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07 - Annual Comprehensive Financial ReportItem No. 7 TO: Mayor, Mayor Pro -Tem, and City Council Grayson Path, City Manager FROM: Gene Anderson, Finance Director SUBJECT: 2020-21 ANNUAL CONSOLIDATED FINANCIAL REPORT DATE: May 9, 2022 BACKGROUND: Section 35 of the Paris City Charter requires the City to have an independent annual financial audit. STATUS OF ISSUE: The report provided to you from McClanahan & Holmes, LLC satisfies the Section 35 requirement. The report is being provided to you as the governing body of the City. The City received the desired unmodified opinion from the auditors which reads as follows: "In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Paris, Texas, as of September 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America." I have previously discussed the report with the City Manager. BUDGET: Not affected by this report. RECOMMENDATION: This is not an action item. Is] IW&Wa W.-I11.14F.� ANNUAL COMPREHENSIVE FINANCIAL REPORT Fiscal Year Ended September 30, 2021 Ill Oil III Illiq 111111, Prepared By Finance Department W.E. Anderson, Director CITY OF PARIS, TEXAS Table of Contents Year Ended September 30, 2021 INTRODUCTORY SECTION Page Statement Letter of Transmittal ..................................................................... 1-1 City of Paris Organizational Chart ......................................................... 1-7 List of Elected and Appointed Officials ...................................................... 1-8 FINANCIAL SECTION Independent Auditors' Report .............................................................. Management's Discussion and Analysis ...................................................... Basic Financial Statements Government -Wide Financial Statements Statement of Net Position .............................................................. 13 1 Statement of Activities ................................................................ is 2 Fund Financial Statements BalanceSheet - Governmental Funds ..................................................... 16 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds........ 17 4 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................... 19 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ...................................................... 20 6 Statement of Net Position - Proprietary Funds .............................................. 22 7 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds ........... 24 8 Statement of Cash Flows - Proprietary Funds ............................................... 25 9 Notes to Financial Statements ............................................................ 27 Required Supplementary Information Schedule Texas Municipal Retirement System - Schedule of Changes in Net Pension Liability ................. 68 1 Texas Municipal Retirement System - Schedule of City Pension Contributions ...................... 69 2 Paris Firefighters' Relief and Retirement Fund - Schedule of Changes in Net Pension Liability.......... 70 3 Paris Firefighters' Relief and Retirement Fund - Schedule of City Contributions ..................... 71 4 Texas Municipal Retirement System - Schedule of Changes in Total OPEB Liability and Related Ratios.. 72 5 Texas Municipal Retirement System - Schedule of City OPEB Contributions ....................... 73 6 City of Paris Retiree Health Care Plan - Schedule of Changes in Total OPEB Liability and Related Ratios. 74 7 City of Paris Retiree Health Care Plan - Schedule of City Contributions ............................ 75 8 Combining and Individual Nonmajor Fund Statements and Schedules Nonmajor Governmental Funds ...................................... ................... 76 Combining Balance Sheet - Nonmajor Governmental Funds .................................... 77 9 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds .......................................................... 78 10 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Fund ................................................................ 79 11 Debt Service Fund ................................................................... 80 12 Capital Projects Fund ................................................................. 81 13 Capital Assets Used in the Operation of Governmental Funds - Comparative Schedules by Source ....................................................... 82 14 CITY OF PARIS, TEXAS Table of Contents (Continued) Year Ended September 30, 2021 Page Table STATISTICAL SECTION................................................................ 83 Financial Trends Net Assets/Position by Component........................................................ 84 1 Changes in Net Assets/Position.......................................................... 86 2 Fund Balances of Governmental Funds .................................................... 90 3 Changes in Fund Balances of Governmental Funds ........................................... 92 4 Revenue Capacity Property Tax Levies and Collections....................................................... 94 5 Property Tax Rates - All Direct and Overlapping Governments ................................. 96 6 Assessed and Estimated Actual Value of Property ............................................ 97 7 Principal Property Taxpayers............................................................ 99 8 Debt Capacity Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita ........................................... 101 9 Ratio of Outstanding Debt by Type ....................................................... 102 10 Direct and Overlapping Governmental Activities Debt ........................................ 104 11 LegalDebt Margin Information.......................................................... 105 12 Revenue Pledged Coverage - Water and Sewer Revenue Bonds ................................. 106 13 Demographic and Economic Information Demographic and Economic Statistics..................................................... 107 14 Principal Employers................................................................... 108 15 Operating Information Operating Indicators by Function.......................................................... 109 16 Capital Asset Statistics by Function........................................................ 111 17 Building Permits at Market Value......................................................... 113 18 Full -Time Equivalent City Government Employees by Function .................................. 114 19 CONTINUING DISCLOSURE INFORMATION Continuing Disclosure Information......................................................... 116 7 7;� 77 R1�ac ,gip 40'ANDIN, SMPMbt 91r! �,,, March 22, 2022 Mayor Paula P0111.1gal and Members of tine City Council City of Paris, Texas Dear Mayor and Council Members: I am pleased to submit the Annual Comprehensive Financial Report (ACFR) of the City of Paris, Texas, for the fiscal year ended September 30, 2021, The City of Paris is a financial reporting entity as defined by the (Jovernmetit Accounting Standards Board codification section 2100. As such, it has a separately elected governing body chosen by its citizens in a general, popular election, is a legally separate primary government, and is fiscally independent of other state and local governments. The financial reporting entity includes all the funds of the primary government and its component unit, 1he Paris F"conomic Development Corporation (PEDC). More information about FIEDC can be fbUnd in footnote I.B. which deals with reporting entity topics. Thcre are no other potential componern units. The primary purpose of this report is to provide the City Council, citizens, financial community, and others with detailed information concerning the financial condition and performance of the City of` Paris. It is strongly recommended that any user of this report read the Management's Discussion and Analysis, included in the financial section of the report. In addition, this report provides assurance that the City presents fairly its financial position as verified by independent auditors. THE ANNUAL COMPREIIENSIVE FINANCIAL REPORT The Annual Comprehensive Finatichd Report of the, City of Paris, Texas, for the fiscal year ended September 30, 2021„ which folims, was prepared by the Finance Department, The financial staterrients have been audited by McClanahan and Holmes, LLY, CPAs, whose report is included herein. This audit satisf-ics Article 111, Section 35 oftlic City Charter which requires that an annual audit ofall accounts of the City be made by an independent certified public accountant. The City Finance Department is responsible for both the accuracy of' the presented data and the completeness and fairness of the presentations, including all disclosures. I believe the data presented is accurate in all material aspects and is presented in a manner which fairly sets forth the financial position and results of operations of the City, Furthermore, I believe that all disclosures necessary to enable the reader to gam maximum understanding of the City's 1-mancial activity have been included. P.O. BOX 90137 - PARIS, TEXAS 75461-9037 - (903) 785-7511 - FAX (903) 785-8519 The financial statements have been prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB). The Notes to the Financial Statements are provided in the Financial Section and are considered essential to fair presentation and adequate disclosure for this financial report. The notes include the Summary of Significant Accounting Policies for the City and other necessary disclosures of important matters relating to the financial position of the City. The notes are treated as an integral part of the financial statements and should be read in conjunction with them. General Information Regarding the City and Surrounding County The City of Paris is the county seat and principal commercial center of Lamar County and is located at the intersection of United States Highways 271 and 82, approximately 100 miles northeast of Dallas near the Red River. The City is served by 6 banks. The City's 2020 census is 24,476, a decrease of 2.76% from the 2010 census of 25,171. Lamar County (the County) is located in northeast Texas and borders the State of Oklahoma. The County, which is situated between the Red River and the Sulphur River, is traversed by United States Highways 271 and 82, State Highways 19 and 24, and 32 farm -to -market roads. The County's 2020 census is 50,088, an increase of 0.59% over the 2010 census of 49,793. The City is a regional medical center serving patients in Northeast Texas and Southeast Oklahoma. Founded in 1911 as St. Joseph's Hospital, Paris Regional Medical Center is a 154 bed general acute-care hospital. The City provides utilities through its 36 MGD water plant and 7.25 MGD wastewater plant. Electric power is supplied to Paris by TXU Electric's interconnected transmission system. It has a generating capacity of 22,808,000 KW. The supply of electric power is adequate to meet the requirements of any commercial or industrial demand. Atmos Energy provides natural gas for residential, commercial, and industrial users. Atmos Energy is the largest provider of pure natural gas in America. It provides service to over three million customers in 12 states. There are 3 transmission lines serving the City with a line pressure of 300 pounds per square inch. Telephone service is provided by AT &T. Educational facilities of the City are provided by 3 independent school districts. Each of the districts is accredited by the Texas Education Agency. Higher education needs in the County are provided at Paris Junior College located in the City. Total enrollment of these entities is 11,561. Tourists are attracted to the area by activities on Lake Crook and Pat Mayse Reservoir. Pat Mayse Reservoir is located 15 minutes from the City and provides 6,000 acres for boating, fishing, and camping. The Gambill Goose Refuge and numerous hunting and fishing areas are also located in the County. Other points of interest and activities include the Sam Bell Maxey House, the A.M. Aikin Archives, Veterans Memorial, and the Lamar County Historical Society Museum. Also, the City has one 18 -hole golf course, one public swimming pool, 26 tennis courts, 3 walk/jog tracks, a sports complex, and 24 public park areas, Government Organization The City was founded in 1839 with the current charter adopted in November of 1948 and last revised in 2011. The City operates under the Council/Manager form of government with 7 council members elected from single member districts. The Mayor is elected by the Council itself to serve as moderator of the group. The Council members can serve a maximum of IW three consecutive 2 year staggered terms. The Mayor and Council appoint the City Manager, the City Attorney, and the Municipal Judge. The City is a Home Rule City with all powers granted to home rule cities by the constitution and laws of the State of Texas. The Council enacts legislation, adopts budgets, and determines policies of the City of Paris. The City Manager executes the laws and administers the government of the City. Economic Condition and Outlook Taxable values, as originally certified by the Lamar County Appraisal District, for fiscal year 2021-22 reflect a 15,80% increase over the 2020-21 values. Building permits for new residential and commercial construction were valued at $9,903,938 for fiscal year 2020-21. This activity should be reflected in next year's taxable values. Sales taxes for 2020-21 increased from the prior year by 11.52%. Current rebates are 0.14% below the 2020-21 rebates through February 2022. Hotel occupancy taxes were up 36.97% compared to 2019-20 taxes as COVID-19 seemed to be in the rearview mirror of most travelers. First quarter 2021-22 collections were 1.24% above the same period in 2020-21. Franchise fees for 2020-21 were down 9.78% compared to the previous year. The City of Paris, Paris Economic Development Corporation, and the Lamar County Chamber of Commerce have been actively recruiting new business to the area as well as supporting already existing businesses. PEDC has several active incentive commitments in regard to its recruitment of new industry and support of existing industry. There are currently incentives totaling $1,222,000 involving American Spiral Weld, Huhtamaki, and Metro Gate. In addition, TxDOT announced that it would build a new district headquarters in the Gene Stallings Business Park, General Fund receipts equaled 115.01% of budget. This surplus of revenues was caused primarily by Emergency Medical Service revenue, Federal funding related to COVID-19 & economic stimulus, and sales taxes. General Fund expenditures were 106.47% of budget. This variance is mainly due to COVID-19 related expenditures for Public Safety and Public Health. For the 2021-22 fiscal year, the City Council adopted a tax rate of .45373 cents per $100 of value. This rate is $0.02705 cents lower than the previous year but does allow maintaining all services at their current levels and funds all required interest and sinking funds. Taxable property value increased 2.55°/x. Long-term Financial Planning and Relevant Financial Policies The City continues to exercise its long-range financial plan. The City formalized a key financial policy in 2010 that had been informally followed previously: a utility rate maintenance policy. The utility rate maintenance policy will help assure the financial integrity of the enterprise fund along with its related interest and sinking funds. Another policy was formalized in 2013 in the form of a reserve level guideline for both the general fund and utility fund. Adequate reserve levels provide the City with the ability to deal with extraordinary events and maintain its credit worthiness. This credit worthiness, as reflected in the current financial statements, allowed the City to obtain very favorable interest rates on debt issued in 2016, 2017, 2018, 2020, and 2021. 1-3 Major Initiatives The City continues to work on its long-range plan to maintain its infrastructure. The City called for a general obligation bond election in May 2013 in the amount of $45,000,000 which passed overwhelmingly. Proceeds from these bonds were used for water and sewer infrastructure improvements. These bonds will be paid for out of utility system revenues. With the payoff of earlier debt issues, it was not necessary to raise utility rates to fund the new debt. Likewise a $9,750,000 bond election for street construction and repair was approved in 2017 and those projects have been completed. In May of 2021, the City issued $43,855,000 in Combination Tax and Surplus Revenue Certificates of Obligation to fund Phase One construction of a new wastewater treatment plant. These bonds will be paid for out of utility system revenue. Also, it is the City's intent to use the Federal American Rescue Plan funding to install water transmission lines around Loop 286 to aid in industrial recruitment as well as providing a second water line connection to certain areas of town. The City also continues to expand its effort in law enforcement related area. Programs in this effort include the Auto Theft Task Force and Justice Assistance Grant for needed equipment. From a development standpoint, the City has taken several steps. Reentry into the State of Texas Main Street Program has channeled additional funds for revitalization of existing structures and businesses. The City continues to work closely with the Paris Economic Development Corporation to attract new business to Paris and to support existing businesses as well. Working with the Chamber of Commerce, the City is effectively using the civic center to attract people and business to Paris. City officials are also closely working with Keep Paris Beautiful, Inc. to promote and improve the City. The Historic Preservation Committee is working with local property owners to maintain the historical character of the City. The City also implemented a new incentive program to encourage residential housing construction. The City, PEDC, and the Chamber of Commerce are currently working to develop a common branding strategy to emphasize our unity in economic development and other areas. Other Financial Information The financial statements of the City of Paris, Texas, have been prepared in conformity with generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Using the GASB 34 reporting model, the City's Comprehensive Annual Financial Report provides for a management's discussion and analysis, government -wide financial statements, major fund financial statements, notes to the financial statements, and other required supplementary information. The City has a written investment policy that conforms to state statutes, which outlines permissible investments. The City pools its cash balances for investment purposes from the various funds maintained in its consolidated cash account. Interest earnings of the pool are allocated to the various funds of the City based upon a fund's equity position in the pool. The City of Paris' primary risk exposures are in the areas of workers' compensation and tort liability. Provision for these risks is made through participation in the Texas Municipal League's risk pool. Between 30 days and 90 days prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget, which represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing them. Public hearings are conducted at which all interested persons' comments concerning the budget for the next fiscal year are heard. The budget is legally enacted by the City Council through passage of an ordinance not later than the 27` day of the last month prior to the I-4 beginning of the fiscal year. Generally, appropriations are legally adopted at the department level. Budgetary controls are maintained at the major category of expenditure level within each operating division. All anticipated expenditures are budgeted for control purposes. Capital project funds are appropriated on a project by project basis. Expenditures and/or expenses are directly monitored by the City Council. Internal Controls Internal accounting controls are designed to provide reasonable, but not absolute, assurance of the safeguarding of assets against loss from unauthorized use or disposition and reliable financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived. All internal control evaluations occur within this framework. The Finance Department's staff believes the City's internal control structure adequately ensures compliance with laws and regulations and reasonable assurance for safeguarding of assets. Debt The following schedule outlines the outstanding City debt as of 09-30-21: Moody's Revenue Investors Issue Tax Supported Supported Fund Maturity Rating Insured 2012 G.O. Refunding Bonds 2013 C.O. (TWDB) 2013 G.O. Bonds 2016 G.O. Bonds 2017 G.O. Bonds 2018 G.O. Bonds 2020 Tax and Rev. C.O. 2020 G.O. Refunding Bonds 2020 Tax Notes 2021 Tax and Rev. C.O. Capital Lease-Firetrucks SuRRMA Loan Total Independent Audit $ 405,000 S - 12-15-21 Aa3 - 1,710,000 12-15-32 N/A - 27,065,000 12-15-32 Aa3 - 6,900,000 12-15-36 Aa3 8,200,000 - 06-15-37 Aa3 95,000 900,000 06-15-38 Aa3 1,365,000 - 06-15-30 N/A 1,765,000 - 12-15-29 Aa3 955,000 - 06-15-26 N/A - 43,855,000 12-15-50 Aa3 792,453 - 01-28-26 NIA 283,307 - 06-29-25 N/A S 13,860,760 S 80,430,000 The City Charter requires an annual audit to be made of the accounts, financial records, and transactions of all administrative departments of the City by a certified public accountant selected by the City Council. The requirement has been complied with, and the Independent Auditors' Report has been included in this report. I-5 Acknowledgments The preparation of this report could not have been accomplished without the full support and efficient and dedicated efforts of the entire staff of the Finance Department and the competent services of the independent auditors, McClanahan and Holmes, LLP, CPAs. I express my appreciation to all members of the Finance Department who assisted and contributed to the completion of this report and to all City departments involved in the preparation of information for this report. In addition, I express my appreciation to the Mayor, City Council, and City Manager for their continuing interest and support in planning and conducting the financial affairs of the City in a responsible and progressive manner. Respectfully submitted, W. E. Anderson Director of Finance I-6 O List of Elected and Appointed Officials Elected Officials Paula Portugal — Mayor Reginald Hughes — Mayor Pro -Tem Renae Stone Gary Savage Mihir Pankaj Linda Knox Clayton Pilgrim Appointed Officials Grayson Path — City Manager Gene Anderson, CPA — Finance Director Janice Ellis — City Clerk Stephanie Harris — City Attorney Tom E. Hunt, III — Presiding Municipal Court Judge Michael Smith — Public Works Director Richard Salter — Police Chief Tim Deghelder — Library Director Sandy Collard — Human Resources Russell Thrasher — Emergency Medical Services Andrew Mack — Planning and Development Doug Harris — Utilities Director Thomas McMonigle— Interim Fire Chief I-8 McClanahan and Holmes, LLP CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT Honorable Mayor and City Council City of Paris, Texas We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information including the budgetary comparison of the City of Paris, Texas, as of and for the year ended September 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 entity'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 entity'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 position of the governmental activities, the business -type activities, the discretely presented component 228 SIXTH STREET S.E. PARIS, TEXAS 75460 STEVEN W. MOHUNDRO. CPA 903-784-4316 GEORGE H. STRUVE, CPA FAX 903-784.4310 DEBRA J. WILDER, CPA ---. TEFFANY A. KAVANAUGH, CPA 304 WEST CHESTNUT APRIL J. HATFIELD, CPA DENISON, TEXAS 75020 BRITTANY L. MARTIN, CPA 903465-6070 FAX 903465-6093 1400 WEST RUSSELL BONHAM, TEXAS 75418 903-583-5574 FAX 903-583-9453 INDEPENDENT AUDITORS' REPORT Honorable Mayor and City Council City of Paris, Texas We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information including the budgetary comparison of the City of Paris, Texas, as of and for the year ended September 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 entity'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 entity'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 position of the governmental activities, the business -type activities, the discretely presented component Honorable Mayor and City Council City of Paris, Texas unit, each major fund, and the aggregate remaining fund information of the City of Paris, Texas, as of September 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund for the year then ended in accordance 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 the management's discussion and analysis, the schedules of changes in net pension liability and related ratios, the schedules of changes in total OPER liability and related ratios, and the schedules of City contributions 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Paris, Texas' basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, statistical section, and continuing disclosure information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate 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 combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, statistical section, and continuing disclosure information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Paris, Texas March 22, 2022 Fq 911cCianahan andMolmes, .GGT Certified Public Accountants MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Paris (the City), we offer readers of the City of Paris, Texas' financial statements this narrative overview and analysis of the financial activities of the City of Paris for the fiscal year ended September 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal as well as the City's financial statements. Financial Highlights of the Primary Government • The City dropped its tax rate from 0.51608 to 0.48078 per $100 of valuation for fiscal year 2020-21. • For the upcoming 2021-22 fiscal year, the City lowered its tax rate to 0.45373 per $100 of valuation. • City-wide revenues this year exceeded City-wide expenses by $5,144,346 whereas in the previous year revenues exceeded expenses by $5,978,761. The underlying cause the lower surplus was a decrease in operating grant revenue. • At the end of the fiscal year, unassigned fund balance for the general fund was $20,596,761 or 75.41%, of total general fund expenditures. The prior year unassigned fund balance was $15,990,260 or 58.60%, of general fund expenditures. • At the end of the fiscal year, the net position of the proprietary funds was $45,212,203 compared to $43,803,809 the prior year. Overview of the Financial Statements This management's discussion and analysis is intended to serve as an introduction to the City of Paris' basic financial statements. The City of Paris' basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government -Wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the City of Paris' finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City of Paris' assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Paris is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. 