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CITY OF PARIS, TEXAS
<br />Notes to Financial Statements (Continued)
<br />September 30, 2023
<br />IV. Detailed Notes on All Activities and Funds (Continued)
<br />P. Related Party
<br />The City Council appoints the governing board of an entity which is legally separate from the City. The City is
<br />not able to impose its will on this entity, and a financial benefit/burden relationship is not present; therefore, it is
<br />considered a related organization.
<br />Q. Contingent Liabilities
<br />Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies,
<br />principally the federal government. Any disallowed claims, including amounts already collected, may constitute
<br />a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor
<br />cannot be determined at this time although the City expects such amounts, if any, to be immaterial.
<br />The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently
<br />determinable, it is the opinion of the City's counsel that resolution of these matters will not have a material
<br />adverse effect on the financial condition of the City.
<br />The City has incurred certain asset retirement obligations related to the operation of its wastewater utility
<br />system. The U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality
<br />regulates wastewater utility system closure and post closure requirements. Environmental engineers calculated
<br />the asset retirement obligation based on the estimated current cost of remediation and removal of the
<br />contamination and contaminated sludge and dirt in the wastewater treatment facilities. The estimated liability of
<br />the legally required closure costs for the waste water utility system was estimated as of September 30, 2023 to
<br />be $5,517,834. 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, 2023, there were no assets restricted to pay this liability.
<br />R. Tax Abatements
<br />As of September 30, 2023, 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 Proram,
<br />Industrial Incentives
<br />Residential
<br />76
<br />Amount ,mof Taxes „Abated „ 2022-23,,,,,,
<br />$ 1,235,526
<br />13,314
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