the City determined that an adjustment was necessary to the adjust revenue and
<br />expenses that should have been recorded in the prior fiscal year. The prior period adjustment totaled $287,870
<br />for governmental funds. The restated beginning fund balance for governmental funds is $40,955,522. The
<br />restated net position for governmental activities is $28,509,379.
<br />S. Subsequent Events
<br />Subsequent events have been evaluated through October 16, 2023, the date the financial statements were
<br />available to be issued.
<br />In October 2022, the City approved a construction contract in the amount of $88,490, for the southern boat
<br />ramp construction project at Lake Crook. In addition, the City approved a construction contract in the amount of
<br />$62,852,642, for the Phase I of the Wastewater Treatment Plant Project.
<br />In November 2022, the City issued $26,795,000 Waterworks and Sewer System Revenue Bonds, Series 2022
<br />for the purpose of acquiring, constructing, installing and equipping additions, improvements and extensions to
<br />the City's waterworks and sewer system. The interest rate is payable semi-annually at rates ranging from 4.00%
<br />to 5.25%, with the final payment due on June 15, 2051.
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