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 in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of Paris that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Paris include general government, public safety, public works, culture and recreation, health, and airport. The business -type activities of the City of Paris include water production and distribution as well as wastewater collection and treatment. The government -wide financial statements include not only the City of Paris itself (known as the primary government), but also a legally separate economic development corporation (known as the component unit) over which the City of Paris is able to exercise significant control. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. The government -wide financial statements can be found at Statement 1 and 2. 3 Fund Financial Statements 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 City of Paris, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Paris can be divided into two categories: governmental funds and proprietary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for government activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Paris classifies its governmental funds as either Nonmajor or Major. Nonmajor governmental funds include all special revenue funds and permanent funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, capital projects fund, and the debt service fund, all of which are considered to be Major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found beginning with Statement 3 and continuing through Statement 6 of this report. Proprietary Funds The City of Paris maintains only one type of proprietary fund. An enterprise fund (the type used by the City of Paris) is used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Paris uses an enterprise fund to account for its water and sewer related activities. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund used by the City of Paris is considered a major fund. The basic proprietary fund financial statements can be found beginning with Statement 7 and continuing through Statement 9 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found immediately after the Statement of Cash Flows -Proprietary Funds in this report. 4 Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Paris' progress in funding its obligation to provide pension and other post -employment benefits to its employees. Required supplementary information can be found immediately following the Notes to the Financial Statements. Combining and individual fund statements and schedules can be found immediately after the required supplementary information in this report. Government -Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Paris, assets exceeded liabilities by $85,879,855 at the close of the most recent fiscal year. This compares to $80,850,369 for the previous year. This was a 6.22% increase in net position, By far, the largest portion of the City of Paris' net position ($60,113,959 or 70.00%) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment). The City of Paris uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Paris' investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Paris Net Position k" Governmental Activities Business -Type Activities Total Total 2020 2021 2020 2021 2020 2021 Assets Current and Other Assets $ 27,049,806 $30,225,091 $ 18,991,923 $ 67,149,358 $ 46,041,729 $ 97,374,449 Capital Assets 41,127,102 40,391=518 66,921,032 67,853,908 108,048,134 108,245,426 Total Assets 68,176,908 70,616,609 85,912,955 135,003,266 154,089,863 205,619,875 Deferred Outflows Related to Asset Retirement Obligation - - - 2,804,300 - 2,804,300 Related to Pension 958,653 1,651,067 171,157 163,384 1,129,810 1,814,451 Related to OPEB 334,164 456,770 31,764 47,281 365,928 504,051 Total Deferred Outflows 1,292,817 2,107,837 202,921 3,014=965 1,495,738 5,122,802 Long -Term Liabilities Outstanding 28,688,849 27,898,649 40,079,561 86,894,194 68,768,410 114,792,843 Other Liabilities 1,505,509 1,291;784 1,828907 5,519,745 3,334,416 6,811,529 Total Liabilities 30,194,358 29,190,433 41,908,468 92,413,939 72,IO2,826 121,604,372 Deferred Inflows Related to Pensions 1,688,602 2,650,876 390,412 378,487 2,079,014 3,029,363 Related to OPEB 243,149215,485 13,187 13,602 256,336 229,087 Total Deferred Inflows 1,931,751 2,866,361 403,599 392,089 2,335,350 3,258,450 Net Position Net Investment in Capital Assets 21,907,532 26,703,929 28,880,579 33,410,030 50,788,111 60,113,959 Restricted 7,857,800 7,357,621 - - 7,857,800 7,357,621 Unrestricted 7,578,284 6;606,102 14,923,230 11,802,173 22,501,514 18,408,275 Total Net Position $ 37,343,616 $ 40,667,652 $ 43,803,809 $ 45,212,203 $ 81,147,425 $ 85,879,855 k" An additional portion of the City of Paris' net assets ($7,357,621 or 8.57%) represents resources that are subject to external restrictions on how they may be used. The balance of unrestricted net assets {$18,408,275 or 21.43%) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Paris is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities net investment in capital assets, restricted net position, and unrestricted net position. This was also true for the prior fiscal year. Statement I reflects the relevant deferred outflows and inflows for the fiscal year. Outflows are intended to account for the anticipated future liabilities for pension payments as well as contributions toward the cost of retiree health care and other post -employment benefits. Inflows anticipate future contributions to the pension plan and retiree health care and other post -employment benefits as well as certain asset retirement obligations. Governmental Activities Governmental activities increased the City of Paris' net position by $3,673,152 or 9.91% during the current fiscal year. Total general and program revenues were down $1,054,281(3.11%). This decrease was due to a significant drop in program revenues specifically, operating grants. This drop is not surprising given the previous year was unusually high with such activities. Property Taxes Sales Taxes Franchise Taxes Hotel Occupancy Tax Unrestricted Investment Earnings Miscellaneous Gain (Loss) on Sale of Capital Asset Program Revenues General Revenues & Program Revenues Increase 2020 2021 (Decrease) 9,338,087 8,245,939 4,714,021 872,418 197,203 714,470 25,246 9,804,062 $ 9,561,394 9,196,157 4,253,182 1,192,873 41,704 546,391 125,176 7,940,288 223,307 950,218 (460,839) 320,455 (155,499) (168,079) 99,930 (1,863,774) $ 33,911,446 $ 32,857,165 $ (1,054,2E) 6 The following table provides a summary of the City's operations for the years ending 2020 and 2021 for both governmental and business -type activities. City of Paris Changes in Net Position Expenses General Government Governmental Activities Business -Type Activities Total 4,409,428 5,481,353 2020 2021 2020 2021 2020 2021 Revenues Public Works 6,699,707 6,452,355 - - 6,699,707 Program Revenues Health 4,267,819 3,962,596 - - 4,267,819 Charges for Services $ 7,327,433 $ 7,331,549 $15,043,788 $16,567,528 $22,371,221 $23,899,077 Operating Grants and Other - - - - - Contributions 2,151,740 369,289 - - 2,151,740 369,289 Capital Grants and Interest on Long -Term Contributions 324,889 239,450 - - 324,889 239,450 General Revenues Water and Sewer - - 14,026,074 15� 14,026,074 Property Taxes 9,338,087 9,561,394 - - 9,338,087 9,561,394 Sales Taxes 8,245,939 9,196,157 - - 8,245,939 9,196,157 Franchise Taxes 4,714,021 4,253,182 - - 4,714,021 4,253,182 Hotel Occupancy Transfers 4,533,324 3,850,603 1,445,437 1,293,743 5,978,761 Tax 872,418 1,192,873 - - 872,418 1,192,873 Unrestricted Increase (Decrease) in Investment Earnings 197,203 41,704 427,723 (51,563) 624,926 (9,859) Other 739,716 671,567 - 19,321 739,716 690,888 Total Revenues 33,911,446 32,857,165 15,471,511 16,535,286 49,382,957 49,392,451 Expenses General Government 4,409,428 5,481,353 - - 4,409,428 5,481,353 Public Safety 12,727,703 11,874,360 - - 12,727,703 11,874,360 Public Works 6,699,707 6,452,355 - - 6,699,707 6,452,355 Health 4,267,819 3,962,596 - - 4,267,819 3,962,596 Culture and Recreation 846,669 762,080 - - 846,669 762,080 Other - - - - - - Cox Field 311,796 374,649 - - 311,796 374,649 Interest on Long -Term Debt 115,000 99,169 - - 115,000 99,169 Water and Sewer - - 14,026,074 15� 14,026,074 1515 2 Total Expenses 29,378,122 29,006,562 14,026,074 15,241,543 43,404,196 44,248,105 Increase (Decrease) in Net Position Before Transfers 4,533,324 3,850,603 1,445,437 1,293,743 5,978,761 5,144,346 Transfers/SpecialItems (146,679) (177,451) 146,679 177,451 - - Increase (Decrease) in Net Position 4,386,645 3,673,152 1,592,116 1,471,194 5,978,761 5,144,346 Net Position, Beginning 31,677,862 37,046,560 42,253,191 43,803,809 73,931,053 80,850,369 Prior Period Adjustment 982,053 (52,060) (41,498) (62,800) 940,555 (114,860) Net Position, Ending $ 37,046,560 $402667,652 $43,8032809 $452212,203 $80,850,369 $85,8792855 7 Business -Type Activities Business -type activities increased the City of Paris' net position by $1,471,194. This increase was caused by a rate increase, transfers, and a prior period adjustment. Financial Analysis of the Government's Funds As noted earlier, the City of Paris uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental Funds The focus of the City of Paris' governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Paris' financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Total Assets Total Liabilities Deferred Inflows of Resources Fund Balances Nonspendable: Inventory Permanent Fund Principal Restricted For: Debt Service Capital Projects Notes Law Enforcement Public Education Community Development Assigned: Library Community Development Unassigned: General Fund Total Fund Balances Total Liabilities, Deferred Inflows, and Fund Balances Governmental Funds 2020 2021 27,049,807 $ 30,225,090 1,228,455 1,190,557 764,853 813,024 500,495 181,620 98,400 98,543 1,766,863 1,928,672 3,839,984 3,631,092 1,493,902 672,627 655,520 707,090 415,120 107,574 75,801 76,935 220,154 220,595 15,990,260 20,596,761 25,056,499 28,221,509 27,049,807 30,225,090 As of the end of the current fiscal year, the City of Paris' governmental funds reported combined ending fund balances of $28,221,509. Approximately 72.98% of this total amount ($20,596,761) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it is non -spendable, restricted, or assigned to 1) Permanent Fund Principal ($98,543), 2) pay debt service ($1,928,672), 3) inventories ($181,620), 4) law enforcement ($672,627), 5) library ($76,935), 6), Public Education ($707,090), 7) capital projects ($3,631,092) and 8) Community Development ($107,574). Revenues Expenditures Deficiency of Revenues Under Expenditures Total Other Financing Sources (Uses) Net Change in Fund Balances Increase (Decrease) in Inventory Fund Balances - Beginning Prior Period Adjustment Fund Balances - Ending FITTIti7i1:;i M1, Governmental Funds Revenues, Expenditures, and Changes in Fund Balances 2020 2021 $ 34,259,642 $ 32,751,652 33,382,864 32,306,405 876,778 445,247 1,291,321 2,771,823 2,168,099 3,217,070 21,948,406 25,056,499 939,994 (52,060) $ 25,056,499 $ 28,221,509 The General Fund is the chief operating fund of the City of Paris. At the end of the current fiscal year, unassigned fund balance of the general fiord was $20,596,761 ($15,990,260 the previous year), while total fund balance reached $21,489,282 ($17,150,077 the previous year). The increase in the fund balance of the general fund was primarily due to increased cash position and receivables. As a measure of the general fund's liquidity, it may be useful to compare both unassigned find balance and total fund balance to total fund expenditures. Unassigned fund balance represents 63.75% of total general fund expenditures, while total fund balance represents 87.36% of that same amount. During the year, the City also made budgeted transfers from the Water and Sewer Fund to the General Fund for administrative support and payment of franchise fees. Transfers were made from the Water and Sewer Fund to the Debt Service Fund to make debt service payments. Other governmental funds (nonmajor) include the Permanent and Expendable Library Funds, Special Revenue Fund, Grant Fund, and the Community Development Fund. Only the General Fund had unassigned fund balance at the end of the year. Budget Analysis The City of Paris adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided as Statement 6 in this report to demonstrate compliance with this budget. The final appropriation of the general fund was overspent by $1,729,835 ($4,055,949 overspent the previous year). This 6.47% variance is mainly due to bad debt charge offs in the EMS and Police (Municipal Court) Departments. General Fund revenues were over budget by 15.01% or $4,014,955 ($4,491,429 last year). Higher than expected sales tax collections and increased billings by EMS and Municipal Court account for most of the increase. Capital Projects Fund The Capital Projects Fund is funded by the General Fund and/or the Proprietary Fund on an as needed basis or by debt issue authorized by the City Council. As Proprietary Fund projects are completed in the Capital Projects Fund, they are transferred back to the Proprietary Fund. The fund balance in the Capital Projects Fund was $3,627,291 ($3,836,182 last year). This reduction was due to relatively minor expenditures of existing cash on hand for various projects with the only offsetting revenue being interest income. Variances from year to year are common in this fund as projects are approved on a year to year basis by the City Council. Debt Service Fund The Debt Service Fund has a total fund balance of $1,928,372 ($1,766,863 the previous year), all of which is reserved for the payment of debt service. The net increase in fund balance during the current year in the debt service fund was $161,809 ($39,798 increase the previous year). The government enacted a dedicated property tax for debt service at the beginning of the current fiscal year. This tax produced revenues of $1,541,384 in the current fiscal year ($1,892,804 the previous year). Proprietary Fund The City of Paris' Proprietary Fund provides the same type of information found in the government -wide financial statements, but in more detail. Unrestricted net position of the Water and Sewer Fund at the end of the year amounted to $11,802,173 ($14,923,230 the previous year). Factors concerning the finances of this fund have already been addressed in the discussion of the City of Paris' business -type activities. Capital Asset and Debt Administration Capital Assets The City of Paris' investment in capital assets for its governmental and business -type activities as of September 30, 2021 amounts to $108,245,426 ($108,048,134 the previous year). Both of these amounts are net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements, machinery and equipment, park facilities, roads, highways, and bridges. Net Capital Assets 10 Governmental Activities Business -Type Activities Total 2020 2021 2020 2021 2020 2021 Land $ 5,950,108 $ 5,950,108 $ 339,620 $ 339,620 $ 6,289,728 $ 6,289,728 Buildings and System 10,496,986 10,048,032 28,270,660 25,794,430 38,767,646 35,842,462 Improvements Other than Buildings 2,664,467 2,363,745 - 2,664,467 2,363,745 Machinery, Furniture, and Equipment 3,784,517 4,608,507 1,114,401 1,324,682 4,898,918 5,933,189 Infrastructure 11,566,617 17,157,762 - - 11,566,617 17,157,762 Construction in Progress 6,664,407 263,364 33,953,797 37,188,254 40,618,204 37,451,618 Water Rights -Net - - 3,242,554 3,206,922 3,242,554 3,206,922 Total $ 41,127,102 $ 40,391,518 $ 66,921,032 $ 67,853,908 $ 108,048,134 $ 108,245,426 10 Additional information on the City of Paris' capital assets can be found in note IV. D. of the Notes to the Financial Statements. Long -Term Debt The City has two capital leases with $792,453 in principal outstanding at year end. The City of Paris also has total debt outstanding in the amount of $94,290,860 (includes the two capital leases). Of this amount, $13,860,860 comprises debt being paid for by property tax or hotel tax revenues, and $80,430,000 represents bonds being paid for by water and sewer revenues. Paris' bond debt increased by $41,119,834 during the fiscal year. This was due to the $43,855,000 Tax & Revenue COs issued in 2021 for the purpose of building a new waste water plant. The City's underlying bond rating from Moody's is Aa3. The maximum tax rate permitted by Article XI, Section 5 of the State of Texas constitution is $2.50 per $100 of assessed valuation. Consequently, no legal debt margin can be calculated. The state attorney general has traditionally allowed up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of $0A8078 per $100 valuation for the 2020-21 fiscal year. This rate was broken down into $0.39788 per $100 valuation for operations and $0.08290 per $100 valuation for debt service. Using the traditional allowance of the state attorney general as a guide, the City of Paris is utilizing only 5.53% of its debt capacity. Additional information on the City of Paris' tang -term debt can be found in note IV. K. of the Notes to the Financial Statements. Economic Factors and Next Year's Budgets and Rates • Sales tax revenues are projected to grow 3% in the coming year. • New construction amounted to 17 residential units and 8 commercial units. • Local population growth is expected to be minimal. • The tax rate is expected to drop below $0.44 per $ 100 of value as property values continue to grow. • Franchise fees are expected to remain stable. All of these factors were considered in preparing the City of Paris' budget for 2021-22. 11 Moody's Revenue Final Investors Issue Tax Supported Supported Maturity Rating 2012 G.O. Refunding Bonds $ 405,000 $ - 12-15-2021 Aa3 2013 C.O.s (TWDV) - 1,710,000 06-15-2032 N/A 2013 G.O. Bonds 27,065,000 12-15-2032 Aa3 2016 G.O. Bonds -6,900,000 12-15-2036 Aa3 2017 G.O. Bonds 8,200,000 - 06-15-2037 Aa3 2018 G.O. Bonds 95,000 900,000 09-30-2028 Aa3 2020 Tax and Rev C.O.s 1,365,000 - 06-15-2030 N/A 2020 G.O. Refunding Bonds 1,765,000 12-15-2029 Aa3 2020 Tax Notes 955,000 06-15-2026 N/A 2021 Tax & Rev. C.O.s 43,855,000 12-15-2050 Aa3 SuRRMA Loan 283,307 - 06-29-2025 N/A Capital Leases — Firetrucks 792,453 - 01-28-2026 N/A $ 13,860,760 $ 80,430,000 Paris' bond debt increased by $41,119,834 during the fiscal year. This was due to the $43,855,000 Tax & Revenue COs issued in 2021 for the purpose of building a new waste water plant. The City's underlying bond rating from Moody's is Aa3. The maximum tax rate permitted by Article XI, Section 5 of the State of Texas constitution is $2.50 per $100 of assessed valuation. Consequently, no legal debt margin can be calculated. The state attorney general has traditionally allowed up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of $0A8078 per $100 valuation for the 2020-21 fiscal year. This rate was broken down into $0.39788 per $100 valuation for operations and $0.08290 per $100 valuation for debt service. Using the traditional allowance of the state attorney general as a guide, the City of Paris is utilizing only 5.53% of its debt capacity. Additional information on the City of Paris' tang -term debt can be found in note IV. K. of the Notes to the Financial Statements. Economic Factors and Next Year's Budgets and Rates • Sales tax revenues are projected to grow 3% in the coming year. • New construction amounted to 17 residential units and 8 commercial units. • Local population growth is expected to be minimal. • The tax rate is expected to drop below $0.44 per $ 100 of value as property values continue to grow. • Franchise fees are expected to remain stable. All of these factors were considered in preparing the City of Paris' budget for 2021-22. 11 Requests for Information This financial report is designed to provide a general overview of the City of Paris' finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Office of the Finance Director, 135 S.E. First Street, City of Paris, Texas 75460. 12 Assets Cash and Cash Equivalents Investments Receivables (Net of Allowance for Uncollectibles) Inventories Prepaid Assets Net Pension Asset Restricted Assets Cash and Cash Equivalents Investments Due from tither Governments Land Development Costs Water Rights (Net of Accumulated Amortization) Capital Assets Not Being Depreciated Land Construction in Progress Capital Assets (Net of Accumulated Depreciation) Buildings and System Improvements Other Than Buildings Machinery and Equipment Infrastructure Total Assets CITY OF PARIS, TEXAS Statement of Net Position September 30, 2021 Primary Government Governmental Business -Type Activities Activities Total Statement 1 Component Unit Economic Development $ 15,509,252 $ 8,415,336 $ 23,924,588 $ 2,254,028 8,106,025 3,543,244 11,649,269 2,114,248 4,843,430 2,776,172 7,619,602 310,796 181,620 356,270 537,890 - 71,922 - 71,922 5,683 - 208,823 208,823 - 888,648 9,848,928 10,737,576 - 220,954 42,000,585 42,221,539 - 403,240 - 403,240 - - - - 1,986,740 - 3,206,922 3,206,922 - 5,950,108 339,620 6,289,728 - 263,364 37,188,254 37,451,618 - 10,048,032 25,794,430 35,842,462 - 2,363,745 - 2,363,745 - 4,608,507 1,324,682 5,933,189 2,643 17,157,762 - 17,157,762 - 70,616,609 135,003,266 205,619,875 6,674,138 Deferred Outflows of Resources Deferred Outflows Related to Asset Retirement Obligation - 2,804,300 2,804,300 - Deferred Outflows Related to Pensions 1,651,067 163,384 1,814,451 - Deferred Outflows Related to OPEB 456,770 47,281 504,051 - Total Deferred Outflows of Resources 2,107,837 3,014,965 5,122,802 - The accompanying notes to the financial statements are an integral part of this statement. 13 The accompanying notes to the financial statements are an integral part of this statement. 14 CITY OF PARIS, TEXAS Statement I Statement of Net Position (Continued) September 30, 2021 Component Primary Government Unit Governmental Business -Type Economic Activities Activities Total Development Liabilities Accounts Payable and Other Current Liabilities 1,190,558 472,274 1,662,832 7,110 Accrued Interest Payable 101,226 922,743 1,023,969 9,326 Unearned Revenue - 3,078,369 3,078,369 - Customers' Deposits 1,046,359 1,046,359 - Intergovernmental Payable 18,789 Noncurrent Liabilities Due Within One Year 1,689,200 2,367,277 4,056,477 104,446 Due in More Than One Year 13,311,254 84,299,502 97,610,756 1,117,308 Net Pension Liability 10,028,352 -10,028,352 - Net OPER Liability 2,869,843 227,415 3,097,258. - Total Liabilities 29,190,433 92,413,939 121,604,372 1,256,979 Deferred Inflows of Resources Deferred Inflows Related to Pensions 2,650,876 378,487 3,029,363 - Deferred Inflows Related to OPER 215,485 13,602 229,087 Total Deferred Inflows of Resources 2,866,361 392,089 3,258,450 - Net Position Net Investment in Capital Assets 26,703,929 33,410,030 60,113,959 2,643 Restricted for Construction 3,843,115 3,843,115 - Debt Service 1,928,672 1,928,672 1,221,754 Law Enforcement 672,627 672,627 Education 707,090 707,090 Community Development 107,574 107,574 - Industrial Incentives - - 1,222,000 Land Development Costs - - 1,986,740 Permanent Library Funds Nonexpendable 98,543 -98,543 - Unrestricted 6,606,102 11,802,173 18,408,275 984,022 Total Net Position $ 40,667,652 $ 45,212,203 $ 85,879,855 $ 5,417,159 The accompanying notes to the financial statements are an integral part of this statement. 14 N N h n ON to M tD ON Cl •C *D yc't Gh e1' •--� V1 N C*- ""' O N Om0- v 0�0- t0 C) � �..• ^ � W � O � b9 69 O a rte - 0 0 O M O (4 In Ike N 'o .� < d' VS to � _ v F N M 03r. 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P O+ ON 00 00 P oA vCi %D VS P e!' vD -n t In %0 N N to In t- C> r c0 to .v 00 M D K (N vmi ml 00 tt°n to 0000- ch 4�i ^•cF t` �O ti0 m to 6R 60,111 g m C! to %D C> o. O, N mI:r m VS c a° v 4.) m c M m M " C1 'o --+ VS to to CD r• H 5 0 y�j -4 CF rty 00 6},t va C m --C .OAC' 'in 'vf C' 0o C' Qr n M O M N N N N & rn v O : a VS �D V1 V1 v O i0 c0. O C 'O rA a 0. a 69 69 69ti tl �acnwxx�C� 0 H U v 2 a �, 2 m � r ts r c 00 w � � a � .� •$ � fs. � � y az 8 •'= p � H 8w CITY OF PARIS, TEXAS Statement 3 Balance Sheet - Governmental Funds September 30, 2021 Total Nonmajor Total Debt Capital Governmental Governmental General Service Projects Funds Funds Assets Cash and Cash Equivalents $ 9,781,751 $ 1,911,557 $ 3,627,281 $ 1,077,310 $ 16,397,899 Investments 8,228,931 - - 98,048 8,326,979 Receivables (Net of Allowance for Uncollectibles) 4,741,112 101,402 - 916 4,843,430 Inventories 181,620 - - - 181,620 Prepaid Items 71,922 - - - 71,922 Due from Other Governments 403,240 - - • 403,240 Total Assets $ 23,408,576 9 2,012,959 $ 3,627,281 $ 1,176,274 $ 30,225,090 Liabilities, Deferred Inflows, and Fund Balances Liabilities Accounts Payable and Accrued Liabilities $ 1,190,557 $ - $ - $ - $ 1,190,557 Total Liabilities 1,190,557 - - - 1,190,557 Deferred Inflows of Resources Unavailable Revenue - Property Taxes 702,264 84,287 - - 786,551 Unavailable Revenue - Other 26,473 - - - 26,473 Total Deferred Inflows of Resources 728,737 84,287 - 813,024 Fund Balances Nonspendable Inventory 181,620 - - - 181,620 Permanent Library Funds - - - 98,543 98,543 Restricted for Debt Service - 1,928,672 - - 1,928,672 Capital Projects 3,811 - 3,627,281 - 3,631,092 Notes - - - - - Law Enforcement - - - 672,627 672,627 Public Education 707,090 - - - 707,090 Community Development - • - 107,574 107,574 Assigned Library • - - 76,935 76,935 Community Development - - - 220,595 220,595 Unassigned: General Fund 20,596,761 - - - 20,596,761 Total Fund Balances 21,489,282 1,928,672 3,627,281 1,176,274 28,221,509 Total Liabilities, Deferred Inflows and Fund Balances $ 23,408,576 $ 2,012,959 $ 3,627,281 $ 1,176,274 $ 30,225,090 Fund Balances - Total Governmental Funds (above) $ 28,221,509 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. (Net of Accumulated Depreciation) 40,391,518 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred or not reflected in the funds. 813,024 Long -tern liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. (15,101,680) Included in noncurrent liabilities is the recognition of the City's proportionate share of the net pension liability required by GASB 68 in the amount of $10,028,352, a Deferred Outflow of Resources in the amount of $1,651,067, and a Deferred Inflow of Resources in the amount of $2,650,876. This amounted to a decrease in Net Position of $11,028,161. (11,028,161) Included in noncurrent liabilities is the recognition of the City's proportionate share of the net OPER liability required by GASB 75 in the amount of $2,869,843, a Deferred Outflow of Resources in the amount of $456,770, and a Deferred Inflow of Resources in the amount of $215,485. This amounted to a decrease in Net Position of $2,628,558. (2,628,558) Net Position of Governmental Activities $ 40,667,652 The accompanying notes to the financial statements are an integral part of this statement. 16 CITY OF PARIS, TEXAS Statement 4 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended September 30, 2021 The accompanying notes to the financial statements are an integral part of this statement. 17 Total Nonmajor Total Debt Capital Governmental Governmental General Service Projects Funds Funds Revenues Taxes Property $ 7,971,838 $ 1,541,384 $ - $ - $ 9,513222 Sales 9,196,157 - - - 9,196,157 Franchise 4,253,182 - - - 4,253,182 Hotel Occupancy 881,259 265,041 - 46,573 1,192,873 Licenses and Permits 211,668 - - - 211,668 Fines and Fees 615,721 - - 48,152 663,873 Use of Money and Property 198,965 4,777 7,144 1,398 212,284 Sanitation 1,470,237 - - - 1,470,237 Health 4,806,996 - - - 4,806,996 Intergovernmental 706,574 - - - 706,574 Other 442,020 - 18,000 64,566 524,586 Total Revenues 30,754,617 1,811,202 25,144 160,689 32,751,652 Expenditures Current General Government 1,613,946 - - 45,318 1,659,264 Public Safety 11,367,228 - - 6,911 11,374,139 Public Works 4,991,668 - - - 4,991,668 Health 5,199,358 - - 1,470 5,200,828 Culture and Recreation 677,612 - - 1,879 679,491 Cox Field 242,809 - - - 242,809 Other 1,838,073 - - - 1,838,073 Debt Service Principal 158,073 3,157,193 - - 3,315,266 Interest 28,617 360,552 - - 389,169 Capital Outlay General Government 252,387 - 61,540 - 313,927 Public Safety 870,874 - - 35,390 906,264 Public Works 941,371 - 172,505 - 1,113,876 Health 216,631 - - - 216,631 Cox Field 65,000 - - - 65,000 Total Expenditures 28,463,647 3,517,745 234,045 90,968 32,306,405 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,290,970 (1,706,543) (208,901) 69,721 445,247 The accompanying notes to the financial statements are an integral part of this statement. 17 CITY OF PARIS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended September 30, 2021 Other Financing Sources (Uses) GO Refunding Bonds Issued GO Refunding Bonds Issue Costs Tax Notes Issued Tax Notes Issue Costs Proceeds from Sale of Capital Assets Transfers In Transfers Out Total Other Financing Sources (Uses) Net Changes in Fund Balances Fund Balances - Beginning Prior Period Adjustment Fund Balances - Ending Debt Capital General Service Projects Statement 4 (Continued) Total Nonmajor Total Governmental Governmental Funds Funds - 1,765,000 - - 1,765,000 - (45,492) - - (45,492) - 1,115,000 - - 1,115,000 - (36,500) - - (36,500) 151,266 - - - 151,266 2,751,240 148,844 - 458,248 3,358,332 (802,211) (1,078,500) - (1,655,072) _ (3,535,783) 2,100,295 1,868,352 - (1,196,824) 2,771,823 4,391,265 161,809 (208,901) (1,127,103) 3,217,070 17,150,077 1,766,863 3,836,182 2,303,377 25,056,499 (52,060) - - - (52,060) $ 21,489,282 $ 1,928,672 $ 3,627,281 $ 1,176,274 $ 28,221,509 The accompanying notes to the financial statements are an integral part of this statement. 18 CITY OF PARIS, TEXAS Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended September 30, 2021 Amounts reported for governmental activities in the statement of activities (Statement 2) are different because: Net Change in Fund Balances - Total Governmental Funds (Statement 4) Governmental funds reported capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to decrease net assets. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in governmental funds. Accrued interest expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. The net change in inventory is a direct adjustment to fund balance in the funds. Pension expenses are not reported as expenditures in governmental funds and contributions after the measurement date are deferred. OPEB expenses are not reported as expenditures in governmental funds and contributions after the measurement date are deferred. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Change in net position of governmental activities (Statement 2). The accompanying notes to the financial statements are an integral part of this statement. 119 Statement 5 3,217,070 (641,661) (93,924) 48,171 25,828 (44,360) 913,949 (112,713) 360,792 3,673,152 CITY OF PARIS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Year Ended September 30, 2021 REVENUES Property Taxes Sales Taxes Franchise Taxes Hotel Occupancy Taxes Licenses and Permits Fines and Fees Investment Earnings Sanitation Health Intergovernmental Revenues Other Total Revenues EXPENDITURES General Government Council Manager Attorney Municipal Court Clerk Finance Total General Government Public Safety Police Fire Total Public Safety Public Works Community Development Engineering Public Works Parks and Recreation Sanitation Streets and Highways Traffic and Public Lighting Garage Total Public Works Budgeted Amounts Original Final $ 7,689,000 7,363,000 4,238,100 675,000 193,950 434,500 350,510 1,474,250 2,874,000 1,252,802 194,550 26,739,662 180,250 388,961 350,106 236,171 152,255 450,421 1,758,164 6,981,635 5,317,088 12,298,723 1,470,920 413,554 223,673 1,205,650 1,165,350 1,519,574 497,353 360,021 6,856,095 Actual Statement 6 Variance with Final Budget $ 7,689,000 $ 7,971,838 $ 282,838 7,363,000 9,196,157 1,833,157 4,238,100 4,253,182 15,082 675,000 881,259 206,259 193,950 211,668 17,718 434,500 615,721 181,221 350,510 198,965 (151,545) 1,474,250 1,470,237 (4,013) 2,874,000 4,806,996 1,932,996 1,252,802 706,574 (546,228) 194,550 442,020 247,470 26,739,662 210,250 388,961 350,106 236,171 152,255 450,421 1,788,164 6,581,635 5,232,088 11,813,723 1,295,920 413,554 238,673 1,080,650 1,165,350 1,519,574 497,353 360,021 6,571,095 The accompanying notes to the financial statements are an integral part of this statement. 30,754,617 303,662 391,211 375,252 225,552 149,776 420,880 1,866,333 6,885,517 5,539,275 12,424,792 610,778 365,211 238,731 1,233,703 1,158,445 1,459,577 511,325 355,269 5,933,039 4,014,955 (93,412) (2,250) (25,146) 10,619 2,479 29,541 (78,169) (303,882) (307,187) (611,069) 685,142 48,343 (58) (153,053) 6,905 59,997 (13,972) 4,752 638,056 The accompanying notes to the financial statements are an integral part of this statement. 21 CITY OF PARIS, TEXAS Statement 6 Statement of Revenues, Expenditures, and Changes in Fund Balance (Continued) Budget and Actual General Fund Year Ended September 30, 2021 Budgeted Amounts Variance with Original Final Actual Final Budget EXPENDITURES (Continued) Health 3,045,929 3,415,929 5,415,989 (2,000,060) Culture and Recreation Paris Band 23,050 23,050 17,456 5,594 Library Services 727,331 727,331 660,156 67,175 Total Culture and Recreation 750,381 750,381 677,612 72,769 Other Cox Field Airport 323,850 368,850 307,809 61,041 Other 1,700,670 2,025,670 1,838,073 187,597 Total Other 2,024,520 2,394,520 2,145,882 248,638 Total Expenditures 26,733,812 26,733,812 28,463,647 (1,729,835) Excess (Deficiency) of Revenues Over Expenditures 5,850 5,850 2,290,970 2,285,120 Other Financing Sources (Uses) Transfers In - - 2,751,240 2,751,240 Transfers Out - - (802,211) (802,211) Proceeds from Sale of Assets - - 151,266 151,266 Total Other Financing Sources (Uses) - - 2,100,295 2,100,295 Net Changes in Fund Balance 5,850 5,850 4,391,265 4,385,415 Fund Balance - Beginning 17,150,077 17,150,077 17,150,077 - Prior Period Adjustment - - (52,060) (52,060) Fund Balance - Ending $ 17,155,927 $ 17,155,927 $ 21,489,282 $ 4,333,355 The accompanying notes to the financial statements are an integral part of this statement. 21 CITY OF PARIS, TEXAS Statement of Net Position Proprietary Funds September 30, 2021 ASSETS Current Assets Cash and Cash Equivalents Restricted Cash and Cash Equivalents Total Cash and Cash Equivalents Accounts Receivable, Net Accrued Interest Receivable Inventories Total Current Assets Noncurrent Assets Investments Construction Reserve and Contingency Unrestricted Total Investments Water Rights (Net of Accumulated Amortization) Capital Assets Land Construction in Progress Plant, Pumps, and Motors Distribution System Collection System Maintenance Equipment and Vehicles Furniture and Equipment Less Accumulated Depreciation Total Capital Assets (Net of Accumulated Depreciation) Net Pension Asset Total Noncurrent Assets Total Assets DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows of Resources - Asset Retirement Obligation Deferred Outflows of Resources - Pensions Deferred Outflows of Resources - OPEB Total Deferred Outflows The accompanying notes to the financial statements are an integral part of this statement. 22 Statement 7 Water and Sewer Enterprise Fund $ 8,415,336 9,848,928 18,264,264 2,743,463 32,709 356,270 21,396,706 39,065,965 2,934,620 3,543,244 45,543,829 3,206,922 339,620 37,188,254 32,280,368 47,011,375 28,300,115 4,560,328 2,054,372 87,087,446 64,646,986 208,823 113,606,560 135,003,266 2,804,300 163,384 47,281 3,014,965 CITY OF PARIS, TEXAS Statement 7 Statement of Net Position (Continued) Proprietary Funds September 30, 2021 Water and Sewer Enterprise Fund LIABILITIES Current Liabilities Accounts Payable and Accrued Liabilities 472,274 Accrued Interest Payable 922,743 Customers' Deposits 1,046,359 Bonds Payable - Current Portion 2,345,000 Accrued Compensated Absences - Current Portion 22,277 Unearned Revenue 3,078,369 Total Current Liabilities 7,887,022 Noncurrent Liabilities Bonds Payable - Noncurrent Portion 37,343,006 Tax Notes Payable - Noncurrent Portion 43,855,000 Accrued Compensated Absences - Noncurrent Portion 200,496 Asset Retirement Obligation 2,901,000 Net OPEB Liabilities 227,415 Total Noncurrent Liabilities 84,526,917 Total Liabilities 92,413,939 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 378,487 Deferred Inflows Related to OPEB 13,602 Total Deferred Inflows 392,089 NET POSITION Net Investment in Capital Assets 33,410,030 Unrestricted 11,802,173 Total Net Position S 45,212,203 The accompanying notes to the financial statements are an integral part of this statement. 23 CITY OF PARIS, TEXAS Statement 8 Statement of Revenues, Expenses, and Changes in Fund Net Position 3,023,205 Proprietary Funds 1,270,174 Year Ended September 30, 2021 3,607,507 Maintenance Water and Sewer Sundry Charges Enterprise Fund Operating Revenues 20,478 Charges for Sales and Services 695,425 Water Sales and Taps $ 8,616,650 Sewer Charges and Taps 7,194,829 Sanitation Billing Fees 64,117 Service Charges 183,085 Industrial Surcharges 73,154 Miscellaneous 435,693 Total Operating Revenues 16,567,528 Operating Expenses 1,471,194 Personnel 3,023,205 Supplies 1,270,174 Contractual 3,607,507 Maintenance 969,731 Sundry Charges 721,515 Bad Debt Expense 20,478 Other 695,425 Depreciation 2,910,029 Amortization of Water Rights 35,632 Amortization of Asset Retirement Obligation 96,700 Total Operating Expenses 13,350,396 Operating Income 3,217,132 Nonoperating Revenues (Expenses) Investment Earnings 181,241 Net Increase (Decrease) in the Fair Value of Investments (232,804) Gain/(Loss) on Sale of Capital Assets 19,321 Interest Expense (1,891,147) Net Nonoperating Revenues (Expenses) (1,923,389) Income Before Contributions, Other Revenue, and Transfers 1,293,743 Capital Contributions, Other Revenue, and Transfers Transfers In 306,693 Transfers Out (129,242) Total Capital Contributions, Other Revenue, and Transfers 177,451 Changes in Net Position 1,471,194 Total Net Position - Beginning 43,803,809 Prior Period Adjustment (62,800) Total Net Position - Beginning, as Restated 43,741,009 Total Net Position - Ending $ 45,212,203 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 9 Statement of Cash Flows Proprietary Funds Year Ended September 30, 2021 Water and Sewer Enterprise Fund Cash Flows from Operating Activities Receipts from Customers and Users $ 16,278,467 Other Receipts 3,078,369 Payments to Suppliers, Contractors, and Service Providers (7,303,474) Payments to Employees for Salaries and Benefits (3,194,080) Net Cash Provided by Operating Activities 8,859,282 Cash Flows from Noncapital Financing Activities Transfers In 306,693 Transfers Out (129,242) Net Cash Provided (Used) by Noncapital Financing Activities 177,451 Cash Flows from Capital and Related Financing Activities Proceeds Received from Sale of Capital Assets 19,321 Acquisition and Construction of Capital Assets (3,878,537) Proceeds from Long -Term Debt 46,280,887 Principal Paid on Capital Debt (2,300,000) Interest Paid on Capital Debt (1,540,032) Net Cash (Used) by Capital and Related Financing Activities 38,581,639 Cash Flows from Investing Activities Interest on Investments 152,498 Purchases of Investment Securities (42,131,208) Maturities of Investments 1,888,279 Net Cash (Used) by Investing Activities (40,090,431) Net Increase in Cash and Cash Equivalents 7,527,941 Cash and Cash Equivalents - Beginning 10,736,323 Cash and Cash Equivalents - Ending $ 18,264,264 The accompanying notes to the financial statements are an integral part of this statement. W CITY OF PARIS, TEXAS Statement 9 Statement of Cash Flows (Continued) Proprietary Funds Year Ended September 30, 2021 Water and Sewer Enterprise Fund Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income S 3,217,132 Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities Depreciation 2,910,029 Amortization of Water Rights 35,632 Amortization of Asset Retirement Obligation 96,700 Decrease (Increase) in Accounts Receivable (284,056) Decrease (Increase) in Inventory (99,083) Decrease (Increase) in Net Pension Asset (208,823) Decrease (Increase) in Deferred Outflows of Resources (2,908,744) Increase (Decrease) in Accounts Payable and Accrued Liabilities 75,708 Increase (Decrease) in Customers' Deposits 15,473 Increase (Decrease) in Unearned Revenue 3,078,369 Increase (Decrease) in Accrued Compensated Absences 11,730 Increase (Decrease) in Asset Retirement Obligation 2,901,000 Increase (Decrease) in Net Pension Liabilities (4,054) Increase (Decrease) in Net OPER Liabilities 33,779 Increase (Decrease) in Deferred Inflows of Resources (11,510) Total Adjustments 5,642,150 Net Cash Provided by Operating Activities $ 8,859,282 The accompanying notes to the financial statements are an integral part of this statement. 26 CITY OF PARIS, TEXAS Notes to Financial Statements September 30, 2021 I. Summary of Significant Accounting Policies A. Description of Government -Wide Financial Statements The government -wide financial statements (e.g., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and it's component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business - type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. B. Reporting Entity The City of Paris, Texas (the City), operates under a council-manager form of government with the mayor and six council members being elected. The accompanying financial statements present the government and its component unit. The discretely presented component unit is reported in a separate column in the government - wide financial statements (see note below for a description) to emphasize that it is legally separate from the government. Discretely Presented Component Unit: The Paris Economic Development Corporation (PEDC) is a governmental nonprofit corporation established July 19, 1993, funded by a quarter percent sales tax. PEDC was organized exclusively for the purpose of benefiting and accomplishing public purposes of the City by promoting, assisting, and enhancing economic development activities for the City as provided by the Development Corporation Act of 1979. The business and affairs are managed by a five -member board of directors appointed by the governing body of the City. PEDC is fiscally dependent upon the City as the City Council approves their budgets and must approve any debt issuance. However, the component unit does not qualify for blending because the component services directly benefit the community rather than the City itself. Complete financial statements for PEDC may be obtained at its administrative office at 1125 Bonham Street, Paris, Texas 75460. C. Basis of Presentation - Government -Wide Financial Statements While separate government -wide and fund financial statements are presented, they are interrelated. The governmental column incorporates data from governmental funds while business -type activities incorporate data from the government's enterprise funds. Separate financial statements are provided for governmental funds and proprietary funds. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. As discussed earlier, the government has one discretely presented component unit, PEDC. PEDC is shown in a separate column in the government -wide financial statements. D. Basis of Presentation — Fund Financial Statements The fund financial statements provide information about the government's funds, including its discretely presented component unit. Separate statements for each fund category — governmental and proprietary — are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. 27 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. SummM of Significant Accounting Policies (Continued) D. Basis of Presentation — Fund Financial Statements (Continued) The City reports the following major governmental funds: The General Fund is the primary operating fund of the City. It accounts for and reports all financial resources not accounted for in another fund. The Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for principal and interest. The Capital Projects Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for capital outlay. The City reports nonmajor funds as Other Governmental Funds which include Special Revenue Funds and a Permanent Fund as follows: The Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specific purposes other than for debt service or capital projects. The Permanent Fund is used to account for and report resources that are restricted to the extent that only earnings and not principal may be used. The City reports the following enterprise funds as one major fund: The Water Fund accounts for the water distribution system as well as the billings and collections for that service. The Sewer Fund accounts for the sewer system as well as the collection activities for that service. During the course of operations, the City has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government -wide financial statements. Balances between the funds included in governmental activities (e.g., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business -type activities (e.g., the enterprise fund) are eliminated so that only the net amount is included as internal balances in the business -type activities column. Interf ind services provided and used are not eliminated in the process of consolidation Further, certain activity occurs during the year involving transfers of resources between funds. In the fund financial statements, these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government -wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business -type activities are eliminated so that only the net amount is included as transfers in the business -type activities column. 28 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Sianificant Accounting Policies (Continued) E. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self -balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance -related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, franchise taxes, licenses, interest, and special assessments are susceptible to accrual. Sales taxes are recognized as revenue in the period when the exchange transaction on which the tax is imposed occurs. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure -driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The proprietary funds are accounted for using the economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The proprietary fund is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the governing body has decided that the determination of revenues earned, costs incurred, and/or net income is necessary for management accountability. F. Budgetary Information Budgetary Basis of Accounting Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects fund, proprietary funds, and library trust fund. The budget for the capital projects fund is legally adopted for specific projects and may exceed one year. Formal budgetary integration is not employed for the proprietary funds. The City adopts an annual, informal budget as a financial plan for all proprietary funds. The library trust fund includes nornbudgeted 29 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Significant Accounting Policies (Continued) F. Budgetary Information (Continued) 1. Budgetary Basis of Accounting (Continued) financial activities, which are not subject to an appropriated budget and the appropriation process or to any legally authorized nonappropriated budget review and approval process. The community development block grant fund is not annually appropriated. The City has no special revenue funds which are reported as major funds. At the close of each fiscal year, any unencumbered appropriation balance (appropriations including prior year encumbrances less current year expenditures and encumbrances) lapse or revert to the undesignated fund balance. At least thirty days prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget, which represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing them. Public hearings are conducted at which all interested persons' comments concerning the budget are heard. The budget for the next fiscal year is legally enacted by the City Council through passage of an ordinance not later than the twenty-seventh day of the last month of the fiscal year. If the City Council does not enact the budget within this time period, then the budget as submitted by the City Manager becomes the legally authorized budget. 2. Excess of Expenditures Over Appropriations For the year ended September 30, 2021, expenditures may not legally exceed appropriations at the department level for each legally adopted annual operating budget. The City Manager may, without Council approval, transfer appropriation balances from one expenditure account to another within a department or agency of the City. The City Council, however, must approve any transfer or unencumbered appropriation balances or portions thereof from one department or agency to another. During the year ended September 30, 2021, the City Council approved a transfer of $785,000 from various departments to other departmental line items. Expenditures exceeded appropriations in the following departments: Council $93,412, Manager $2,250, Attorney $25,146, Police $303,882, Fire $307,187, Public Works $58, Parks and Recreation $153,053, Traffic and Public Lighting $13,972, Health $2,000,060. G. Assets, Liabilities, and Equity I. Cash and Cash Equivalents For purposes of the statement of cash flows, cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from date of acquisition. 2. Investments Investments are reported in the accompanying balance sheet at fair value with changes in fair value being reported as part of investment income. PEDC holds investments in two external investment pools, Texas Class and Lone Star Investments. Both investment pools carry investments at amortized cost, which 30 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) 2. Investments (Continued) approximates fair value. Investments are priced daily and compared to the carrying value. If the ratio of the fair value of the portfolio of investments to the carrying value of investments is less than .995 or greater than 1.005, the investment pools will sell investment securities, as required, to maintain the ratio at a point between .995 and 1.005. Participation in external investment pools was voluntary. Statutes authorize the City and PEDC to invest in obligations of the U. S. Treasury, direct obligations of the State of Texas, other obligations guaranteed or insured by the State of Texas or the United States, obligations of states and political subdivisions of any state meeting certain rating requirements, certificates of deposit, and fully collateralized direct repurchase agreements having a defined termination date. The City did not engage in repurchase or reverse repurchase agreement transactions during the current year. In accordance with generally accepted accounting principles, inputs to valuation techniques used to measure fair value are prioritized according to a fair value hierarchy, as follows: Level I — Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 11 — Fair values are based on generally indirect information such as quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active. Level III — Fair values are based on inputs other than quoted prices included within Level I that are unobservable and include the City's own assumptions about pricing. This fair value hierarchy gives the highest priority to Level I inputs and the lowest priority to Level III inputs. The City's investments are classified in Level It of the hierarchy. 3. Inventories Inventories are valued at cost using the first -in, first -out method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. An equivalent amount is reported as nonspendable fund balance in the governmental funds. 4. Restricted Assets Prior to the issuance of General Obligation Refunding Bonds, Series 2010, the City's Water and Sewer Revenue Bonds and Certificates of Obligation covenants required certain restrictions of net assets. After the refunding occurred, these legal restrictions no longer existed. In order to safeguard the financial integrity of the water and sewer system, the City Council approved a resolution establishing and maintaining funds comparable to those required by the refunded bonds. 5. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. 31 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) 5. Capital Assets (Continued) Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value at the date of donation. Infrastructure acquired prior to the implementation of GASB 34 are included in the financial statements. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as an expense during the period incurred. Property, plant, and equipment of the primary government, as well as the component unit is depreciated using the straight-line method over the following estimated useful lives: Buildings and Improvements 20-40 years Furniture, Fixtures, and Equipment 5-10 years Vehicles 5 years Works of Art 50 years Public Domain Infrastructure 25-45 years System Infrastructure 25-30 years 6. Capital Leases Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the useful lives of the assets and is included in depreciation expense. 7. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred outflow of resources related to pensions and OPEB. See footnote IV. F. for further information. The City also reports a deferred outflow of resources related to an asset retirement obligation. See footnote IV. O. for further information. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has a deferred inflow of resources related to pensions and OPEB. See IVY. for further information. In addition, the government has one type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes, EMS, municipal court, and street assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amount becomes available. 32 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 I. Summary of Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) 8. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary funds financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. 9. Fund Balance Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 10. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority. The governing council is the highest level of decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation. The City does not have any restricted fund balances by enabling legislation. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The council allows the finance director to assign the fund balance, and may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. 33 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 1. Summa of Significant Accounting Policies (Continued) H. Revenues and Expenditures/ Expenses 1. Program Revenues Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 2. Property Taxes The City's property taxes are levied on October I and are due no later than January 31 of the following year. Taxes become delinquent February 1, after which time penalties and interest and, if not paid by July, attorney's collection fees are added. A tax lien attaches to property (real and personal) on January I of each year to secure the payment of all taxes, penalties, and interest ultimately imposed on the property. The lien is effective until all such amounts are paid. 3. Compensated Absences Vacation and sick leave benefits are accumulated by City employees in accordance with guidelines suggested in the City's personnel policies. 4. Proprietary Funds Operating and Nonoperating Revenues and Expenses Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water and sewer enterprise fund are charges to customers for sales and services. The water and sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and service, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 1. Future Adoption of Accounting Pronouncements The GASB has issued the following potentially significant statements which the City has not yet adopted, and which require adoption subsequent to September 30, 2021. Statement No. 87 Leases 91 Conduit Debt Obligations 96 Subscription -Based Information Technology Arrangements 34 Adoption Required September 30, 2022 September 30, 2023 September 30, 2023 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 11. Reconciliation of Government -Wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government - Wide Statement of Net Position The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government -wide statement of net position. One element of that reconciliation explains that "capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds." The details of this $40,391,518 are as follows: Land Construction in Progress Buildings Less: Accumulated Depreciation — Buildings Improvements Other Than Buildings Less: Accumulated Depreciation — Improvements Other Than Buildings Machinery and Equipment Less: Accumulated Depreciation — Machinery and Equipment Infrastructure Less: Accumulated Depreciation — Infrastructure Net Adjustment to Increase Fund Balance — Total Governmental Funds to Arrive at Net Position — Governmental Activities $ 5,950,108 263,364 20,556,584 (10,508,552) 6,601,672 (4,237,927) 23,102,816 (18,494,309) 52,733,342 (35,575,580 Another element of that reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds." The details of this $15,101,680 difference are as follows: Bonds Payable S 11,830,000 Plus: Premiums on Bonds Payable (to be Amortized Over the Life of the Debt) 110,136 Tax Notes Payable 955,000 Capital Lease 792,453 Accrued Interest 101,226 Compensated Absences 1,162,865 Landfill Post -Closure Care Costs 150M0 Net Adjustment to Reduce Fund Balance — Total Governmental Funds to Arrive at Net Position — Governmental Activities S 15.101.68Q B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation "plains that "governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $(641,661) difference are as follows: 35 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 II. Reconciliation of Government -Wide and Fund Financial Statements (Continued) B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities (Continued) Capital Outlay $ 2,206,683 Depreciation Expense (2,848,344) Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position Of Governmental Activities L=j§QAkU Another element of that reconciliation states that "the net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net position." The details of this $93,924 difference are as follows: In the statement of activites, only the gain on the sale of assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold. $ (118,924) Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental fund because they are not financial resources. 25,000 Total Governmental Funds to Arrive at Changes in Net Position of Governmental Activities $ (93,924) Another element of that reconciliation states that "the issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities." The details of this $360,792 difference are as follows: Issuance of Debt $ (2,880,000) Amortization of Premium 12,719 Principal Repayments 3,228,073 Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position 01) of Governmental Activities $ 360,M Ill. Stewardshi12, Compliance, and Accountability Violations of Legal or Contractual Provisions Note I.F.2, on the Excess of Expenditures Over Appropriations, describes budgetary violations that occurred for the year ended September 30, 2021. CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds A. Cash and Cash Equivalents Custodial Credit Risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. The City's policy requires deposits to be secured by collateral valued at market or par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation (FDIC) insurance. Collateral agreements must be approved prior to deposit of funds as provided by law. At September 30, 2021, the City had deposits with a carrying amount of $34,660,384, and the bank's balances were $36,299,426. The City was not exposed to custodial credit risk since deposits are insured or collateralized with securities held by the pledging financial institution's agent in the name of the City. B. Investments As of September 30, 2021, the City had the following investments: Weighted Weighted Average Average Credit Maturity Maturity Type of Security Fair Value Rating (Years) (Days) Primary Government Federal Home Loan Mortgage Corporation $ 594,828 AA+ 6.92 Federal National Mortgage Association 3,112,419 AA+ 5.83 Certificates of Deposit 97,962 Not Rated .58 U.S. Treasury Bills OID 10,999,310 .23 U.S. Treasury Notes 39,066,289 1.81 Paris Economic Development Corporation Texas Class Investment Pool 2,114,248 AAAm 89 Totals $ 552985,056 The City invested in the Texas Local Government Investment Cooperative (LOGIC) Liquid Asset Portfolio. LOGIC is a public funds investment pool managed by Southwest Securities Group, Inc. LOGIC uses amortized cost rather than market value to report net position to compute share prices. Accordingly, fair value of the position of LOGIC is the same as the net asset value of LOGIC shares. LOGIC issues an annual report that can be obtained upon request. The accounts remain open at September 30, 2021. However, the City had a zero balance at year end. The City invested in Texas Cooperative Liquid Assets Security System (Texas CLASS) Trust. Texas CLASS was created as an investment pool for its participants pursuant to Section 2256.016 of the Public Funds Investment Act, Texas Government Code, or other laws of the State of Texas governing the investment of funds of a participant or funds under its control. Texas CLASS is administered by Cutwater Investor Services Corp. with Wells Fargo Bank Texas, NA as the Custodian. Texas CLASS is supervised by a Board of Trustees who are elected by the participants. Texas CLASS uses amortized cost rather than market value to report net position to compute share prices. Accordingly, the fair value of the position in Texas CLASS is the same as the net asset value of Texas CLASS shares. Texas CLASS issues a publicly available annual report that can be obtained at www.texasclass.com. Interest rate risk is the policy of the City to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the entity and conforming to all state and local statutes governing the investment of public funds. The City's investment portfolio is designed with the objective of attaining an acceptable rate of return throughout budgetary and economic cycles and commensurate with the City's investment risk constraints and the cash flow characteristics 37 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) B. Investments (Continued) of the portfolio. The City's investment strategy is active. Given this strategy, the basis used by the Finance Director to determine whether market yields are being achieved shall be the Average Fed Funds rate. No other formal policy related to interest rate risk is included in the City's adopted investment policy. Credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment. This type of risk is typically expressed in terms of the credit ratings issued by a nationally recognized statistical rating organization. The City and PEDC reduce the risk of issuer default by limiting investments to those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas Government Code. Concentration credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. With the exception of obligations of the United States or its agencies and authorized pools, no more than 50% of the City's total investment portfolio will be invested in a single financial institution with the exception of its local depository. PEDC's investment balance consists of only externally pooled accounts. The custodial credit risk for investments is the risk that, in the event of failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. In accordance with the City's deposit and investment policy, all deposits placed at a financial institution shall be insured or collateralized with applicable State law. Foreign currency risk is the risk that an investment denominated in the currency of a foreign country could reduce in value as a result of changes in currency exchange rates. At September 30, 2021, the City was not exposed to foreign currency risk. C. Accounts Receivable and Payable Amounts are aggregated into a single accounts receivable (net of allowance for uncollectibles) line for certain funds and aggregated columns. Below is the detail of receivables in the aggregate, including the applicable allowances for uncollectible accounts: 38 Nonmajor Governmental Debt Service General Receivables: $ - $ 32,709 Interest $ 55 Property Taxes 1,170,441 Sales Tax 1,553,607 Franchise 551,425 Accounts 202,111 Street Assessments 26,473 Fines 2,373,924 EMS 3,506,355 Gross Receivables 9,384,391 Less: Allowance for Uncollectibles _4( ,643,279) Net Total Receivables $$ 4,741,112 38 Nonmajor Governmental Debt Service Funds Enterprise $ - $ - $ 32,709 135,203 - - - 916 2,902,585 135,203 916 2,935,294 (33,801) - (159,122) $$ 1fl1,402 $ 916 $ 2,776,172 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) C. Accounts Receivable and Payable (Continued) Net receivable balances not expected to be collected within one year are Property Taxes - $708,496, Fines - $48,133, EMS - $419,523, and Street Assessments - $26,473. At year end, PEDC had a receivable for sales tax of $310,796. The balance is expected to be collected within one year. Accounts payable at September 30, 2021, were as follows: Accounts Wages Totals Governmental Activities General Fund $ 636,079 $ 554,479 $ 1,190,558 Total — Governmental Activities $ 636,079 $ 554,479$ 1,190,558_ Business -Type Activities Water and Sewer Fund $ 365,229 $ 107,045 $ 472,274 Total — Business Type Activities $ 365,229 $ 107,045 $ 472,274 39 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) D. Capital Assets Capital assets activity for the year ended September 30, 2021, follows: 8,632,726 1,096,507 Balance Balance 10,028,641 9/30/20 Additions Retirements 9/30/21 Governmental Activities 3,937,205 300,722 Capital Assets, Not Being Depreciated 4,237,927 18,532,486 Land $ 5,950,108 $ - $ - $ 5,950,108 Construction in Progress 6,664,407 258,089 6,659,132 263,364 Total Capital Assets, 66,945,607 2,848,344 Not Being Depreciated 12,614,515 258,089 6,659,132 6,213,472 Capital Assets, Being Depreciated Buildings Improvements Other Than Buildings Machinery and Equipment Infastructure Total Capital Assets, Being Depreciated Less Accumulated Depreciation for Buildings Improvements Other Than Buildings Machinery and Equipment Infrastructure Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities, Capital Assets, Net 20,525,627 30,957 6,601,672 - 22,317,003 1,882,320 46,013,893 6,719,449 20,556,584 - 6,601,672 1,096,507 23,102,816 52,733,342 95,458,195 8,632,726 1,096,507 102,994,414 10,028,641 479,911 - 10,508,552 3,937,205 300,722 - 4,237,927 18,532,486 939,406 977,583 18,494,309 34,447,275 1,128,305 - 35,575,580 66,945,607 2,848,344 977,583 68,816,368 28,512,588 5,784,382 118,924 34,178,046 $ 41,127,103 $ 6,042,471 $ 6,778,056 40 $40,391,518 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) D. Capital Assets (Continued) 41 Balance Balance 9/30/20 Additions Retirements 9/30/21 Business -Type Activities Capital Assets, Not Being Depreciated Land $ 339,620 $ - $ - $ 339,620 Construction in Progress 33,953,797 3,234,457 - 37,188,254 Total Capital Assets, Not Being Depreciated 34,293,417 3,234,457 - 37,527,874 Capital Assets, Being Depreciated Plant, Pumps, and Motors 32,127,793 152,575 - 32,280,368 Distribution System 47,011,375 - - 47,011,375 Collection System 28,300,115 - - 28,300,115 Maintenance Equipment and Vehicles 4,421,499 491,505 352,676 4,560,328 Furniture and Equipment 2,054,372 - 2,054,372 Total Capital Assets, Being Depreciated 113,915,154 644,080 352,676 114,206,558 Less Accumulated Depreciation for Plant, Pumps, and Motors 26,385,521 650,877 - 27,036,398 Distribution System 31,596,141 1,417,771 33,013,912 Collection System 21,186,961 560,157 - 21,747,118 Maintenance Equipment and Vehicles 3,741,887 221,382 352,676 3,610,593 Furniture and Equipment 1,619,583 59,842 - 1,679,425 Total Accumulated Depreciation 84,530,093 2,910,029 352,676 87,087,446 Total Capital Assets, Being Depreciated, Net 29,385,061 (2,265,949) - 27,119,112 Business -Type Activities, Capital Assets, Net 63,678,478 968,508 - 64,646,986 Intangible Asset — Water Rights 4,113,119 - - 4,113,119 Less Accumulated Amortization 870,565 35,632 - 906,197 Total Intangible Asset - Water Rights, Net 3,242,554 (35,632) - 3,206,922 Business -Type Activities, Capital and Intangible Assets, Net $66,921,032 $ 932,876 $ $67,853,908 41 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) D. Capital Assets (Continued) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities General Government $ 115,512 Public Safety 671,392 Public Works, Including Depreciation of General Infrastructure Assets 1,596,215 Health 212,787 Culture and Recreation 120,598 Cox Field Airport 131,840 Total Depreciation Expense — Governmental Activities S 2,848,3444. Business -Type Activities Water and Sewer $ 2.910,029 Total Depreciation Expense — Business -Type Activities $ 2.910.029 E. Deferred Compensation Plan The City offers its employees two deferred compensation plans created in accordance with Internal Revenue Code Section 457. F. Employee Retirement Systems and Plans The City maintains a nontraditional defined benefit retirement plan for all full-time employees except for firefighters and a single -employer, defined benefit plan for firefighters. 1. Texas Municipal Retirement System Plan Description The City of Paris participates as one of 895 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple -employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six -member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension pian is a tax -qualified plan under Section 401 (a) of the Internal Revenue Code. The plan financial statements are prepared using the accrual basis of accounting. TMRS issues a publicly available annual comprehensive financial report (ACFR) that can be obtained at www.imrs.com. All eligible employees of the city are required to participate in TMRS. 42 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the employee's retirement benefits are calculated based the sum of the employee's contributions, with interest, and the city -financed monetary credits, with interest. Employees may choose to receive their retirement benefit in one of seven payments options. Employees may also choose to receive a portion of their benefit as a lump sum distribution in an amount equal to 12, 24, or 36 monthly payments calculated using the retiree life only option, but this lump sum cannot exceed 75% of the member's contributions and interest. City -financed monetary credits are composed of three sources: prior service credits, current service credits, and updated service credits. Prior service credit is granted when joining TMRS. It includes a montearty credit equal to the accumulated value of the percentage of prior service credit selected by the City (from 10% to 1000/6), multipled by an employee's contributions that would have been made, based on the average salary prior to TMRS participation, for the number of months the employee was employed by that city before joining TMRS, accruing 3% annual interest and including the matching ratio adopted by the City. Current service credit is a monetary credit for service performed by an employee and is based on a percent (100%, 150%, or 200%) of the employee's total contributions and interest credits (commonly referred to as the City's Matching Ratio). The City designates the rate of their employee contributions (5%, 6%, or 7% of gross compensation) and interest is credited on contribution balances annually at a guaranteed minimum 5% rate. A change in the City's matching ratio is applied prospectively. Updated service credit is an optional monetary credit that the City may grant annually or on an ad hoc or repeating basis, and it may increase an employee's monthly retirement benefit. In calculating the updated service credit, TMRS looks at the changes in the employee's salary over their career and any changes the City has made to its TMRS plan, such as the employee contribution rate or the City's matching ratio. Although the updated service credit may increase the employee's retirement benefit, the updated service credit does not affect the amount of contributions in an employee's account or the amount an employee will receive if they refund. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. Plan provisions for the City were as follows: Plan Year 2020 Employee Deposits Rate 6% Matching Ratio (City to Employee) 2 to 1 A Member is Vested After 5 Years Service Retirement Eligibility (Expressed As Age/Years of Service) 60/5,0/20 Updated Service Credit 0% Annuity Increase to (Retirees) 0% of CPI 43 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Employees Covered by Benefit Terms. At the December 31, 2020, valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 236 Inactive Employees Entitled to but not yet Receiving Benefits 157 Active employees 234 Total 627 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of an employee's gross earnings, and the City matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 6% of their annual gross earnings during the fiscal year. The contribution rates for the City were 7.18% and 6.78% in calendar years 2020 and 2021, respectively. The City's contributions to TMRS for the year ended September 30, 2021, were $809,036 and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability was measured as of December 31, 2020, and the Total Pension Liability (TFL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumpfions The Total Pension Liability in the December 31, 2020, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 3.5% to 11.5%, including inflation Investment Rate of Return 6.75% 44 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Actuarial Assumptions (Continued) Salary increases were based on a service -related table. For calculating the actuarial liability and the retirement contribution rates, the gender -distinct 2019 Municipal Retirees of Texas mortality tables are used. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements. Based on the size of the city, rates are multipled by an additional factor of 100%. For disabled annuitants, the mortality tables for healthy retirees are used with a 4 -year set -forward for males and a 3 -year set -forward for females. In addition, a 3.5% and 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements subject to the floor. The actuarial assumptions were developed from the actuarial investigation of the experience of TMRS over the four year period from December 31, 2014 to December 31, 2018. They were adopted in 2019 and first used in the December 31, 2019 valuation. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. 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 arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Global Equity Core Fixed Income Non -Core Fixed Income Real Return Real Estate Absolute Return Private Equity Total Taraet Allocation ER 30.0% 10.0 20.0 10.0 10.0 10.0 10.0 100.00/0 Long -Tenn Expected Real Rate of Return (Arithmetic) 5.30% 1.25 4.14 3.85 4.00 3.48 7.75 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Discount Rate A single discount rate of 6.75% was used to measure the Total Pension Liability as of December 31, 2020. This single discount rate was based on the expected rate of return on pension plan investments of 6.75%. Based on the stated assumptions and the projection of cash flows the city's fiduciary net position and future contributions were sufficient to finance the future benefit payments of current plan members for all projection years. 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 projection of cash flows used to determine the single discount rate for the city assumed that the funding policy adopted by the TMRS Board will remain in effect for all future years. Under this funding policy, the city will finance the unfunded actuarial accrued liability over the years remaining for the closed period existing for each base in addition to the employer portion of all future benefit accruals. Net Pension Liability and Changes in the Pension Liability Balance at 12/31/2019 Changes for the year: Service Cost Interest Change of Benefit Terms Difference Between Expected and Actual Experience Changes of Assumptions Contributions – Employer Contributions – Employee Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Administrative Expense Other Changes Net Changes Balance at 12/31/2020 Increase (Decrease) 852,067 712,034 4,972,797 (3,731,229) (3,731,229) (32,223) - (1,257) 1,475,391 2,772,189 $ 67,105,668 Sensitivity of the Net Pension Liability to Changes in the Discount Rate (852,067) (712,034) (4,972,797) 32,223 1,257 (1,296,798) S (1,272,101) The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension liability (asset) would have been if it were calculated using a discount rate that is I -percentage-point lower (5.75%) or I -percentage-point higher (7.75%) than the current rate: 46 Plan Net Pension Total Pension Fiduciary Liability Liability Net Position (Asset) - (a) (b) —(a) – (b) 65,630,277 $652605,580 $ 24,697 1,184,350 - 1,184,350 4,344,087 4,344,087 (321,817) (321,817) 852,067 712,034 4,972,797 (3,731,229) (3,731,229) (32,223) - (1,257) 1,475,391 2,772,189 $ 67,105,668 Sensitivity of the Net Pension Liability to Changes in the Discount Rate (852,067) (712,034) (4,972,797) 32,223 1,257 (1,296,798) S (1,272,101) The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension liability (asset) would have been if it were calculated using a discount rate that is I -percentage-point lower (5.75%) or I -percentage-point higher (7.75%) than the current rate: 46 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate (Continued) I% Decrease in Discount Rate 5.75% City's Net Pension Liability (Asset) $6,842,820 Pension Plan Fiduciary Net Position Discount Rate 6.75% $(1,272,101) 1% Increase in Discount Rate 7.75% $(8,051,758) Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued TMRS financial report. That report may be obtained on the Internet at wwwamrs. com.. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2021, the City recognized pension expense of $(513,056). At September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference Between Expected and Actual Economic Experience (Net of Current Year Amortization) Changes in Actuarial Assumptions Differences Between Projected and Actual Investment Earnings (Net of Current Year Amortization) Contributions Subsequent to the Measurement Date Total Deferred Outflows Deferred Inflows of Resources of Resources $ $ 366,155 48,455 - 1,856,729 600,218 - $ 600,218 $ 2,271L339 $600,218 reported as deferred outflows of resources, related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the year ending September 30, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2022 $ (931,772) 2023 (70,589) 2024 (1,160,094) 2025 (108,884) Thereafter $ (2,271,339) 47 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund Plan Description The Paris Firefighters' Relief and Retirement Fund, a single -employer defined benefit pension plan, is established under the authority of the Texas Local Firefighters' Retirement Act and is administered by a Board of Trustees made up of three members elected from and by the fund's members, two representatives of the City of Paris, Texas, and two citizen members. Specified plan provisions are governed by a plan document and a trust agreement executed by the Board of Trustees. The plan is an independent entity for financial reporting purposes and issues a stand-alone financial statement. A copy of the audited financial statement may be obtained from the Board of Trustees, Paris Firefighters' Relief and Retirement Fund, P.O. Box 9037, Paris, Texas 75461. Governing state law requires public retirement systems to hire an actuary to make a valuation at least once every three years of the assets and liabilities of the system and to determine if the assumptions and methods are reasonable. The plan financial statements are prepared using the accrual basis of accounting. All plan investments are reported at fair value. RUM The plan covers current and former firefighters of the City of Paris, Texas, as well as certain beneficiaries. The City of Paris contributes 14% of each member's total pay (including regular, longevity, and overtime pay but excluding lump sum distributions for unused sick leave or vacation). Fund members contribute to the plan at a rate of 16% of pay. Employee contributions are "picked up" by the City of Paris, Texas, as permitted under Section 414(h)(2) of the Internal Revenue Code. Fund members receive credit for service for the period during which they make contributions to the plan. The fund was established August 28, 1941, and was most recently amended effective August 31, 2019. Contributions The City's annual required contribution to the plan for fiscal year 2021 was based on a payroll of $3,009,497 and amounted to $421,330. Covered employees made contributions of $481,520. Employees Covered by Benefit Terms At the December 31, 2020, valuation date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 40 Inactive employees entitled to but not yet receiving benefits 8 Active employees 48 Total 96 48 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) Service Retirement Disability and Death Benefits A member is eligible for service retirement upon the earlier of (a) the completion of 20 years of service and attainment of age 55 or (b) the date as of which the sum of the member's age and service equals 80 provided the member has completed 20 years of service. A member who retires under the service retirement provisions of the fund will receive a monthly benefit equal to $94 multiplied by his/her years of service at retirement. The minimum service retirement benefit is $500 per month. Service retirement benefits are payable for the member's lifetime. In the event the member's death precedes that of his/her spouse, two-thirds of the member's pension will be continued to the spouse for his/her lifetime. In lieu of the normal form of benefit, a member may elect at the time of his/her retirement to receive a modified monthly amount payable under one of several optional forms of payment. An active member will qualify for a disability benefit if he/she becomes disabled for either physical or mental reasons. If a member dies while in active service, his/her widow(er) will receive an immediate monthly benefit, payable for his/her lifetime. Actuarial Methods and Assumptions The actuarial valuation date used to determine the total pension liability for the year ended September 30, 2021, and the most current available information required for disclosure under GASB Statement No. 67 is based on an actuarial valuation as of December 31, 2020. The actuarial cost method used in the December 31, 2020, valuation is the entry age service actuarial cost method. This method is also referred to as the entry age actuarial cost method under the terminology developed by the Joint Committee on Pension Terminology. There has been no change in the actuarial cost method since the last actuarial valuation. The assumed rate of return was developed using both the plan's historical rates of return and expected future rates of return. Rate of return experience studies have been performed in connection with the plan's valuations. The demographic assumptions were chosen based on expected future rates of retirement, mortality, disability, and termination. Mortality was taken from published studies and was updated to reflect expected future improvement. Retirement and salary increase rates were developed based on the plan's own experience. Disability and termination rates were based on published rates, adjusted as necessary, to conform to the plan's own experience. Both economic and demographic assumptions were further tested through the calculation of the plan's aggregate experience with respect to both demographic decrements and economic assumptions. 49 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) Net Pension Liability and Changes in the Pension Liability Balance at 12/31/2019 Changes for the year: Service Cost Interest Experience Change of Benefit Terms Difference Between Expected and Actual Experience Changes of Assumptions Contributions — Employer Contributions — Employee Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Administrative Expense Other Changes Net Changes Balance at 12/31/2020 Total Pension Liability (a) $ 15,392,226 263,769 1,098,206 125,175 Increase (Decrease) Plan Fiduciary Net Position (b) $ 4,497,794 388,839 444,388 482,463 (1,016,641) (1,016,641) (25,739) 470,509 273,310 $ 15,862,735 $ 4,771,104 Net Pension Liability (Asset) (a) — (b) $ 10,894,432 263,769 1,098,206 125,175 (388,839) (444,388) (482,463) 25,739 197,199 $ 11,091,631 The following presents the net pension liability of the Paris Firefighters' Relief and Retirement Fund, calculated using the discount rate of 7.25%, as well as what the City's net pension liability (asset) would be if it were calculated using a discount rate that is 1 -percentage -paint lower (6.25%) or 1 -percentage -point higher (8.25010) than the current rate: Net Pension Liability 1% Decrease in Discount Rate 6.25% $12,795,460 Pension Plan Fiduciary Net Position Discount Rate 7.25% $11,091,631 1% Increase in Discount Rate 8.25% $9,661,244 Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued financial report. That report may be obtained at 1444 N. Main Street, Paris, Texas 75460. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2021, the City recognized pension expense of $612,942. 50 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) At September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference Between Expected and Actual Economic Experience Changes in Actuarial Assumptions Difference Between Projected and Actual Investment Earnings Contributions Subsequent to the Measurement Date Total Deferred Outflows Deferred Inflows of Resources of Resources $ - $ 506,147 886,854 - - 251,877 327,379 1,214,233 $ 758,024 $327,379 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the year ending September 30, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2022 $ (48,586) 2023 48,105 2024 (81,760) 2025 (18,716) 2026 58,579 Thereafter 171,208 Total $ 128,830 G. Other Post Employment Benefit (OPEB) Obligations 1. Supplemental Death Benefits Fund Plan Description The City also participates in the single -employer defined benefit program, which operates like a group -term life insurance plan, operated by the Texas Municipal Retirment System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). SDBF covers both active and retiree participants with no segregation of assets, and therefore doesn't meet the definition of a trust under GASB No. 75 (i.e., no assets are accumulated for OPEB). The City elected, by ordinance, to provide group -term life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue particiapation in the SDBF by adopting an ordinance before November I of any year to be effective the following January 1. 51 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 1. Supplemental Death Benefits Fund (Continued) Benefits 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). The death benefit for retirees is considered an "other post -employment benefit" (OPEB) and is a fixed amount of $7,500. 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, 2020 valuation and measurement date, the following employees were covered by benefit terms: Inactive employees or beneficiaries currently receiving benefits 178 Inactive employees entitled to but not yet receiving benefits 46 Active employees 234 Total 458 Contributions Contributions are made monthly based on the covered payroll of employee members of the participating member city. The contractually required contribution rate is determined annually for each city. The rate is based on mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect. 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 employees' entire careers. Employees of the City were not required to contribute to the OPEB plan during the fiscal year. The contribution rates for the City were 0.25% and 0.36% of gross earnings in calendar year 2020 and 2021. The City's contributions to TMRS SDBF for the year ended September 30, 2021 were $39,141 and were equal to the required contributions. W CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 1. Supplemental Death Benefits Fund (Continued) Changes in the OPEB Liability Balance at 12/31/2019 Changes for the year: Service Cost Interest Change of Benefit Terms Difference Between Expected and Actual Experience Changes of Assumptions Contributions — Employer Contributions — Employees Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Administrative Expense Other Changes Net Changes Balance at 12/31/20 Increase (Decrease) Total OPEB Liability $ 1,179,707 42,722 32,883 (34,781) 175,630 (10,681) 205,773 1,385,480 The following presents the total SDBF OPEB liability of the City, calculated using the discount rate of 2.00%, as well as what the City's total SDBF OPEB liability (asset) would be if it were calculated using a discount rate that is I -percentage -point lower (1.00%) or I -percentage -point higher (3.00%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 1.00% 2.00% 3.00% Net Pension Liability $1,677,266 $1,385,480 $1,157,846 Supplemental Death Benefits Fund Net Position Detailed information about the plan's net position is available in a separately -issued TMRS financial report. That report may be obtained on the Internet at www.Imrs.com. 53 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 1. Supplemental Death Benefits Fund (Continued) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs For the year ended September 30, 2021, the City recognized OPEB expense in the amount of $133,932. At September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEBs from the following sources: Difference Between Expected and Actual Economic Experience (Net of Current Year Amortization) Changes in Actuarial Assumptions Differences Between Projected and Actual Investment Earnings (Net of Current Year Amortization) Contributions Subsequent to the Measurement Date Total Deferred Outflows Deferred Inflows of Resources of Resources 256,189 31,870 $ 56,031 26,855 288,059 82,886 $31,870 reported as deferred outflows of resources related to SDBF OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the year ending September 30, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2022 $ 57,861 2023 43,327 2024 52,166 2025 19,949 2026 - Thereafter - Total $ 173,303 2. City of Paris Retiree Health Care Plan Plan Description The City has in effect a single employer plan (die Plan) adopted by City Council resolution whereby persons who retire before age sixty-five will be provided health care coverage until they become sixty-five. The contribution requirements of the government are established and may be amended by the governing council. The Plan covers retiree benefits with no segregation of assets, and therefore doesn't meet the definition of a trust under GASB No. 75 (i.e., no assets are accumulated for OPEB), The Plan issues a stand-alone financial report. 54 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPER) Obligations (Continued) 2. City of Paris Retiree Health Care Plan (Continued) Benefits Retiree health benefits are available to all retirees who meet the definition of a retiree as set for by City ordinance. Retirees are responsible for the full cost of their retiree health benefits. Retirees who meet certain conditions are eligible for a monthly subsidy from the City toward the purchase of health care coverage until the retiree becomes age 65. Retirees are able to remain on the City group health insurance plan until the retiree reaches age 65 or becomes eligible for Medicare coverage. Retiree premiums are 1.95 times the rates for active employees. Retiree health beneifts are available to spouses and eligible dependents of retirees. All costs for dependents are paid by the retiree if they have them. The City will provide a monthly subsidy to eligible retirees who purchase medical coverage either through the City group insurance plan or from an alternate provider. The cost of coverage for the retiree will be reimbursed up to a maximum amount set by the City with the balance paid by the retiree. Effective January 1, 2020, the maximum amount of the monthly subsidy is $565. Employees Covered by Benefit Terms At the December 31, 2020 valuation and measurement date, the following employees were covered by benefit terms: Inactive Retirees or Beneficiaries Currently Receiving Benefits I I Inactive, Nonretired Members - Active employees 79 Total 90 Contributions The City's contributions are financed on a pay-as-you-go basis. For the year ended September 30, 2021, the contributions were approximately $83,492. 55 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 2. City of Paris Retiree Health Care Plan (Continued) Changes in the OPEB Liability The following presents the total Plan OPEB liability of the City, calculated using the discount rate of 2.00%, as well as what the City's total Plan OPEB liability (asset) would be if it were calculated using a discount rate that is I -percentage -point lower (1.00%) or I -percentage -point higher (3,00%) than the current rate: 1% Decrease in Discount Rate 1.00% Net OPEB Liability $1,805,546 1% Increase in Discount Rate Discount Rate 2.00% 3,00% $1,711,750 $1,620,124 The following presents the Plan's total OPEB liability, calculated using the assumed trend rates as well as what the Plan's total OPEB liability would be if it were calculated using a trend rate that is one percent lower or one percent higher: Current Healthcare Cost Trend Rate 1% Decrease Assumption 1% Increase Net OPEB Liability $1,573,968 $1,711,750 $1,864,530 56 Increase (Decrease) Total OPEB Liability Balance at 12/31/2019 $ 1,620,789 Changes for the year: Service Cost 45,329 Interest 44,410 Change of Benefit Terms - Difference Between Expected and Actual Experience (10,649) Changes of Assumptions 68,964 Contributions — Employer - Contributions — Employees Net Investment Income - Benefit Payments, Including Refunds of Employee Contributions (57,093) Administrative Expense - Other Changes - Net Changes 90,961 Balance at 12/31/20 $ 1,711,750 The following presents the total Plan OPEB liability of the City, calculated using the discount rate of 2.00%, as well as what the City's total Plan OPEB liability (asset) would be if it were calculated using a discount rate that is I -percentage -point lower (1.00%) or I -percentage -point higher (3,00%) than the current rate: 1% Decrease in Discount Rate 1.00% Net OPEB Liability $1,805,546 1% Increase in Discount Rate Discount Rate 2.00% 3,00% $1,711,750 $1,620,124 The following presents the Plan's total OPEB liability, calculated using the assumed trend rates as well as what the Plan's total OPEB liability would be if it were calculated using a trend rate that is one percent lower or one percent higher: Current Healthcare Cost Trend Rate 1% Decrease Assumption 1% Increase Net OPEB Liability $1,573,968 $1,711,750 $1,864,530 56 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPER) Obligations (Continued) 2. City of Paris Retiree Health Care Plan (Continued) OPEB Plan Net Position Detailed information about the plan's net position is available in a separately -issued TMRS financial report. That report may be obtained at 1444 N. Main Street, Paris, Texas 75460. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs For the year ended September 30, 2021, the City recognized OPER expense in the amount of $83,492. At September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEBs from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference Between Expected and Actual Economic Experience (Net of Current Year Amortization) $ - $ 127,449 Changes in Actuarial Assumptions 152,311 18,752 Contributions Subsequent to the Measurement Date 63,679 - Total $ 215,990 $ 146,201 $63,679 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the OPEB liability for the year ending September 30, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2022 $ 2,014 2023 2,014 2024 (4,322) 2025 2,704 2026 3,700 Thereafter - Total $ 6,110 57 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) H. Water Sales and Commitments 1. Water Sales The City has contracts extending for several years to sell treated and untreated water to six entities. Total water sales tinder these contracts to these entities during the year ended September 30, 2021, were approximately $3,024,113. 2. Construction Commitments The City has active construction projects as of September 30, 2021. At year-end, the City's commitments with contractors are as follows: Project To Date Commitment Sewer and Water System Replacement and Related Street Reconstruction $ 26,952,773 1,216,540 Total $ 26,952,773 $ 1,216,540 3. Water Storage Commitment The City has the right to utilize an undivided 100% of the usable conservation storage space in Pat Mayse Lake between elevations 451 feet and 415 feet above sea level which is estimated at 109,600 acre feet. The Government reserves the right to control and use all storage in accordance with project purposes, to take such measures to preserve life and or property including the right not to make downstream releases and to inspect, maintain, or repair the project. The City will be required to pay 10.526% of the cost of joint -use repair, rehabilitation, and replacement and 26.659% of the annual experienced joint -use operation and maintenance of the project. 4. Civic Center Contract Commitment The City is a party to a contract with the Chamber of Commerce of Lamar County, Inc. whereby three - sevenths of the hotel/motel tax is to be dedicated to a fund to be used for improving, enlarging, equipping, repairing, operating, or maintaining a civic center. The contract provides that the Chamber of Commerce of Lamar County, Inc. will operate the civic center through September 30, 2021, and may be reviewed for four additional one year terms upon written agreement of the parties. Either party may terminate this contract at the end of the current term by giving thirty days notice. 5. Interlocal Cooperative Agreement During the year, the City participated in an interlocal cooperative agreement with the Sulphur River Regional Mobility Authority. The City's payments are to assist in funding completion of approximately 10.4 miles of four -lane divided highway in Delta County, Texas. The City considers this a cost sharing arrangement, accordingly, debt payments are not included in long-term liabilities. Annual payments of $100,827 include principal and interest at 3.68% beginning March 29, 2013, through March 29, 2024. The City is required to establish a sinking fund and to levy and collect property tax. The balance outstanding at September 30, 2021 is $283,307. 58 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) H. Water Sales and Commitments (Continued) 6. Other Commitments - PEDC American SpiralWeld - On October 1, 2018, the Board of Directors reached an incentive agreement with American SpiralWeld Pipe Company, LLC. PEDC will invest up to $4,700,000 in cash, land, and improvements in connection with a new manufacturing facility, job creation, and employment retention. The remaining balance is estimated to be $1,000,000. Huhtamaki — On September 17, 2019, the Board of Directors reached a performance agreement with Huhtamaki providing that upon the retention of jobs, PEDC will provide funds to help establish the rail spur from the north/south rail to the Huhtamaki plant. The remaining balance is estimated to be $102,000. Metro Gate — On January 22, 2021, the Board reached a performance agreement with Metro Gate and Manufacturing Company, Inc. PEDC will provide $120,000 for the creation of 40 full-time employees paid out in installments over 5 years and $40,000 for expected capital expenditures for a total of $160,000. The remaining balance is estimated to be $120,000. I. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City purchases insurance coverage from commercial insurers and participates in risk pools to limit risk of loss in these areas. The risk pools maintain adequate protection from catastrophic losses to protect their financial integrity. Aggregate protection is also maintained to ensure that the City shall at no time be assessed. The City's contributions are limited to the rates calculated under the agreement. There has been no significant reduction in insurance coverage during the year ended September 30, 2021. There have been no settlements in excess of insurance coverage in any of the prior three fiscal years. J. Capital Leases In September 2015, the City began teasing equipment under an agreement classified as a capital lease due to a bargain purchase option. The capital lease and accumulated amortization are as follows: Capital Lease Equipment, at Cost Less: Accumulated Amortization Capital Lease Equipment, Net $ 617,114 348,241 $ 268,873 59 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) J. Capital Leases (Continued) The future minimum lease payments required under the capital leases and the present value of the net minimum lease payments as of September 30, 2021, are as follows: Year Ending September 30, Amount 2022 $ 72,353 2023 72,353 2024 72,353 2025 72,353 Total Minimum Lease Payments 289,412 Less: Amount Representing Interest (20,539) Present Value of Net Minimum Lease Payments 268,873 Less: Current Maturities of Capital Lease Obligation (64,285) Long -Term Portion of Capital Lease Obligation $ 204,588 In January 2016, the City began leasing equipment under an agreement classified as a capital lease due to a bargain purchase option. The capital lease and accumulated amortization are as follows: Capital Lease Equipment, at Cost $ 975,185 Less: Accumulated Amortization 451,689 Capital Lease Equipment, Net $ 523,496. The future minimum lease payments required under the capital leases and the present value of the net minimum lease payments as of September 30, 2021, are as follows: Year Ending September 30, Amount 2022 $ 114,337 2023 114,337 2024 114,337 2025 114,337 2026 114,337 Total Minimum Lease Payments 571,685 Less: Amount Representing Interest (48,189) Present Value of Net Minimum Lease Payments 523,496 Less: Current Maturities of Capital Lease Obligation (98,628) Long -Term Portion of Capital Lease Obligation $ 424,868 K. Long -Term Liabilities In the government -wide financial statements and proprietary funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary funds statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses in the year of issuance. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances W CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) K. Long -Term Liabilities (Continued) are reported as other financing uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. General Obligation Certificates of Obligation and Other Long -Term Obligations: $4,505,000 General Obligation Refunding Bonds, Series 2012, due in annual installments varying from $395,000 to $405,000 with final payment due December 14, 2021. On December 18, 2012, the City issued this series bearing interest of 2.5% to refund Outstanding Combination Tax and Revenue Certificates of Obligation, Series 2002 ($3,440,000) bearing interest ranging from 4.0% to 4.7% and General Obligation Refunding Bonds, Series 2003 ($1,210,000) bearing interest ranging from 3.75% to 3.9%. The net proceeds of $4,652,190 (after payment of various fees and including premium and accrued interest) were deposited in an escrow fund to prepay the refunded bonds. The issuance of the bonds produced a gross debt service savings of $612,058 and a net present value savings of $584,806. $9,750,000 General Obligation Bonds, Series 2017, due in annual installments varying from $405,000 to $635,000 with final payment due June 15, 2037. On July 17, 2017, the City issued this series bearing interest ranging from 2.125% to 3.0%. On December 15, 2027, or any date thereafter, the outstanding bonds may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued at a premium to provide funds to pay the costs of construction, improving, extending, expanding, upgrading and developing streets and roads, bridges and intersections including, utility relocation, landscapting, sidewalks, traffic safety and operational improvements, the purchase of any necessary right-of-way, drainage, and other related costs, and improving and equipping parks, trails and recreational facilities. $2,900,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2013, due in annual installments varying from $150,000 to $165,000 with final payment due June 15, 2032. Interest is payable semi- annually at rates ranging from 0.56% to 1.45%. On June 15, 2023, or any date thereafter, the outstanding bonds may be redeemed prior to their scheduled maturities at the City's option. These bonds were issued to provide funds to pay the costs of improving the potable water distribution system and related costs. The certificates are also secured by a pledge of net revenues of the water works and sewer system. In addition to the purchase of these bonds by the Texas Water Development Board, the City received $500,778 in connection with a loan forgiveness program. The bonds are reported as obligations of the Enterprise Fund. $33,925,000 General Obligation Bonds, Series 2013, due in annual installments varying from $1,730,000 to $2,850,000 with final payment due December 15, 2032. Interest is payable semi-annually at rates ranging from 4.0% to 5.0%. On December 15, 2023, or any date thereafter, the outstanding bonds may be redeemed prior to their scheduled maturities at the City's option. These bonds were issued August 15, 2014, at a premium for the purpose of replacing and extending water distribution lines and sewer collection lines and making repairs necessitated by the replacement. Voters of the issuer approved the issuance of $45,000,000 in tax bonds. The bonds are reported as obligations of the Enterprise Fund. $8,780,000 General Obligation Bonds, Series 2016, due in annual installments varying from $355,000 to $550,000 with final payment due December 15, 2036. Interest is payable semi-annually at rates ranging from 3.0% to 4.0%. On December 15, 2026, or any date thereafter, the outstanding bonds may be redeemed prior to their scheduled maturities at the City's option. These bonds were issued December 1, 2016, at a premium for the purpose of constructing and acquiring improvements and equipping the City's waterworks and sewer system and for replacing and extending water distribution lines and sewer collection lines and construction repairs to streets and drainage infrastructure necessitated by such water and sewer line construction. Voters approved the issuance of $45,000,000 in tax bonds. The bonds are reported as obligations of the Enterprise Fund. 61 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) K. Long -Term Liabilities (Continued) General Obligation Certificates of Obligation and Other Long -Term Obligations (Continued): $1,390,000 General Obligation Bonds, Series 2018, due in annual installments varying from $130,000 to $220,000 with final payment due June 15, 2028. Interest is payable semi-annually at 2.59%. The principal installments of this bond are not subject to redemption prior to maturity. These bonds were issued May 1, 2018, in the amount of $1,200,000 for the purpose of constructing and acquiring improvements and equipping the City's waterworks and sewer system and for replacing and extending water distribution lines and sewer collection lines and construction repairs to streets and drainage infrastructure necessitated by such water and sewer line construction and in the amount of $190,000 to pay the costs of construction, improving, extending, expanding, upgrading and developing streets and roads, bridges and intersections including, utility relocation, landscapting, sidewalks, traffic safety and operational improvements, the purchase of any necessary right-of- way, drainage and other related costs. The bonds are reported as Enterprise Fund debt and General Obligation debt. $1,500,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2020, due in annual installments varying from $140,000 to $165,000 with final payment due June 15, 2030. Interest is payable semi- annually at 1.95%. The certificates of this series are not subject to redemption prior to maturity. These bonds were issued February 1, 2020 for the purpose of paying all or a portion of the City's contractual obligations incurred in connection with the renovation, repair and other improvement of the City's Love Civic Center and paying legal, fiscal and engineering fees in connection with such projects. The bonds are reported as General Obligation debt. $1,115,000 Tax Notes, Series 2020, due in annual installments varying from $160,000 to $195,000 with final payment due June 15, 2026. Interest is payable semi-annually at 1.05%. The principal installments of this note are not subject to redemption prior to maturity. The note was issued November 1, 2020 for the purpose of paying contractural obligations incurred or to be incurred for the construction of any public work, for the purchase of materials, supplies, equipment, machinery, buildings, lands and right-of-way for the City's authorized needs and purposes, and to pay costs of professional services. The note is reported as General Obligation debt. $1,765,000 General Obligation Refunding Bonds, Series 2020, due in annual installments varying from $180,000 to $210,000 with final payment due December 15, 2029. Interest is payable semi-annually at 1.24%. On December 15, 2020, the City issued this series to refund Outstanding Combination Tax and Revenue Certificates of Obligation, Series 2010 ($3,005,000) bearing interest ranging from 3.0% to 4.2%. The net proceeds of $1,772,711 (after payment of various fees, outstanding principal balance, and accrued interest) were deposited in the Old Paying Agent account to refund the Refunding Bonds on the Redemption Date in accordance with the Deposit Agreement. The issuance of the bonds produced a present value debt service savings of $188,730 and an actual debt service savings of $201,195. The bonds are reported as General Obligation Debt. $43,855,000 Combination Tax and Surplus Revenue Certification of Obligation, Series 2021, due in annual installments varying from $620,000 to $2,160,000 with final payment due on December 15, 2050. Interest is payable semi-annually at rates ranging from 2.0% to 5.0%. On December 15, 2030, or any date thereafter, the certificate may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued on May 12, 2021, at a premium for the purpose of refurbishment of portions of the existing waste water treatment plant as needed in connection with the construction of a new waste water treatment plant. Voters approved the issuance of $46,065,000 in tax bonds. The bonds are reported as obligations of the Enterprise Fund. 62 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) K. Long -Term Liabilities (Continued) General Obligation Certificates of Obligation and Other Long -Term Obligations (Continued): The ordinances require that property taxes be levied and collected at a rate sufficient to pay principal and interest as they come due. They also require that these funds be placed in special interest and sinking funds created solely for the benefit of the obligations. At September 30, 2021, the fund balances in the Interest and Sinking Funds are $1,928,672. The State of Texas is requiring additional monitoring of a landfill owned by the City that has been closed for several years. The City and its' consultants estimate that, based on known requirements, future costs may be $150,000. These costs are subject to change resulting from inflation, deflation, technology, or changes in applicable laws or regulations. A summary of long-term liability transactions for the year ended September 30, 2021, follows: 63 Balance Balance September 30, September 30, Due Within 2020 Additions Reductions 2021 One Year Governmental Activities Debt Payable Bonds Payable $ 12,975,000 $ 1,765,000 $ 2,910,000 $ 11,830,000 $ 1,225,000 Tax Notes Payable - 1,115,000 160,000 955,000 185,000 Premium 122,856 - 12,719 110,137 - Capital Leases 950,526 - 158,073 792,453 162,913 Total Debt Payable 14,048,382 2,880,000 3,240,792 13,687,590 1,572,913 Compensated Absences 1,118,504 742,958 698,598 1,162,864 116,287 Landfill Post -Closure Care Costs 150,000 - - 150,000 - Governmental Activities Long -Tenn Liabilities $ 15,316,886 $ 3,622,958 $ 3,939,390 $ 15,000,454 $ 1,689200 Business -Type Activities Debt Payable Bonds Payable $ 38,875,000 $ - $ 2,300,000 $ 36,575,000 $ 2,345,000 Tax Notes Payable - 43,855,000 - 43,855,000 - Premium 794,492 2,425,887 107,373 3,113,006 - Total Debt Payable 39,669,492 46,280,887 2,407,373 83,543,006 2,345,000 Compensated Absences 211,043 186,856 175,126 222,773 22,277 Business -Type Activities Long -Term Liabilities $ 392880,535 $ 46,467,743 $ 2,582,499 $ 83,765,779 $ 2,362,277 63 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) K. Long -Term Liabilities (Continued) General Obligation Certificates of Obligation and Other Long -Term Obligations: (Continued) Advance Refunding The City issued $1,765,000 in general obligation bonds with an interest rate of 1.24%. The proceeds were used to advance refund $1,740,000 of outstanding 2010 Combination Tax and Revenue Certificates of Obligation which had interest rates ranging from 3.0% to 4.2%. Long-term debt service requirements for the next five years and after, in five year increments, are as follows: Year Ending Balance Balance PEDC September 30, September 30, Due Within Principal 2020 Additions Reductions 2021 One Year Component Unit $ 1,410,000 $ 296,074 $ 2,345,000 Note Payables $ 1,557,394 $ - $ 335,640 $ 1,221,754 $ 104,446 Component Unit 269,466 3,655,000 2,645,865 Long -Term Liabilities $ 1,557,394 $ - $ 335,640 $ 1,221,754 $ 104,446 For governmental activities, pension -related debt and compensated absences are liquidated by the general fund. Advance Refunding The City issued $1,765,000 in general obligation bonds with an interest rate of 1.24%. The proceeds were used to advance refund $1,740,000 of outstanding 2010 Combination Tax and Revenue Certificates of Obligation which had interest rates ranging from 3.0% to 4.2%. Long-term debt service requirements for the next five years and after, in five year increments, are as follows: Year Ending General Obligation Water and Sewer PEDC September 30, Principal Interest Principal Interest Principal Interest 2022 $ 1,410,000 $ 296,074 $ 2,345,000 $ 2,942,296 $ 104,446 $ 44,377 2023 935,000 269,466 3,655,000 2,645,865 108,461 40,363 2024 955,000 249,868 4,440,000 2,460,311 112,238 37,113 2025 980,000 229,759 4,650,000 2,249,651 116,284 33,593 2026 995,000 209,168 3,530,000 2,072,538 120,915 28,962 2027-2031 3,960,000 761,338 18,530,000 8,147,963 446,065 83,704 2032-2036 2,915,000 344,423 14,910,000 4,282,544 213,345 11,217 2037-2041 635,000 18,098 8,840,000 2,641,768 - - 2042-2046 - - 9,215,000 1,721,875 - - 2047-2051 - - 10,315,000 618,725 - - Totals $12,785,000 $22378,194 $80,430,000 $29,783,536 $1,221,754 $279,329 PEDC has an outstanding $697,000, Note Payable, issued November 27, 2018, due in monthly installments of $5,086 through May 27, 2027, bearing an interest rate of 3.75%. At September 30, 2021, the balance of the Note Payable was $349,386. PEDC has an outstanding $1,000,000, Note Payable, issued March 5, 2019, due in monthly installments of $7,316 through March 27, 2034, bearing an interest rate of 3.75%. At September 30, 2021, the balance of the Note Payable was $872,368. Sales and Use Taxes (one-quarter of one percent) levied by the City of Paris, Texas, within its boundaries under the Development Corporation Act of 1979, are pledged for payment of bonds and interest of PEDC. The resolution authorizing the issuance of the bonds requires that monthly deposits be made to the Debt Service Fund in an amount sufficient to pay the next maturing bonds and interest. 64 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) L. Interfund Transfers During the year ended September 30, 2021, the City made transfers from the Water and Sewer fund to the Debt Service fund of $99,921 to make debt service payments. The City also made a transfer from the Special Revenue fund to the General Fund related to reclassification of funds. The City also made a transfer of bond proceeds from the Debt Service fund to the General fund of $1,078,000. Other minor transfers were made between funds making up transfers of M. Restricted Net Position and Restricted Asset Accounts In order to safeguard the financial integrity of the water and sewer system, the City Council approved a resolution establishing and maintaining funds comparable to those required by the revenue bonds refunded in 2010. At September 30, 2021, these accounts, shown as cash and investments on the Statement of Net Position — Proprietary Funds, are as follows: Reserve Fund Contingency Fund $ 8,321,837 1,929,727 Collections of notes receivable are restricted by grant agreements to be used for building rehabilitation. The balances of the City's restricted asset accounts are as follows: Cash and Cash Deposit and Equivalents Water $ - Lake Crook 3,811 Debt Other and Transfers Bond Reserves and Sinking Funds General Service Governmental Sewer Out General $ - $ 48,923 $ 446,595 $306,693 $ 802,211 Debt Service 1,078,500 - - - 1,078,500 Other Governmental 1,643,419 - 11,653 1,655,072 Water and Sewer 29,321 99,921 - - 129,242 Transfers In $ 2,751,240 $ 148,844 $ 458,248 $306,693 $3,6652025 M. Restricted Net Position and Restricted Asset Accounts In order to safeguard the financial integrity of the water and sewer system, the City Council approved a resolution establishing and maintaining funds comparable to those required by the revenue bonds refunded in 2010. At September 30, 2021, these accounts, shown as cash and investments on the Statement of Net Position — Proprietary Funds, are as follows: Reserve Fund Contingency Fund $ 8,321,837 1,929,727 Collections of notes receivable are restricted by grant agreements to be used for building rehabilitation. The balances of the City's restricted asset accounts are as follows: 65 Certificates of Cash and Cash Deposit and Equivalents Grants Receivable $ - Lake Crook 3,811 Contingency 1,381,976 Loan 35,333 Bond Reserves and Sinking Funds 5,934,968 Construction 2,988,522 Other 392,966 Total Restricted Assets $ 10 737,576 65 Certificates of Deposit and Other Other Investments Receivables $ - $ 403,240 547,751 - 2,386,869 - 39,286,919 - $ 42,221,539 $ 403,240 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) N. Related Party The City Council appoints the governing board of an entity which is legally separate from the City. The City is not able to impose its will on this entity, and a financial benefit/burden relationship is not present; therefore, it is considered a related organization. O. Contingent Liabilities Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. The City has incurred certain asset retirement obligations related to the operation of its wastewater utility system. The U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality regulates wastewater utility system closure and post closure requirements. Environmental engineers calculated the asset retirement obligation based on the estimated current cost of remediation and removal of the contamination and contaminated sludge and dirt in the wastewater treatment facilities. The estimated liability of the legally required closure costs for the wasterwater utility system was estimated as of September 30, 2021 to be $2,901,000. The estimated remaining wastewater utility system life is 30 years. The actual cost of closure and post closure may be higher due to inflation, changes in technology, or changes in wasterwater utility system laws and regulations. At September 30, 2021, there were no assets restricted to pay this liability. P. Tax Abatements As of September 30, 2021, the City provides tax abatements through two progams-Industrial and Residential: 1. Industrial abatements are possible for manufacturing, research, regional distribution, regional services, regional tourist entertainment, basic industry, and any primary jobs creating industry. The property involved must be newly created or improvements to an existing facility. Abatements may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements, tangible personal property, and office space and improvements necessary to the operation and administration of the facility. Inventory and supplies are not eligible for abatement. The City Council grants abatements on a case by case basis. The abatement is stated as a percentage of the eligible property under consideration and for a specified period of time up to ten years. The City has a written industrial tax abatement policy. Provisions for recapturing abated taxes, if any, are included in this policy. 2. Residential abatements are granted for five year periods. The property involved must be new residential structures or improvements to existing structures that will be at least a 20% increase in the previous appraised value of the property. The abatements are stated as a percentage of the increased value using the following schedule: Year 1-100%, Year 2-100%, Year 3-80%, Year 4-60%, and Year 5-40%. The City has a standard written residential tax abatement agreement. Provisions for recapturing abated taxes, if any, are included in this policy. Tax Abatement Pro ram Industrial Incentives 66 Amount of Taxes Abated 2020-21 $ 1,256,201 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 IV. Detailed Notes on All Activities and Funds (Continued) Q. Prior Period Adjustment During fiscal year 2021, the City determined that an adjustment was necessary to the adjust revenue and expenses that should have been recorded in the prior fiscal year. The prior period adjustment totaled $52,060 for governmental funds and $62,800 for proprietary funds. The restated beginning fund balance for governmental funds and net position for proprietary funds is $17,098,017 and $43,741,009, respectively. The restated net position for governmental activities is $36,994,500. R. Subsequent Event In December 2021, the City approved a note with Paris Economic Development Corporation in the amount in the amount of $2,500,000. The initial interest rate is 2.14% paid monthly and will be adjusted every 36 months, never falling below 2.0%, with a maturity date of December 27, 2031. 67 REQUIRED SUPPLEMENTARY INFORMATION O G � a 40. Uj � +O• RS N ON � � M Lr. p CZ :3 .2 Z b cn�aGj TU 4 :2 O N CO+I (D N 6 4 h itT s6DDM r- Nr- I'D I'D N iD 1n-� N , � � C 000 . 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U) 10 0 fl o 4) C/I 0 u 2 40. 2 0— "a CA W '00 < < C to a > 0 0 A 6 Z z.0 ;t:: 0 .0 0 Z U .0 C* 0 0 0 0 .< u u d u E 0 70 01- X 0 4. 0 y E 0 0 F* q E E 0 t4 0 0 > •V C> 1• � E �: 40- E C4 -- 0 N Lf Of E o E 2 0 0 Cd .— CL S. cn 9 E ot S� 0 N 'o — v 0 Z> E 4. of 0 C,4 C 0 0 0= U. A - * -0 -0 rn 0— %n 42 04-. C� to co .2 "t3 0 4) S. 5.5 a =0 co . 0 P. t: 79 0-12 R 04 �a � 'a 0 40. 0 &4.1 u,, 0 0 0 C 4)- 0 N 0 "a LT'' a C6 of 0 5.9 'a tn W) 0 o 40. 0 CL. U) 10 0 fl o 4) C/I 0 u 2 40. 2 0— "a CA W '00 < < C to a > 0 0 A 6 Z z.0 ;t:: ! 1 iw joi ! CITY OF PARIS, TEXAS Nonmajor Governmental Funds September 30, 2021 Special Revenue Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Community Development Block Grant - This fund accounts for funds received from various federal grant programs and expended for community development purposes. Special Revenue Fund - This fund accounts for funds received from various sources and can be expended for improving efficiency of the administration of justice; enhancing child safety, health, and nutrition; security devices and technological enhancements for municipal court; and other improvement activity. Library Memorial Funds — These funds account for resources given for book and library related purposes in memory of individuals. Permanent Funds Library Trust Funds — These funds account for resources of a permanent nature whereby only earnings and not principal may be used for books and library -related purposes. Other Major Governmental Funds Debt Service Fund — This fund accounts for the accumulation of resources and the payment of general obligation principal and interest. Capital Projects Fund — This fund accounts for proceeds from bond issues and transfers. 76 CITY OF PARIS, TEXAS Schedule 9 Combining Balance Sheet - Nonmajor Governmental Funds September 30, 202I M Special Revenue Permanent Community Total Development Special Library Library Nonmajor Block Revenue Memorial Trust Governmental Grant Fund Funds Total Funds Funds ASSETS Cash and Cash Equivalents $ 220,509 $ 779,285 $ 76,935 $1,076,729 $ 581 $ 1,077,310 Investments 86 - - 86 97,962 98,048 Receivables (Net) - 916 - 916 - 916 Total Assets $ 220,595 $ 780,201 $ 76,935 $1,077,731 $ 98,543 $ 1,176,274 LIABILITIES AND FUND BALANCES Liabilities: Accounts Payable $ - $ - $ - $ - $ - $ - Total Liabilities - - - - - - Fund Balances: Nonspendable Permanent Library Funds - - - - 98,543 98,543 Restricted for: Notes - - - - - - Law Enforcement - 672,627 - 672,627 - 672,627 Community Development - 107,574 - 107,574 - 107,574 Assigned: Library - - 76,935 76,935 - 76,935 Community Development 220,595 - - 220,595 - 220,595 Total Fund Balances 220,595 780,201 76,935 1,077,731 98,543 1,176,274 Total Liabilities and Fund Balances $ 220,595 $ 780,201 $ 76,935 $1,077,731 $ 98,543 $ 1,176,274 M CITY OF PARIS, TEXAS Schedule 10 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year Ended September 30, 2021 EXPENDITURES Current General Government - 45,318 Special Revenue 45,318 Permanent - 6,911 - 6,911 - Community Community Development - - - - - - Total - 1,470 Development 1,470 Library - - Library Nonmajor Debt Service Block Special Memorial Principal Trust Governmental - Grant Revenue Funds Total Funds Funds REVENUES Sources (Uses) General Government - - - - - - Public Safety Fees and Fines $ - $ 48,152 $ - $ 48,152 $ - $ 48,152 Hotel Occupancy Taxes - 46,573 - 46,573 - 46,573 Intergovernmental - - - - - - Use of Money and Property 441 633 181 1,255 143 1,398 Miscellaneous - 61,734 2,832 64,566 - 64,566 Total Revenues 441 157,092 3,013 160,546 143 160,689 EXPENDITURES Current General Government - 45,318 - 45,318 - 45,318 Public Safety - 6,911 - 6,911 - 6,911 Community Development - - - - - - Health - 1,470 - 1,470 - 1,470 Culture and Recreation - - 1,879 1,879 - 1,879 Debt Service Transfers Out - (1,655,072) Principal - - - - - - Interest & Other Charges - - - - - - Capital Outlay Sources (Uses) General Government - - - - - - Public Safety - 35,390 - 35,390 - 35,390 Total Expenditures - 89,089 1,879 90,968 90,968 Excess (Deficiency) of Revenues Over (Under) Expenditures 441 68,003 1,134 69,578 143 69,721 Other Financing Sources (Uses) Transfers In - 458,248 - 458,248 - 458,248 Transfers Out - (1,655,072) - (1,655,072) - (1,655,072) Total Other Financing Sources (Uses) - (1,196,824) - (1,196,824) - (1,196,824) Net Changes in Fund Balances 441 (1,128,821) 1,134 (1,127,246) 143 (1,127,103) Fund Balances - Beginning 220,154 1,909,022 75,801 2,204,977 98,400 2,303,377 Fund Balances - Ending $ 220,595 $ 780,201 $ 76,935 $1,077,731 $ 98,543 $ 1,176,274 78 CITY OF PARIS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Special Revenue Fund Year Ended September 30, 2021 REVENUES Fees and Fines Hotel Occupancy Taxes Intergovernmental Interest Earned Miscellaneous Total Revenues EXPENDITURES Municipal Court Police Health Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Changes in Fund Balance Fund Balance - Beginning Budgeted Amounts Original Final $ 41,500 $ 41,500 3,375 3,375 $ Actual 48,152 46,573 633 L1 +T9e Schedule 11 Variance with Final Budget $ 6,652 46,573 (2,742) 61,734 44,875 44,875 157,092 112,217 43,250 43,250 45,318 (2,068) 40,000 40,000 42,301 (2,301) 3,500 3,500 1,470 2,030 86,750 86,750 89,089 (2,339) (41,875) (41,875) 68,003 109,878 458,248 458,248 (1,655,072) (1,655,072) (1,196,824) (1,196,824) (41,875) (41,875) (1,128,821) (1,086,946) 1,909,022 1,909,022 1,909,022 Prior Period Adjustment - - - - Fund Balance - Ending $ 1,867,147 $ 1,867,147 $ 780,201 $ (1,086,946) 79 CITY OF PARIS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Debt Service Fund Year Ended September 30, 2021 REVENUES Property Taxes Hotel Occupancy Taxes Interest Earned Total Revenues EXPENDITURES Bond Principal Retirement Interest and Fiscal Charges Total Expenditures Excess of Revenues Over Expenditures Other Financing Sources (Uses): Refunding Bonds Issued Refunding Bonds Issue Costs Tax Notes Issued Tax Notes Issue Costs Transfers In Transfers Out Total Other Financing Sources (Uses) Net Changes in Fund Balance Fund Balance - Beginning Budgeted Amounts Original Final Actual Schedule 12 Variance with Final Budget $ 1,372,780 $ 1,372,780 $ 1,541,384 $ 168,604 - - 265,041 265,041 - - 4,777 4,777 1,372,780 1,372,780 1,811,202 438,422 1,162,193 1,162,193 3,157,193 (1,995,000) 369,688 369,688 360,552 9,136 1,531,881 1,531,881 3,517,745 (1,985,864) (159,101) (159,101) (1,706,543) (1,547,442) 166,425 166,425 1,765,000 1,598,575 (500) (500) (45,492) (44,992) - - 1,115,000 1,115,000 (36,500) (36,500) 148,844 148,844 (1,078,500) (1,078,500) 165,925 165,925 1,868,352 1,702,427 6,824 6,824 161,809 154,985 1,766,863 1,766,863 1,766,863 Fund Balance - Ending $ 1,773,687 $ 1,773,687 $ 1,928,672 $ 154,985 W CITY OF PARIS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Capital Projects Fund From Inception and Year Ended September 30, 2021 Prior REVENUES Interest Earned $ 527,958 Other 245,248 Total Revenues 773,206 EXPENDITURES City Council 646,604 Police 285,630 Fire 915,942 Community Development 725,207 Engineering 35,555 Parks and Recreation 563,384 Solid Waste 568,811 Streets and Highways 13,167,191 Health 144,232 Library 7,100 Cox Field Airport 110,667 Total Expenditures 17,170,323 Deficiency of Revenues Over Expenditures (16,397,117) Other Financing Sources (Uses): Transfers In 9,604,042 Transfers Out (2,549,549) Certificates of Obligation Issued 12,918,399 SPECIAL ITEM Proceeds from Sale of Assets 90,100 Net Changes in Fund Balance $ 3,665,875 Fund Balance - Beginning Fund Balance - Ending Current Year $ 7,144 18,000 25,144 61,540 172,505 234,045 Total $ 535,102 263,248 798,350 708,144 285,630 915,942 725,207 35,555 563,384 568,811 13,339,696 144,232 7,100 110,667 17,404,368 (208,901) (16,606,018) Schedule 13 Project Authorization (Budget) 314,109 285,630 915,942 870,350 35,555 923,781 1,181,019 8,095,265 228,000 35,000 159,100 13,043,751 (13,043,751) 9,604,042 - (2,549,549) - 12,918,399 - 90,100 (208,901) $ 3,456,974 3,836,182 $ 3,627,281 81 $ (13,043,751) C 111 1llW.V"Myjftw,4031z! TIE OPERATION OF GOVERNMENTAL FUNDS CITY OF PARIS, TEXAS Capital Assets Used in the Operation of Governmental Funds Comparative Schedules by Source September 30, 2021 and 2020 Governmental Funds Capital Assets: Land Buildings Improvements Other Than Buildings Machinery and Equipment Infrastructure Construction in Progress Total Governmental Funds Capital Assets Investments in Governmental Funds Capital Assets by Source: General Fund Capital Projects Funds Donations Total Investments in Governmental Funds Capital Assets by Source 82 2021 $ 5,950,108 20,556,584 6,601,672 23,102,816 52,733,342 263,364 Schedule 14 2020 $ 5,950,108 20,525,627 6,601,672 22,317,003 46,013,892 6,664,407 $ 109,207,886 $108,072,709 $ 69,562,588 31,978,964 7,666,334 $ 109,207,886 $ 68,693,870 31,747,955 7,630,884 $108,072,709 CITY OF PARIS, TEXAS Statistical Section September 30, 2021 This part of the City of Paris' annual comprehensive financial report contains detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the ad valorem tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader under- stand how the information in the government's financial report relates to the services the government provides and the activities it performs. 83 Tables 1-4 Tables 5 - 8 Tables 9-13 Tables 14-15 Tables 16-19 CITY OF PARIS, TEXAS Table 1 Net Assets/Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited Business -Type Activities: Net Investment in Capital Assets $ 34,499,646 $ 33,003,801 $ 33,041,432 $ 33,331,038 Restricted - - - - Unrestricted 8,496,996 10,075,150 12,172,944 13,508,734 Total Business -Type Activities, Net Position $ 42,996,642 Fiscal Year $ 45,214,376 $ 46,839,772 2012 2013 2014 2015 Governmental Activities. Net Investment in Capital Assets $ 62,031,999 $ 61,736,602 $ 61,469,190 Net Investment in Capital Assets $ 27,532,353 $ 28,732,801 $ 28,427,758 $ 28,043,910 Restricted 5,421,971 4,949,039 4,949,039 3,393,033 Unrestricted 12,700,759 12,301,829 10,023,934 5,694,771 Total Governmental Activities, Net Assets/Position $ 88,651,725 $ 89,062,620 $ 88,615,107 Net Position $ 45,655,083 $ 45,983,669 $ 43,400,731 $ 37,131,714 Business -Type Activities: Net Investment in Capital Assets $ 34,499,646 $ 33,003,801 $ 33,041,432 $ 33,331,038 Restricted - - - - Unrestricted 8,496,996 10,075,150 12,172,944 13,508,734 Total Business -Type Activities, Net Position $ 42,996,642 $ 43,078,951 $ 45,214,376 $ 46,839,772 Primary Government: Net Investment in Capital Assets $ 62,031,999 $ 61,736,602 $ 61,469,190 $ 61,374,948 Restricted 5,421,971 4,949,039 4,949,039 3,393,033 Unrestricted 21,197,755 22,376,979 22,196,878 19,203,505 Total Primary Government, Net Assets/Position $ 88,651,725 $ 89,062,620 $ 88,615,107 $ 83,971,486 1 Fiscal Year 2016 2017 2018 2019 2020 2021 $ 30,505,784 3,003,799 1,890,470 $ 21,971,338 3,004,564 11,159,128 Table 1 (Continued) $ 20,713,428 $ 18,064,569 $ 21,907,532 $ 26,703,929 12,548,372 8,782,171 8,272,920 7,357,621 53,717 4,831,122 6,866,108 6,606,102 $ 35,400,053 $ 36,135,030 $ 33,315,517 $ 31,677,862 $ 37,046,560 $ 40,667,652 $ 33,466,855 14,460,833 $ 24,198,822 22,900,345 $ 18,322,809 $ 25,779,748 $ 28,880,579 $ 33,410,030 22,945,722 16,473,443 14,923,230 11,802,173 $ 47,927,688 $ 47,099,167 $ 41,268,531 $ 42,253,191 $ 43,803,809 $ 45,212,203 $ 63,972,639 $ 46,170,160 $ 39,036,237 $ 43,844,317 $ 50,788,111 $ 60,113,959 3,003,799 3,004,564 12,548,372 8,782,171 8,272,920 7,357,621 16,351,303 34,059,473 22,999,439 21,304,565 21,789,338 18,408,275 $ 83,327,741 $ 83,234,197 $ 74,584,048 $ 73,931,053 $ 80,850,369 $ 85,879,855 ER CITY OF PARIS, TEXAS Table 2 Changes in Net Assets/Position Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited Business -Type Activities: Charges for Services: Water and Sewer Service 13,852,441 14,005,748 13,881,328 14,281,964 Total Primary Government Program Revenues 21,055,120 20,927,473 20,193,260 20,689,123 ER Fiscal Year 2012 2013 2014 2015 EXPENSES Governmental Activities: General Government $ 2,094,110 $ 2,905,871 $ 2,997,393 $ 2,909,807 Finance 480,144 393,526 407,463 404,567 Public Safety 10,771,351 9,982,926 10,449,953 11,037,966 Public Works 7,568,269 8,396,001 7,909,651 7,508,978 Health 3,416,360 3,348,281 3,228,513 2,404,782 Library Services 712,033 787,242 816,376 790,339 Cox Field Airport 261,463 259,938 158,632 152,063 Interest on Long -Terns Debt 342,554 436,690 287,256 276,197 Bond Issue Costs - 314,765 - - Total Governmental Activities Expenses 25,646,284 26,825,240 26,255,237 25,484,699 Business -Type Activities: Water and Sewer Services 11,008,967 11,504,538 11,940,791 11,929,499 Total Primary Government Expenses 36,655,251 38,329,778 38,196,028 37,414,198 PROGRAM REVENUES Governmental Activities: Charges for Services: General Government - 2,447 3,310 17,634 Public Safety 729,267 412,150 433,828 370,308 Public Works 1,788,753 1,860,656 1,799,918 1,862,606 Health 2,721,421 2,463,907 2,371,757 2,391,817 Library Services 20,877 27,824 19,400 19,433 Cox Field - 78,234 67,037 76,689 Operating Grants and Contributions 1,305,387 1,959,427 926,506 1,396,711 Capital Grants and Contributions 636,974 117,080 690,176 271,961 Total Governmental Activities Program Revenues 7,202,679 6,921,725 6,311,932 6,407,159 Business -Type Activities: Charges for Services: Water and Sewer Service 13,852,441 14,005,748 13,881,328 14,281,964 Total Primary Government Program Revenues 21,055,120 20,927,473 20,193,260 20,689,123 ER Table 2 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 $ 3,463,908 $ 3,748,965 $ 3,421,223 $ 3,651,888 $ 3,927,783 $ 5,000,473 400,665 398,262 404,443 402,943 481,645 480,880 12,595,127 12,456,655 12,061,033 13,228,151 12,727,703 11,874,360 7,020,333 7,126,349 6,882,186 8,274,343 6,699,707 6,452,355 2,633,051 2,836,429 2,884,339 3,205,596 4,267,819 3,962,596 799,187 781,092 866,435 914,874 846,669 762,080 217,995 235,546 243,666 344,964 311,796 374,649 237,313 185,852 399,291 194,004 115,000 99,169 27,367,579 27,769,150 27,162,616 30,216,763 29,378,122 29,006,562 12,100,940 14,095,860 14,594,309 14,568,695 14,026,074 15,241,543 39,468,519 41,865,010 41,756,925 44,785,458 43,404,196 44,248,105 6,572 181,197 214,000 304,818 277,689 237,376 361,100 342,083 376,322 353,571 562,859 530,151 1,780,836 1,463,576 1,470,248 1,437,157 1,473,803 1,493,826 2,519,387 2,609,811 2,732,908 2,979,160 4,790,535 4,818,960 16,874 127,997 120,942 100,014 60,928 80,657 91,810 98,382 134,716 161,527 161,619 170,579 672,298 338,718 154,497 165,064 2,151,740 369,289 424,332 2,147,065 522,574 1,160,602 324,889 239,450 5,873,209 7,308,829 5,726,207 6,661,913 9,804,062 7,940,288 14,617,218 13,781,748 14,168,934 14,452,703 15,043,788 16,567,528 20,490,427 21,090,577 19,895,141 21,114,616 24,847,850 24,507,816 87 CITY OF PARIS, TEXAS Table 2 Changes in Net Assets/Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited Fiscal Year 2012 2013 2014 2015 Net (Expense)/Revenue Governmental Activities (18,443,605) (19,903,515) (19,943,305) (19,077,540) Business -Type Activities 2,843,474 2,501,210 1,940,537 2,352,465 Total Primary Government, Net Expense (15,600,131) (17,402,305) (18,002,768) (16,725,075) General Revenues and Other Changes in Net Assets/Position Governmental Activities: Taxes Property 7,619,472 7,597,667 7,575,840 7,651,005 Sales 5,993,859 6,304,250 6,416,749 7,684,113 Franchise 2,731,097 2,550,447 2,662,604 2,641,537 Hotel Occupancy 498,667 572,150 547,354 594,493 Investment Earnings 55,875 64,386 45,799 51,741 Grants, Donations, and Miscellaneous 1,642,126 615,222 122,703 369,689 Capital Contributions 3,486,508 2,527,979 (10,682) 1,087,474 Gain/Loss on Sale of Capital Assets - - - - Transfers - - - - Total Governmental Activities 22,027,604 20,232,101 17,360,367 20,080,052 Business -Type Activities: Taxes Investment Earnings Contribution Gain/Loss on Sale of Capital Assets Transfers Total Business -Type Activities Total Primary Government Changes in Net Assets/Position Governmental Activities Business -Type Activities Total Primary Government 63,722 (42,124) 83,206 77,787 303,910 550,978 101,000 - (3,486,508) (2,527,979) 10,682 (1,087,474) (3,118,876) (2,019,125) 194,888 (1,009,687) 18,908,728 18,212,976 17,555,255 19,070,365 3,583,999 328,586 (2,582,938) 1,002,512 (275,402) 482,085 2,135,425 1,342,778 $ 3,308,597 $ 810,671 $ (447,513) $ 2,345,290 88 Table 2 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 (21,494,370) (20,460,321) _ (21,436,409) (23,554,850) (19,574,060) (21,066,274) 2,516,278 (314,112) (425,375) (115,992) 1,017,714 1,325,985 (18,978,092) (20,774,433) (21,861,784) (23,670,842) (18,556,346) (19,740,289) 7,748,872 8,175,530 9,170,951 9,358,943 9,338,087 9,561,394 7,051,858 7,233,526 7,317,162 7,369,079 8,245,939 9,196,157 2,502,614 4,211,397 4,315,694 4,305,851 4,714,021 4,253,182 630,545 657,270 662,263 675,158 872,418 1,192,873 80,129 173,656 426,518 581,115 197,203 41,704 315,989 361,125 387,306 272,338 714,470 546,391 651,847 - - - - - (57,026) - (57,940) 49,951 25,246 125,176 1,579,100 382,794 610,955 (523,031) (146,679) (177,451) 20,503,928 21,195,298 22,832,909 22,089,404 23,960,705 24,739,426 291,131 315,872 380,393 577,621 427,723 (51,563) - - - - - 19,321 (1,579,100) (382,794) (610,955) 523,031 146,679 177,451 (1,287,969) (66,922) L230,562) 1,100,652 574,402 145,209 19,215,959 21,128,376 22,602,347 23,190,056 24,535,107 24,884,635 (990,442) 734,977 1,396,500 (1,465,446) 4,386,645 3,673,152 1,228,309 (381,034) (655,937) 984,660 1,592,116 1,471,194 $ 237,867 $ 353,943 $ 740,563 $ (480,786) $ 5,978,761 $ 5,144,346 89 CITY OF PARIS, TEXAS Table 3 Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Unaudited 90 Fiscal Year 2012 2013 2014 2015 General Fund Nonspendable $ 218,117 $ 271,292 $ 233,127 $ 294,776 Restricted - - 271,269 331,086 Unassigned 11,764,593 11,969,203 11,194,101 12,969,124 Total General Fund $ 11,982,710 $ 12,240,495 $ 11,698,497 $ 13,544,986 All Other Governmental Funds Reserved $ - $ - $ - $ - Unreserved, Reported in: Special Revenue Funds - - - - Permanent Funds - - - - Nonspendable 89,632 90,062 90,572 90,800 Restricted 5,332,339 4,858,977 3,031,192 2,726,900 Assigned 456,463 457,471 389,511 267,440 Unassigned - - - - Total All Other Governmental Funds $ 5,878,434 $ 5,406,510 $ 3,511,275 $ 3,085,140 90 Table 3 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 $ 223,911 $ 326,985 $ 418,995 $ 483,575 $ 500,495 $ 181,620 387,950 446,493 498,359 577,814 659,322 710,901 10,227,839 10,849,390 11,753,392 12,390,089 15,990,260 20,596,761 $ 10,839,700 $ 11,622,868 $ 12,670,746 $ 13,451,478 $ 17,150,077 $ 21,489,282 91,565 92,347 93,689 96,007 98,400 98,543 2,525,049 12,009,532 10,991,000 8,108,350 7,512,067 6,633,684 188,569 82,042 299,013 292,571 295,955 - - 57,705 - - - - $ 2,805,183 $ 12,241,626 $ 11,383,702 $ 8,496,928 $ 7,906,422 $ 6,732,227 91 CITY OF PARIS, TEXAS Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Unaudited REVENUES Taxes Licenses and Permits Fines and Fees Use of Money and Property Public Safety Sanitation Health Intergovernmental Other Total Revenues EXPENDITURES Current: General Government Finance Public Safety Public Works Health Department Emergency Medical Service Library Cox Field Airport Other Debt Service: Interest Principal Bond Issuance Costs Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Proceeds of Capital Leases General Obligation Bonds Issued Certificates of Obligation Issued Tax Notes Issued Issue Costs Insurance Recoveries Transfers In Transfers Out Long -Term Debt Issued Payment to Escrow Agent and Premium Sale of General Capital Assets Total Other Financing Sources (Uses) Increase (Decrease) in Reserve for Inventory Net Changes in Fund Balances Table 4 Fiscal Year 2012 2013 2014 $ 16,822,577 S 17,020,156 $ 17,194,419 145,792 154,923 386,775 550,496 624,609 586,429 210,476 142,620 138,629 1,468,917 1,463,210 1,472,278 2,818,196 2,453,270 2,111,439 1,858,092 2,069,494 1,603,165 271,709 317,981 169,261 24,146,255 24,246,263 23,662,395 1,029,702 1,197,486 1,153,686 473,719 393,526 407,443 9,659,131 9,462,148 9,712,876 5,757,456 6,646,804 6,507,603 955,930 1,043,502 916,260 2,302,247 2,132,692 2,127,225 632,515 632,040 707,716 150,848 153,182 97,778 1,434,177 1,560,051 1,548,753 1,080,200 379,241 311,919 424,730 1,185,622 1,226,543 2,649,513 2,407,415 1,332,959 26,550,168 27,193,709 26,050,761 (2,403,913) (2,947,446) (2,388,366) 5,100,935 3,938,899 1,782,291 (1,614,427) (1,410,920) (1,792,973) 4,505,000 - (4,424,955) - 72,108 - 3,486,508 2,680,132 (10,682) 18,599 53,175 (38,165) $ 1,101,194 $ (214,139) S (2,437,213) Debt Service as a Percentage of Noncapital Expenditures 6.44% 6.74% 5.38% 92 Table 4 (Continued) Fiscal Year 2015 2016 2017 2018 2019 2020 2021 $18,457,686 $17,976,072 $20,280,057 $21,447,857 $ 21,672,347 $ 23,106,141 $ 24,155,434 220,696 152,016 155,363 197,920 277,507 259,117 211,668 573,953 515,147 491,880 495,708 480,618 743,152 663,873 137,030 173,004 272,039 561,234 742,644 375,074 212,284 1,462,810 1,474,874 1,463,576 1,470,248 1,437,157 1,462,452 1,470,237 2,383,355 2,519,387 2,609,811 2,614,504 2,991,995 5,117,649 4,806,996 1,662,824 1,096,630 1,463,514 677,072 1,325,665 2,503,393 706,574 224,463 386,853 258,051 346,789 214,502 692,664 524,586 25,122,817 24,293,983 26,994,291 27,811,332 29,142,435 34,259,642 32,751,652 1,076,798 1,301,401 1,288,458 1,180,280 1,230,366 1,371,042 1,178,384 404,567 400,665 398,262 404,443 402,943 481,645 480,880 10,206,584 11,125,560 11,026,655 10,850,538 11,253,953 12,032,115 11,374,139 5,861,079 5,556,359 5,549,270 5,356,374 5,644,019 5,065,867 4,991,668 8,672 - - - - - - 2,240,853 2,366,673 2,535,135 2,670,131 2,845,874 4,058,990 5,200,828 692,290 717,395 697,503 736,513 756,566 723,742 679,491 102,539 110,330 129,269 112,562 210,851 179,631 242,809 1,641,714 1,771,889 1,738,115 1,716,365 1,845,609 1,922,363 1,838,073 280,733 254,304 196,358 447,294 443,205 398,844 389,169 1,077,610 991,899 1,161,513 1,580,682 1,577,803 1,635,788 3,315,266 - - 103,399 4,410 - - - 1,920,359 4,474,952 2,350,010 3,564,942 4,399,885 5,540,837 2,615,698 25,513,798 29,071,427 27,173,947 28,624,534 30,611,074 33,410,864 32,306,405 (390,981) (4,777,444) (179,656) (813,202) (1,468,639) 848,778 445,247 617,114 975,185 - - - - - - - 9,913,399 190,000 - - 1,765,000 - - - - - 1,500,000 - - - - - - - 1,115,000 - - - - - (62,000) (81,992) - - - - 57,835 - - 1,504,281 3,437,300 466,536 994,335 27,678 2,570,626 3,358,332 (416,807) (1,858,200) (83,742) (383,374) (550,708) (2,717,305) (3,535,783) 95,098 - - - 1,799,686 2,554,285 10,296,193 800,961 61,649 (70,865) 103,074 40,517 28,000 151,266 (465,195) 1,319,321 2,771,823 $ 1,470,354 $(2,294,024) $10,219,611 $ 28,276 $ (1,933,834a $ 2,168,099 $ 3,217,070 5.76% 5.07% 5.47% 8.09% 7.71% 7.30% 12.48% 93 CITY OF PARIS, TEXAS Table 5 Property Tax Levies and Collections (1) Last Ten Fiscal Years Unaudited Source: Lamar County Appraisal District Note: (1) Taxes stated are for General Fund and Debt Service Funds. (2) Penalty, interest, and attorney fees not included. 94 Percent Collection of Current of Current Levy Year's Collected Delinquent Fiscal Total Taxes During During Tax Total Roll Year Tax Levy Fiscal Year Fiscal Year Collections Collections 2011 2011-12 $ 7,543,165 $ 7,387,161 97.93% $ - $ 7,387,161 2012 2012-13 7,544,315 7,368,232 97.67 110,036 7,478,268 2013 2013-14 7,498,327 7,309,230 97.48 119,430 7,428,660 2014 2014-15 7,626,530 7,348,250 96.35 111,210 7,459,460 2015 2015-16 7,627,731 7,406,830 97.10 215,544 7,622,374 2016 2016-17 8,093,094 7,940,087 98.11 116,317 8,056,404 2017 2017-18 9,145,965 8,973,214 98.11 62,442 9,035,656 2018 2018-19 9,381,829 9,208,248 98.15 137,647 9,345,895 2019 2019-20 9,332,621 9,047,982 9695 109,970 9,157,952 2020 2020-21 9,592,756 9,321,264 97.17 134,553 9,455,817 Source: Lamar County Appraisal District Note: (1) Taxes stated are for General Fund and Debt Service Funds. (2) Penalty, interest, and attorney fees not included. 94 Ratio Ratio of of Total Delinquent Collections Outstanding Taxes To Total Delinquent To Total Tax Levy Taxes Tax Levy 97.93 $ 156,004 2.07 99.14 190,166 2.52 99.07 186,382 2.48 97.81 279,144 3.66 99.93 221,880 2.91 99.54 153,007 1.89 98.79 172,751 1.89 99.61 173,582 1.85 98.13 284,639 3.05 98.57 271,491 2.83 2 Table 5 (Continued) w NO a\ 00 O 00 O C> 0 <D CD m O = C) C> 0 4= 00 ON t- 00 — (ON CN r- �o It 1= C) (D od C) r- C4 (T 00 C� 00 — C'4 00 = m 00 — C', tn wl �o CD \0 00 IT 40 40 Ct 00 ON 00 C14 Ci R Rt Ci (R vi R Ci Ci 0T <R q C) C> OC) C) C) o O 4D (OS 6q Qq 64 60 6011) 69 609 60 69 oq 64 00000 OoO C> <D C> C> Co <D a 0Co %lo IT 4= m r- IT = IT IT CD IT cv 00 t- \0 I'D t- 00 to cn \0 o \0 Q Q — t- %D 00 In \0 00 't No �10 "tt Ili Vi Ci O 0 Ci ei OT "i CT (:T Ca O Cl 0 0 C> 0 C>0 a 0 0 C> 0 C) 0 64 (Is 44 604 GAI oq 60 C09 64 os oq os —;s " O O 0 C> 0 (D 0 C> C) 0 C) C) O Cn rn ON 1* wl (D 0 0 0 CD 0 0 0 C) 00 M 0 to wl 0 C. 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"it et Cli Itt R 1-: "i q q C4 tii os so tn 000 C> C) 000 Cl 0 C14 d0 0\ 00 M — Q C> C> C> C) = (D — o— W) 0T " " 0 " wl <> — = �0 \0 Os — 0 00 wl IT It 00 Icr t- 00 00 (n Wi cl nt q 04 (04 604 64 6s &1 64 GS 09 6's 69 64 CD 00 0 W) W) C) 0 qT v7 oo 00 -0 tn tn 0 0 CD C> — — t- I r, (2-,— : C14 en r- 00 in \0 CD 00 N oo 00 q In ; R Nt cl d a -i Cli CI 00 . 0 eq 64 &S GIs GO) 09 609 64 64 614 6-9 os oq 000 ao C> C> Cl a 0 (Z = 000 Q cq rn Cq O C> Q 0 as Q kn tn 0 0 O0 OHO+ C\ a" wl 0 as 0CD\0 C14 C\ t- tn cli , 0 00 eq ON ON (i IR VNV: g :2 Cli IR "i os 09 V) oq 604 9% 609 Ge 6e 601) 4) CA m cn C/3a3 o 0— 0 3 21 0 Cf) 0 z w NO a\ Roll 2011 2012 2013 2014 2015 2016 2017 20I8 2019 2020 Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Sources: Lamar County Appraisal District CITY 4F PARIS, TEXAS Assessed and Estimated Actual Value of Property Last Ten Fiscal Years Unaudited Real Property Estimated Assessed Actual Value Value Personal Property Estimated Assessed Actual Value Value $ 918,495,080 $1,402,956,164 $ 543,332,657 $ 623,174,818 931,939,433 1,424,800,859 559,431,805 628,115,774 1,033,357,277 1,438,785,698 469,901,615 654,358,864 1,007,593,690 1,472,220,698 522,773,397 763,567,027 1,006,810,741 1,490,882,796 526,923,827 780,316,817 1,148,246,077 1,725,298,577 479,151,390 720,199,051 1,206,992,530 1,773,796,952 474,754,769 697,701,527 1,236,252,824 1,807,476,750 495,983,817 725,129,690 1,295,418,472 1,870,747,790 498,742,817 720,268,510 1,391,511,659 1,933,860,434 532,519,786 740,100,180 97 Table 7 Table 7 (Continued) 98 Total Assessed Estimated Value as a Assessed Actual Percentage of Total Direct Exemptions Value Value Actual Value Tax Rate $ 564,303,245 $1,461,827,737 $2,026,1301982 72.15% $ 0.52000 561,543,395 1,491,371,238 2,052,916,633 72.65 0.52000 589,885,670 1,503,258,892 2,093,144,562 71.82 0.50195 705,420,637 1,530,367,087 2,235,787,725 68.45 0.50195 737,465,045 1,533,734,568 2,271,199,613 67.53 0.50195 818,100,161 1,627,397,467 2,445,497,628 66.55 0.50195 789,751,180 1,681,747,299 2,471,498,479 68.04 0.55195 800,369,799 1,732,236,641 2,532,606,440 68.40 0.55195 796,855,011 1,794,161,289 2,591,016,300 69.25 0.51608 749,929,169 1,924,031,445 2,673,960,614 71.95 0.48078 98 CITY OF PARIS, TEXAS Principal Property Taxpayers September 30, 2021 and 2012 Unaudited Table 8 Source: Lamar County Appraisal District 99 2021 Percentage of Total Taxable Freeze Adjusted Assessed Taxable Taxpayer Type of Business Value Rank Assessed Value La Frontera Holdings LLC (Lamar Power Partners) Electric Utility $ 347,396,800 1 18.06% Campbell Soup Company - A Food Manufacturer 176,136,898 2 9.15% Kimberly-Clark Corporation - A Disposable Diapers 78,834,285 3 4.10% Essent PRMC, LP A Hospital 46,383,270 4 2A]% Oncor Electric Delivery Electric Utility 34,817,290 5 1.81% American Spiral Weld III Inc. Pipe Manufacturer 22,500,643 6 1.17% Potter Industries Glass Manufacturer 15,910,093 7 0.83% Huhtamaki Inc Packaging Mfg. 13,878,326 8 0.72% Alpha Lake Limited Shopping Center 12,714,750 9 0.66% Atmos Energy Gas Utility 12,439,370 10 0.65% Campbell Soup Company - B Warehouse - 0.0011/0 Paris Generation, LP Electric Utility 0.000/0 Silgan Can Company Can Manufacturer 0.00% Kimberly-Clark Corporation - B Warehouse 0.00% Paris Regional Medical Center - B Warehouse - 0.00% Totals $ 761,011,725 39.56% Source: Lamar County Appraisal District 99 2012 Percentage Taxable of Total Assessed Taxable Value Rank Assessed Value 205,185,800 1 13.76% 53,439,580 3 3.58% 116,106,927 2 7.79% 31,732,500 5 2.13% 20,053,960 7 1,34% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% 34,669,630 4 2.32% 22,581,100 6 1.51% 14,987,410 8 1.00% 11,314,260 9 0.76% 10,402,160 10 0.70% 520,473,327 34.89% 100 Table 8 (Continued) CITY OF PARIS, TEXAS Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita Last Ten Fiscal Years Unaudited Sources: Lamar County Appraisal District City of Paris Gross Less Debt General Service Bonded Debt Funds Ratio of Net General Bonded Debt To Net General Assessed Bonded Debt Value $ 10,750,600 $ 2,797,611 Taxable Fiscal Estimated Assessed Year Population Value 1,432,199 2011-12 25,337 $ 1,461,827,737 2012-13 25,082 1,491,371,238 2013-14 25,171 1,503,258,892 2014-15 25,200 1,519,380,526 2015-16 25,400 1,627,397,467 2016-17 25,425 1,681,747,299 2017-18 25,450 1,732,236,641 2018-19 25,450 1,794,161,289 2019-20 25,450 1,876,141,460 2020-21 24,476 2,228,001,573 Sources: Lamar County Appraisal District City of Paris Gross Less Debt General Service Bonded Debt Funds Ratio of Net General Bonded Debt To Net General Assessed Bonded Debt Value $ 10,750,600 $ 2,797,611 $ 7,952,989 0.54 9,485,800 2,318,294 7,167,506 0.48 8,310,000 1,432,199 6,877,801 0.46 7,285,000 1,117,793 6,167,207 0.41 6,442,624 1,087,664 5,354,960 0.33 15,461,503 898,022 14,563,481 0.87 14,306,032 1,073,917 13,232,115 0.76 12,977,671 1,103,061 11,874,610 0.67 11,818,173 1,196,122 10,622,051 0.56 11,420,000 1,272,171 10,147,829 0.46 101 Table 9 Net General Bonded Debt Per Capita $ 313.89 285.76 273.24 244.73 210.83 572.80 51993 466.59 417.37 414.60 CITY OF PARIS, TEXAS Ratio of Outstanding Debt by Type Last Ten Fiscal Years Unaudited Table 10 Sources: City Finance Office Samco Capital Markets, Inc. Bureau of Economic Analysis 102 Governmental Activities Business -Type Activities General Fiscal Obligation Capital Utility Rate Capital Year Bonds Leases Other Supported Debt Leases Other 2012 $ 10,750,600 $ - $ - $ 7,764,400 $ - $ - 2013 9,485,800 - - 43,239,200 - - 2014 8,310,000 - - 40,795,000 - - 2015 7,285,000 617,114 - 38,545,000 - - 2016 6,442,624 1,538,459 - 37,997,715 - - 2017 15,461,503 1,397,929 - 45,175,173 - - 2018 14,306,032 1,253,181 - 44,264,589 - - 2019 12,840,000 1,104,090 - 41,075,000 - - 2020 12,975,000 950,526 - 38,875,000 - - 2021 11,830,000 792,453 955,000 80,430,000 - - Sources: City Finance Office Samco Capital Markets, Inc. Bureau of Economic Analysis 102 Total Percentage Primary of Personal Per Government Income Capita 18,515,000 1.06 $ 733 52,725,000 2.92 2,081 49,105,000 2.64 1,951 46,447,114 2.49 1,843 45,978,798 2.47 1,810 62,034,605 3.23 2,440 59,823,802 2.91 2,304 55,019,090 2.73 2,180 52,800,526 2.47 2,085 94,007,453 4.03 3,841 103 Table 10 (Continued) Taxing Jurisdiction CITY OF PARIS, TEXAS Direct and Overlapping Governmental Activities Debt September 30, 2021 Unaudited Table I I General Percent Amount Obligation Applicable Applicable Bonded Debt to to Outstanding Government Government Lamar County $ 6,705,000 62.75% $ 4,207,387 Paris Independent School District 42,350,000 49.30 20,878,550 Chisum Independent School District 26,130,000 47.75 12,477,075 North Lamar Independent School District - 58.23 - Subtotal Overlapping Debt 75,185,000 37,563,012 City of Paris (includes General Obligation Debt and Capital Leases) 13,577,453 100.00 13,577,453 Total Direct and Overlapping Debt Per Capita Direct and Overlapping Funded Debt $ 88,762,453 3,627 Sources: Outstanding debt and applicable percentages provided by each governmental unit. $ 51,140,465_ Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is home by the property taxpayers of the City of Paris. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 104 2,089 CITY OF PARIS, TEXAS Table 12 Legal Debt Margin Information September 30, 2021 Unaudited The maximum tax rate permitted by Article XI, Section 5 of the State of Texas constitution is $2.50 per $100 of assessed valuation. Consequently, no legal debt margin can be calculated. The state attorney general has traditionally allowed up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of $.48078 per $100 valuation for the fiscal year ended September 30, 2021. 105 CITY OF PARIS, TEXAS Table 13 Revenue Pledged Coverage - Water and Sewer Revenue Bonds Last Ten Fiscal Years Unaudited Notes: (1)* Gross Revenues = Operating and Nonoperating Revenue of the Water and Sewer Fund Excluding Contribution Revenue and Premium Amortization (2)** Operating Expenses Excluding Depreciation (3)*** Agent Fees Not Included 106 Net Revenue Average Remaining Available Debt Service Requirements Fiscal Gross Operating For Debt Percent Year Revenues* Ex2enses** Service Principal - Interest Total*** Coverage 2011-12 $ 13,916,163 $7,445,178 $6,470,985 S - $ - $ - N/A 2012-13 13,963,624 7,578,446 6,385,178 - - - N/A 2013-14 13,964,534 7,342,744 6,621,790 - - - N/A 2014-15 14,359,751 7,248,302 7,111,449 - - - N/A 2015-16 14,894,489 7,834,768 7,059,721 - - - N/A 2016-17 14,097,620 9,902,805 4,194,815 - - - N/A 2017-18 14,549,327 9,922,088 4,627,239 - - - N/A 2018-19 15,030,324 10,182,731 4,847,593 - - - N/A 2019-20 15,043,788 9,602,622 5,441,166 - - - N/A 2020-21 16,768,090 10,440,367 6,327,723 - - - N/A Notes: (1)* Gross Revenues = Operating and Nonoperating Revenue of the Water and Sewer Fund Excluding Contribution Revenue and Premium Amortization (2)** Operating Expenses Excluding Depreciation (3)*** Agent Fees Not Included 106 CITY OF PARIS, TEXAS Table 14 Demographic and Economic Statistics Last Ten Calendar Years Unaudited Paris, TX (1) Includes Paris Independent School District, North Lamar Independent School District, Chisurn Independent School District, and Paris Junior College Sources: Paris Independent School District - 3,717 North Lamar Independent School District - 2,261 Chisurn Independent School District - 1,062 Paris Junior College - 4,421 Bureau of Economic Analysis US Census Bureau 107 Paris, TX Micropolitan Paris, TX Paris, TX Micropolitan Service Area Micropolitan Micropolitan Service Area Per Capita Service Area Percent Calendar Service Area Personal Personal Median School Unemployment Year Population Income Income Age Enrollments (1) Rate 2011 50,074 $ 1,657,062,000 $ 33,092 39.9 12,865 8.5 2012 49,811 1,750,363,000 35,140 39.0 12,671 7.9 2013 49,426 1,804,479,000 36,509 37.1 12,377 7.6 2014 49,523 1,859,083,000 37,540 40.4 12,414 6.1 2015 49,440 1,857,879,000 37,578 40.5 12,121 5.4 2016 49,791 1,917,848,000 38,518 40.6 12,180 4.9 2017 49,587 2,013,704,000 40,610 40.6 12,758 3.5 2018 49,728 2,027,062,464 40,763 41.0 12,307 3.3 2019 49,859 2,147,064,000 43,063 37.8 11,482 6.8 2020 50,088 2,330,995,344 46,538 40.7 11,461 6.5 (1) Includes Paris Independent School District, North Lamar Independent School District, Chisurn Independent School District, and Paris Junior College Sources: Paris Independent School District - 3,717 North Lamar Independent School District - 2,261 Chisurn Independent School District - 1,062 Paris Junior College - 4,421 Bureau of Economic Analysis US Census Bureau 107 CITY OF PARIS, TEXAS Principal Employers Fiscal Years End 2021 and 2012 Unaudited Table 15 Source: U.S. Department of Labor PEDC Bureau of Labor Statistics Additional Information: September 30, 2021 September 30, 2012 Paris ISD 618 Percentage 469 City of Paris Percentage Paris Junior College 205 Chistun ISD of Total Lamar County 196 of Total 1,978 City city Taxpayer Employees Rank Employment Employees Rank Employment Paris Regional Medical Center 900 1 4.07% 875 1 4.65% Campbell Soup Company 700 2 3.16% 758 2 4,03% Kimberly-Clark Corporation 692 3 3.13% 732 3 3.89% The Results Company* 419 4 1.89% - 0.00% We Pack Logistics, Inc. 382 5 1.73% 300 5 1.59% J. Skinner Baking Company** 267 6 1.21% - 0.00% Huhtamaki*** 208 7 0.94% 154 7 0.82% RK Hall Construction LTD 200 8 0.900/0 250 6 1.33% Delco Trailers 140 9 0.63% - 0.00% Silgan Can Company 90 to 0.41% 87 9 0.46% Turner Industries - 0.000/0 600 4 3.19% HWH - We Build 0.00% 115 8 0.61% T&J Machinery 0.000/0 79 10 0.42% Totals 3,998 18.07% -__3,,.950 20.99% Source: U.S. Department of Labor PEDC Bureau of Labor Statistics Additional Information: Public Employers: Paris ISD 618 North Lamar ISD 469 City of Paris 314 Paris Junior College 205 Chistun ISD 176 Lamar County 196 Total 1,978 Notes: TCIM in 2012 Sara Lee in 2012 (***) Paris Packaging in 2012 108 CITY OF PARIS, TEXAS Operating indicators by Function Last Ten Fiscal Years Unaudited GOVERNMENT: Date of Incorporation - 1836 Current Charter - Adopted November 2, 1948 FACILITIES: Airports: Number of Airports Fire Protection: Number of Stations Number of Fire Hydrants Number of Employees (certified) Employees Per 1,000 Population Libraries: Number of Libraries Number of Volumes Circularization of Materials Circulation Per Capita Library Cards in Force Police Protection: Number of Stations Number of Employees (certified) Employees Per 1,000 Population Parks and Recreation: Park Acres Developed Park Acres Undeveloped City Parks Streets: Paved Lanes - Miles Unpaved Streets - Miles WATER AND SEWER UTILITY: Average Daily Water Consumption - Gallons Maximum Day's Water Consumption - Gallons Annual Water Consumption - Gallons Water Mains - Miles Water Connections - Metered Sewer Mains - Miles Area Miles Number of Full -Time Employees Sources: Various City of Paris Departments Table 16 Fiscal Year 2012 2013 2014 2015 I I 1 1 3 3 3 3 1,217 1,240 1,262 1,299 51 51 51 51 2.01 2.01 2.03 2.02 1 1 1 1 85,357 82,878 82,832 81,893 136,286 127,053 127,002 127,824 5.37 5.01 5.06 5.07 14,563 14,896 16,519 15,507 1 1 1 1 62 62 60 60 2.44 2.44 2.39 2.38 87 87 87 87 221 221 221 221 24 24 24 24 160 160 160 160 3 3 3 3 11,560,000 21,010,000 4,234,583,000 183 9,966 188 ��61 325 109 11,400,000 20,764,000 4,177,171,000 183 9,816 188 �I%V 325 11,472,271 17,201,000 4,187,379,000 183 9,819 189 39.18 326.5 11,006,721 20,662,000 4,017,453,000 185 10,024 209 39.18 327 Table 16 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 1 1 I 1 1 1 3 3 3 3 3 3 1,313 1,333 1,357 1,367 1,408 1,399 51 51 51 51 51 51 2.01 2.00 2.00 2.00 2.00 2.08 1 1 1 1 1 1 84,162 85,630 72,288 81,185 79,821 81,739 119,265 114,611 103,389 99,239 81,249 86,120 4.69 4.50 4.06 390 3.19 3.51 I3,551 14,312 10,441 8,734 8,424 9,337 1 1 1 1 1 1 60 60 57 57 57 57 2.36 2.35 2.24 2.24 2.24 2.32 87 87 87 87 87 87 221 221 221 221 221 221 24 24 24 24 24 24 171 171 171 174 174 174 3 3 3 3 3 3 10,701,294 13,241,942 10,759,444 10,775,920 11,138,000 11,740,173 17,983,000 18,493,000 18,137,000 19,202,000 17,747,000 19,386,000 3,977,369,000 4,833,309,000 3,927,197,000 3,937,831,000 4,078,053,000 4,285,163,000 185 185 185 185 185 185 9,995 9,766 9,698 9,679 9,810 9,754 209 209 209 209 209 209 38.02 38.02 38.02 38.02 38.02 38.02 328 330 331.5 333 322 314 110 Function: Public Safety Police Stations Patrol Units Fire Stations Sanitation Collection Trucks Highways and Streets Streets (miles) Streetlights Traffic Signals* Culture and Recreation Park Acreage Swimming Pools - Municipal Tennis Courts Community Centers Water Water Mains (miles) Fire Hydrants Maximum Daily Capacity (thousands of gallons) Sewer Sanitary Sewers (miles) Maximum Daily Treatment Capacity (thousands of gallons) CITY OF PARIS, TEXAS Capital Asset Statistics by Function Last Ten Fiscal Years Unaudited Fiscal Year Table 17 2012 2013 2014 2015 I I I I 10 10 10 10 3 3 3 3 7 6 6 6 163 163 163 174 2,220 2,223 2,225 2,228 286 286 286 286 1 1 1 1 14 14 14 14 1 1 1 1 183 183 183 185 1,217 1,240 1,262 1,299 36,000 36,000 36,000 36,000 189 189 189 209 7,250 7,250 7,250 7,250 Source: Various City Departments * City has none. All inside the City limits belong to the State of Texas. III Table 17 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 1 1 1 1 1 1 10 10 10 10 10 10 3 3 3 3 3 3 6 6 6 6 6 6 174 174 174 174 174 174 2,228 2,230 2,231 2,235 2,235 2,235 286 286 286 308 308 308 1 1 1 1 1 1 14 14 14 14 14 14 1 1 1 1 1 1 185 185 185 185 185 185 1,313 1,333 1,357 1,367 1,408 1,399 36,000 36,000 36,000 36,000 36,000 36,000 209 209 209 209 209 209 7,250 7,250 7,250 7,250 7,250 7,250 112 CITY OF PARIS, TEXAS Building Permits at Market Value Last Ten Fiscal Years Unaudited Sources: City of Paris Community Development Department 113 Table 18 Residential Construction Value Total Construction Value Commercial $ 8,596,610 Property Value Commercial Construction Residential Fiscal Year Units Value Units 2012 13 $ 7,836,610 10 2013 15 9,653,725 24 2014 10 5,336,150 16 2015 14 61,243,705 10 2016 59 7,838,210 44 2017 18 12,653,657 21 2018 33 39,273,020 31 2019 15 64,446,766 25 2020 21 15,636,180 36 2021 8 7,995,151 17 Sources: City of Paris Community Development Department 113 Table 18 Residential Construction Value Total Construction Value $ 760,000 $ 8,596,610 2,171,613 11,825,338 1,924,218 7,260,368 823,430 62,067,135 3,252,018 11,090,228 3,914,081 16,567,738 4,101,770 43,374,790 3,744,359 68,191,125 5,366,500 21,002,680 1,908,787 9,903,938 CITY OF PARIS, TEXAS Table 19 Full -Time Equivalent City Government Employees by Function Last Ten Fiscal Years Unaudited Includes related grant employees. Seasonal employees not included. Source: City of Paris Finance Department 114 Fiscal Year 2012 2013 2014 2015 Function: Manager 3.0 3.0 3.0 3.0 Attorney 4.0 4.0 4.0 4.0 Court Clerk 4.0 4.0 4.0 4.0 City Clerk 3.0 3.0 2.0 2.0 Finance 5.0 5.0 5.0 5.0 Police* 85.5 85.5 83.0 83.0 Fire 52.0 52.0 57.0 57A Community Development 7.5 7.5 5.5 4.5 Engineering 6.5 6.5 7.5 7.5 Public Works 3.0 3.0 3.0 2.0 Parks & ROW 10.0 10.0 10.0 11.0 Sanitation 12.0 12.0 12.0 12.0 Streets 15.0 15.0 15.0 15.0 Traffic & Lighting 2.0 2.0 2.0 2.0 Garage 5.5 5.5 5.5 5.5 EMS 26.0 26.0 26.0 26.0 Library 10.5 10.5 10.5 10.5 Warehouse 2.0 2.0 2.0 2.0 Water Billing 8.0 8.0 8.0 8.0 Water Treatment Plant 15.5 15.5 15.5 15.5 Water Distribution 10.5 10.5 11.0 11.0 Waste Water Collection 7.5 7.5 7.5 8.5 Waste Water Treatment Plant 22.5 22.5 22.5 22.5 Lift Stations 3.0 3.0 3.0 3.0 Information Technology 2.0 2.0 2.0 2.5 Totals 325.5 325.5 326.5 327.0 Includes related grant employees. Seasonal employees not included. Source: City of Paris Finance Department 114 Table 19 (Continued) Fiscal Year 2016 2017 2018 2019 2020 2021 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 2.0 2.0 2.0 2.0 4.0 4.0 4.0 4.0 4.0 4.0 2.0 2.0 2.0 2.0 2.0 2.0 5.0 5.0 5.0 5.0 5.0 5.0 83.0 83.0 83.5 84.0 83.0 77.5 57.0 58.0 58.0 58.0 59.0 52.0 4.5 4.5 4.0 4.0 5.5 15.0 7.5 7.5 6.0 6.0 4.5 3.0 2.0 2.0 3.0 3.0 3.0 3.0 11.0 12.0 12.0 12.0 11.0 10.0 12.0 12.0 11.0 12.0 8.0 6.0 15.0 15.0 17.0 17.0 11.0 12.0 2.0 2.0 2.0 2.0 1.0 1.0 5.5 5.5 6.0 6.0 5.5 6.0 26.0 26.0 26.0 27.0 27.0 27.0 10.5 10.5 10.5 10.5 10.5 10.5 2.0 2.0 2.0 2.0 2.0 2.0 8.0 8.0 8.0 8.0 8.0 8.0 16.5 16.5 16.5 17.5 18.0 18.0 11.0 11.0 12.5 12.5 9.0 11.0 8.5 8.5 8.5 8.0 8.0 8.0 22.5 22.5 22.5 21.5 26.0 21.0 3.0 3.0 3.0 3.0 3.0 3.0 2.5 2.5 3.5 3.0 3.0 3.0 328.0 330.0 331.5 333.0 322.0 314.0 115 CONTINUING DISCLOSURE INFORMATION CONTINUING DISCLOSURE INFORMATION FOR CITY OF PARIS, TEXAS UNAUDITED ASSESSED VALUATION $ 405,000 TABLE 1 2021-2022 Actual Market Value of Taxable Property (100% of Actual) General Obligation Bonds, Series 2013 $ 3,180,380,294 Less Exemptions: 6,900,000 General Obligation Bonds, Series 2017 Local, Optional Over -65 and/or Disabled Homestead Exemptions $ 45,303,916 995,000 Disabled and Deceased Veterans' Exemptions 12,132,564 General Obligation Refunding Bonds, Series 2020 Productivity Loss 19,992,060 955,000 Personal Use of Business Vehicle 303,980 Total Gross General Obligation Debt Principal Outstanding: Freeport 91,612,816 1,272,171 Pollution Control / Solar 62,080,048 4.55% Abatement Loss 259,158,157 0.62% Cap Loss (10%) 79,061,864 2,049,030,824 Historical 1 Other 21,125,710 24,476 Totally Exempt Property 361,607,606 83,716 Total Exemptions $ 952,378,721 2021-2022 Net Taxable Assessed Valuation $ 2,228,001,573 Frozen Taxable Value and Transfer Adjustment (178,970,749) Freeze Adjusted Net Taxable Assessed Valuation $ 2,049,030,824 Source: Lamar County Appraisal District and the Issuer. GENERAL OBLIGATION BONDED DEBT PRINCIPAL TABLE 2 General Obligation Debt Principal Outstanding: (As of September 30, 2021) General Obligation Refunding Bonds, Series 2012 $ 405,000 Combination Tax and Revenue Certificates of Obligation, Series 2013 (TWDB) 1,710,000 General Obligation Bonds, Series 2013 27,065,000 General Obligation Bonds, Series 2016 6,900,000 General Obligation Bonds, Series 2017 8,200,000 General Obligation Bonds, Series 2018 995,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2020 1,365,000 General Obligation Refunding Bonds, Series 2020 1,765,000 Tax Notes, Series 2020 955,000 Tax and Revenue Certificates of Obligation, Series 2021 43,855,000 Total Gross General Obligation Debt Principal Outstanding: 93,215,000 Less: Self -Supporting General Obligation Debt Principal Combination Tax and Revenue Certificates of Obligation, Series 2013 (TWDB) (100% WS) 1,710,000 General Obligation Bonds, Series 2013 (100% WS) 27,065,000 General Obligation Bonds, Series 2016 (100% WS) 6,900,000 General Obligation Bonds, Series 2018 (86% WS) 900,000 Tax and Revenue Certificates of Obligation, Series 2021 43,855,000 Total Self -Supporting General Obligation Debt Outstanding Following the Issuance of the Bonds: 80,430,000 Total Net General Obligation Debt Principal Outstanding Following the Issuance of the Bonds: $ 12,785.000 General Obligation Interest and Sinking Fund Balance as of September 30, 2021 $ 1,272,171 Ratio of Gross General Obligation Debt Principal to 2020-21 Freeze Adjusted Net Taxable Assessed Valuation 4.55% Ratio of Net General Obligation Debt Principal to 2020-21 Freeze Adjusted Net Taxable Assessed Valuation 0.62% 2020-21 Freeze Adjusted Net Taxable Assessed Valuation $ 2,049,030,824 Population: 1980 - 25,498; 1990 - 24,699; 2000 - 25,898; 2010 - 25,171 Current (Estimate) 24,476 Per Capita 2020-2021 Freeze Adjusted Net Taxable Assessed Valuation $ 83,716 Per Capita Gross General Obligation Debt Principal $ 3,808 Per Capita Net General Obligation Debt Principal $ 522 C4 -9 C4 81 Go ti co lZ ocr C4 m m m a� w w r, In R nNi 2 h dr � S; A V, e w et r% V% fn Ot R h w en leln, 00 !!f No al ;; 00 W Iq 'n In " Z w ONOL m %0 -It r, V 0 el C% OCL ri elL n fli 't m %G M wC�ppS 4A X± 0, 1r Of a 00 Vr %6 ae 0 M 00 0, 'D 00 rl fn C% ri CIL 't C Ott Cl+ I O tn M Iq In w %A L* 4n I-- r- r, W; O .n M vi en w N 14 00 fR 69 C710 Ir 0 *q 0 C4 wi 0i ci 6 eq 9 C4 c, 0 8 m w O w cc M N N w <g 0 'D *1 C GT O v !Do C4 It co eMt r, Cl W CD rl G 8 'R g m p r ci It Ot C, CL It lak %n e% Iq "R 05 0 00 0� r-. o r. cp� cr ce n en C4 Go M IT C, �o -A �n V M m 59 iH as 0 -n C4 0 a, C) In 0 C* In CD C, m W M Q M Go In 4Vt n m m q m tn lk t Z R 8� w ,It CL ol:t cl� C% 't 1% 'It. a, r- r- C* a Ch O+ m ;z "0 'enn 00 CM4[n Owl 00 G w In 00 tn M 00 CD cr m t- 06 Wrn C, h N m 'A m 00 C% to 64 ti 15 9 8 �R I �R 3 �2 -,22 w Wi C% m f% W. -� I oc� Iq al� —. V% rl�. Iq r% 'A co m 'd o rz 00 00 C; r``tl `wG fO+� dP'9i t�`�, Oo O0 �O �O Ot 00 Q� oo M T O M s %�O,- 8 00 W1 wl 00 P -e r- lw %0 In m m ci Cq ri 8- 6q eq 41 2.1 O> o b o Q 0 SO le, A .1 49 B PRINCIPAL TAXPAYERS 2020-21(UNAUDITED) TABLE Name La Frontera Holdings LLC Campbell Soup Kimberly Clark Corporation Essent PRMC LP Oncor Electric Delivery Company American Spiral Weld 111, Inc Potter Industries LLC Huhtamaki Inc. Alpha Lake LTD Atmost Energy Total Based on a 2021 Freeze Adjusted Net Taxable Assessed Valuation of $ 2,049,030,824 Source: Lamar County Appraisal District PROPERTY TAX RATES AND COLLECTIONS (UNAUDITED) TABLES Tax Net Taxable % of Tax % Collections Tota12020 Year 2020 Net Taxable Assessed Type of Pronerty Assessed Valuation Valuation Electric Utility $ 347,396,800 16.95% Food Manufacturing 176,136,898 8.60% Disposable Diaper Mfg. 78,834,285 3.85% Health Care Services/Hospital 46,383,270 2.26% utility 34,817,290 1.70% Pipe Manufacturer 22,500,643 1.100/0 Manufacturing 15,910,093 0.78% Packaging Manufacturing 13,878,326 0.68% Shopping Center 12,714,750 0.62% Gas Utility 12,439,370 0,61% 2015 $ 761,011,725 _ _ 37.14% Based on a 2021 Freeze Adjusted Net Taxable Assessed Valuation of $ 2,049,030,824 Source: Lamar County Appraisal District PROPERTY TAX RATES AND COLLECTIONS (UNAUDITED) TABLES Tax Net Taxable Tax Tax % Collections 2016-17 Year Year Assessed Valuation Rate Levy Current Total Ended 2011 $ 1,359,521,473 0.52000 $ 7,543,165 97.93 99.41 9-30-12 2012 1,385,188,151 0.51107 7,544,315 97.67 99.22 9-30-13 2013 1,493,839,431 0.50195 7,498,327 97.48 100.03 9-30-14 2014 1,519,380,525 0.50195 7,626,530 96.35 99.17 9-30-15 2015 1,607,003,070 0.50195 7,627,731 97.10 99.90 9-30-16 2016 1,510,271,195 0.50195 8,093,094 98.11 (b) 99.52 (b) 9-30-17 2017 1,556,621,932 0.55195 9,145,965 98.11 99.51 9-30-18 2018 1,607,003,070 0.55195 9,381,829 98.15 100.71 9-30-19 2019 1,654,553,439 0.51608 9,332,621 96.95 98.95 9-30-20 2020 1,924,031,445 0.48078 9,592,756 97.17 98.57 9-30-21 Note. Although "Total" tax collection percentages In this table Include delinquent tax collections, they are allocated to the year they were originally levied Instead of theyear In which they were collected. Certified Values may change during the tax year due to various supplements and protests, and valuations reported on a different date may not match those shown on this table. Financial Report. Valuations far tax years 2011-2020 represent Freeze Adjusted Net Taxable Valuations. Current Fiscal Year collections are as ofSeptember 30, 2021 (Unaudited). Source: The Lamar County Appraisal District, the City's 2020 Comprehensive Annual Financial Report and additional Information from the City, TAX RATE DISTRIBUTION (UNAUDITED) TABLE 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 General Fund $ 0.37357 $ 0.39788 $ 0.40868 $ 0.43831 $ 0.44248 $ 0.42440 1 & S Fund 0.08016 0.08290 0.10740 0.11364 0.10947 0.07752 TOTAL $ 0.45373 $ 0.48078 $ 0.51608 $ 0.55195 $ 0.55195 $ 0.50192 Sources: Texas Municipal Report published by the Municipal Advisory Council of Texas and the Lamar County Appraisal District. 118 MUNICIPAL SALES TAX TABLE 7 UNAUDITED The Issuer has adopted the provisions of Chapter 321, as amended, Texas Tax Cale. In addition, some issuers are subject to a property tax relief and/or an economic and industrial development tax. The voters of the City approved the imposition of a 114 cent additional sales tax to be used for property tax reduction and a 1/4 cent sales tax for economic development purposes. Levy of the additional sales taxes began on October 1, 1993, and the City received its first payment in December, 1993. Collections on a calendar year basis are as follows: * Sales taxes increased from the prior year due to a one time collection of an amount due from a prior period. This collection alone would have provided the City a 13.50% increase in sales taxes. The remaining increase is consistent with the expected sales tax revenues due to the recovering local economy. Source: State Comptroller of Public Accounts Website. 119 City Collections as ($) Equivalent of Calendar Total 1.00% 0.25% % of Ad Valorem Ad Valorem 0.25% Year Collected City Prop Tax Red Tax Levy Tax Rate EDC 2008 $ 7,051,372 $ 4,700,915 $ 1,175,229 73.89 0.41 $ 1,175,2F9- 2009 7,591,224 5,060,816 1,265,204 80.72 0.42 1,265,204 2010 7,029,392 4,686,262 1,171,565 75.12 0.39 1,171,565 2011 7,202,519 4,801,679 1,200,420 78.44 0.41 1,200,420 2012 7,268,103 4,845,402 1,211,351 80.29 0.42 1,211,351 2013 7,624,480 5,082,987 1,270,747 84.22 0.43 1,270,747 2014 8,786,209 * 5,857,473 1,464,368 97.65 0.49 1,464,368 2015 8,173,696 5,449,131 1,362,283 89.30 0.45 1,362,283 2016 8,472,647 5,648,431 1,412,108 92.56 0.46 1,412,108 2017 8,689,014 5,792,676 1,448,169 89.47 0.45 1,448,169 2018 8,827,668 5,885,112 1,471,278 90.74 0.50 1,471,278 2019 8,921,837 5,947,891 1,486,973 79.25 0.43 1,486,973 2020 9,950,289 6,633,526 1,658,381 87.90 0.45 1,658,381 2021 11,048,083 7,365,389 1,841,347 95.81 0.47 1,841,347 * Sales taxes increased from the prior year due to a one time collection of an amount due from a prior period. This collection alone would have provided the City a 13.50% increase in sales taxes. The remaining increase is consistent with the expected sales tax revenues due to the recovering local economy. Source: State Comptroller of Public Accounts Website. 119 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND ANALYSIS OF CHANGES IN FUND BALANCES UNAUDITED 1,613,946 1,779,229 1,616,363 TABLES 1,666,051 Public Safety Fiscal Year Ended September 30 12,005,945 11,218,944 2021 2020 2019 2018 2017 Revenues: 5,356,374 6,415,221 Health 5,199,358 4,022,732 Ad Valorem Taxes $ 7,971,838 $ 7,380,958 $ 7,552,516 $ 7,357,425 $ 6,933,981 Sales Taxes 9,196,157 8,245,939 7,369,079 7,317,162 7,233,526 Franchise Tax 4,253,182 4,714,021 4,305,851 4,315,694 4,211,397 Hotel Occupancy Taxes 881,259 643,417 675,158 662,263 657,270 Licenses and Permits 211,668 259,117 277,507 197,920 155,363 Fines and Fees 615,721 724,259 434,016 446,670 449,008 Investment Earnings 198,965 304,755 483,876 329,365 206,551 Sanitation 1,470,237 1,462,452 1,437,157 1,470,248 1,463,576 Health 4,806,996 5,117,649 2,991,995 2,614,504 2,609,811 Intergovernmental Revenue 706,574 713,570 1,325,665 677,072 1,463,514 Other Revenues 442,020 381,355 210,946 341,330 253,679 Total Revenues 30,754,617 29,947,492 27,063,766 252729,653 25,637,676 Expenditures: Current General Government 1,613,946 1,779,229 1,616,363 1,541,274 1,666,051 Public Safety 11,367,228 12,005,945 11,218,944 10,884,241 10,963,989 Public Works 4,991,668 5,065,867 5,644,019 5,356,374 6,415,221 Health 5,199,358 4,022,732 2,845,874 2,668,477 2,532,665 Culture and Recreation 677,612 723,046 740,350 734,826 693,078 Cox Field Airport 242,809 179,631 210,851 112,562 134,705 Other 1,838,073 1,922,363 1,845,609 1,716,365 1,743,614 Capital Outlay General Government 252,387 109,280 16,995 10,100 - Public Safety 870,874 403,654 413,250 168,163 178,453 Public Works 941,371 626,741 1,016,738 612,947 248,452 Health 216,631 287,256 303,946 554,083 149,850 Cox Field Airport 65,000 - - 37,275 - Debt Service 186,690 186,690 186,690 186,690 186,690 Other - - 42,187 Total Expenditures 28,463,647 27,312,434 26,059,62924� 24,912,768 Excess (Deficit) of Revenues Over Expenditures 2,290,970 2,635,058 1,004,137 1,104,089 724,908 Other Financing Sources (Uses): Capital Lease - - - • - Operating Transfers In 2,751,240 539,986 18,513 124,968 - Operating Transfers Out (802,211) (29,319) (127,545) (383,374) (44,814) Sale of Capital Assets 151,266 28,000 - - - Insurance Recoveries - 57,835 - - Total Other Financing Sources (Uses): 2,100,295 538,667 (51,197) (258,406) (44,814) Excess of Revenues and Other Sources Over Expenditures and Other Uses 4,391,265 3,173,725 952,940 845,683 680,094 Fund Balance - Beginning of Year 17,150,077 13,451,478 12,670,747 11,622,868 10,839,700 Increase (Decrease) in Reserve for Inventory - - - 40,518 103,074 Prior Period Adjustment (52,060) 524,874 (172,209) 161,678 - Fund Balance - End of Year $ 21,489,282 $ 17,150,077 S 13,451,478 12,670,747 $ 11,622,868 , Source: The Issuer's Comprehensive Annual Financial Reports. 120 CONDENSED WATERWORKS AND SEWER SYSTEM OPERATING STATEMENT (UNAUDITED) TABLE 9 Fiscal Year Ended September 30 2021 2020 2019 2018 2017 Operating Revenues (a) Total Revenues $ 16,567,528 $ 15,043,788 $ 14,452,703 $ 14,168,934 $ 14,236,117 Expenses (°) 10,308,035 9,602,622 10,147,099 9,886,456 9,867,173 Net Revenue Available for Debt Service $ 6,259,493 $ 5,441,166 $ 4,305,604 $ 4,282,478 $ 4,368,944 Annual Revenue Bond Debt Service $64.09 for first 1,000 Cubic Feet $4.83 / 100 Cubic Feet Larger than 2" $225.65 for first 2,000 Cubic Feet $3.87 / 100 Cubic Feet Requirements $ - $ - $ - $ - $ - Coverage of Annual Revenue Bond Requirements N/A N/A N/A N/A N/A Annual Requirements on all Bonds Paid from $ 3,842,897 $ 3,845,397 $ 3,848,957 $ 3,714,257 $ 3,244,870 System Revenues Coverage of Annual Requirements on all 1.63 x 1.41 x 1.11 x 1.15 x 2.17 x Bonds Paid from System Revenues Customer Count: Water 9,762 9,810 9,679 9,698 9,766 Sewer 9,175 9,221 9,189 9,208 9,180 (a) Revenues include operating revenues, interest income and other revenues of the Waterworks and .Sewer System. (b) Expenses include total expenses less depreciation and amortization of the Waterworks and Sewer System. Sources: Information from the Issuer and the Issuer's Annual Audited Financial Reports. WATER RATES (UNAUDITED) TABLE 10 Current Rates (Rates Effective July 1, 2021) Residential Class Commercial Industrial Class Service in Excess of Base Meter Size Base Cost {For Each Additional Inches) (Per Cubic Foot) 100 Cubic Feet) 5/8" - 3/4" $13.13 for first 200 Cubic Feet $4.83/ 100 Cubic Feet 1" and Larger $64.09 for first 1,000 Cubic Feet $4.83 / 100 Cubic Feet Commercial Industrial Class Commercial Industrial Class (Meters Greater Than Three Inches Service in Excess of Base Meter Size Base Cost (For Each Additional (Inches) (Per Cubic Foot) 100 Cubic Feet) 5/8" - 3/4" $15.69 for first 200 Cubic Feet $4.74 / 100 Cubic Feet 1" - 2" $62.87 for first 1,000 Cubic Feet $3.87 / 100 Cubic Feet Larger than 2" $225.65 for first 2,000 Cubic Feet $3.87 / 100 Cubic Feet Commercial Industrial Class (Meters Greater Than Three Inches Service in Excess of Base Meter Size Base Cost (For Each Additional Inches (Per Cubic Foot) 100 Cubic Feet) 4" $3,870.33 for first 100,000 Cubic Feet $3.87 / 100 Cubic Feet 6" $5,805.49 for first 150,000 Cubic Feet $3.87 / 100 Cubic Feet 8" and Larger $7,740.65 for first 200,000 Cubic Feet $3.87 / 100 Cubic Feet Source: Information from the Issuer 121 PRINCIPAL WATER CUSTOMERS 2020-2021 (UNAUDITED) TABLE 11 (October 1, 2020 to September 30, 2021) Name of Customer Lamar Power Partners* Campbell Soup Company Lamar County Water Supply Daisy Farms* Paris Generation Kimberly Clark The James Skinner Baking Co. Paris Regional Medical Center Lamar Co. Human Resources Paris Housing Authority Total Total Water Sales as of September 30, 2021 (unaudited) Average Monthly Average Consumption (Gals.) Monthly Bill 18,213,121 $ 28,147 15,133,416 110,584 4,629,829 73,548 2,468,709 15,764 1,823,998 22,855 763,512 28,546 290,375 11,030 194,842 8,168 95,823 3,602 188,596 7,204 43,802,221 $ 309,448 0 $ 8,545,677 t Principal Water Customers represent approximately 43.45% ©ftotal annual water sales. Includes rmv water sates. SEWER RATES (UNAUDITED) TABLE 12 Current Rates Residential Class Meter Size (Inches) 314" or Less 1" and Larger Commercial Industrial Class Meter Size (Inches) 314" or Less 1" - 2" Larger than 2" (Residential Rates Effective October 1, 2021) Base Cost (Per Cubic Foot) $16.47 for first 200 Cubic Feet $81.34 for first 1,000 Cubic Feet (Commercial Rates Effective October 1, 2021) Base Cost (Per Cubic Foot) $21.92 for first 200 Cubic Feet $84.40 for first 1,000 Cubic Feet $168.82 for first 2,000 Cubic Feet Service in Excess of Base (For Each Additional 100 Cubic Feet) $8.141100 Cubic Feet $8.14 t 100 Cubic Feet Service in Excess of Base (For Each Additional 100 Cubic Feet) $8.441100 Cubic Feet $8.441100 Cubic Feet $8.44 t 100 Cubic Feet PRINCIPAL SEWER CUSTOMERS - 2020-2021 (UNAUDITED) TABLE 13 (October 1, 2020 to September 30, 2021) Name of Customer City of Toco Kimberly Clark The James Skinner Baking Co Paris Housing Authority Paris Regional Medical Center Lamar County Human Resources Paris Junior College Spanish Oaks Regency Apartments Wash Masters Total Total Sewer Charges as of September 30, 2021 (unaudited) Average Monthly Average Consumption (Gals.) Monthly Bill 487,917 $ 4,609 403,728 30,099 290,375 12,205 188,596 14,071 151,399 11,347 95,823 7,158 87,036 6,773 82,331 6,103 72,687 5,383 66,969 4,973 1,926,861 $ 102,721 {n} $ 7,134,313 t°t Principal Seiver Customers represent approximately 20.10% of total annual sewer charges. M