The URL can be used to link to this page

ACFR City of Paris 9-30-2024 with Continuing Disclosure Tables-searchableCITY OF PARIS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT Fiscal Year Ended September 30, 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT CITY OF PARIS, TEXAS Fiscal Year Ended September 30, 2024 low Prepared By Finance Department W.E. Anderson, Director CITY OF PARIS, TEXAS Table of Contents Year Ended September 30, 2024 INTRODUCTORY SECTION Letter of Transmittal......................................................... ...................... I-1 City of Paris Organizational Chart ............................................. ....................... I-7 List of Elected and Appointed Officials .......................................... ...................... I-8 FINANCIAL SECTION Independent Auditors' Report .................................................. ...................... 1 Management's Discussion and Analysis ......................................... ....................... 4 Basic Financial Statements Government -Wide Financial Statements Statement of Net Position ................................................. ....................... 13 1 Statement of Activities.................................................... ....................... 15 2 Fund Financial Statements Balance Sheet - Governmental Funds ........................................ ....................... 16 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds .................. 18 4 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................... ...................... 20 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund .......................................... ....................... 21 6 Statement of Net Position - Proprietary Fund .................................. ....................... 23 7 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund...................... 25 8 Statement of Cash Flows - Proprietary Fund ................................... ....................... 26 9 Statement of Fiduciary Net Position - Fiduciary Fund ............................... .................... 28 10 Statement of Changes in Fiduciary Net Position - Fiduciary Fund ....... .............. .................... 29 11 Notes to Financial Statements ............................................... ....................... 30 Required Supplementary Information Schedule Texas Municipal Retirement System - Schedule of Changes in Net Pension Liability and Related Ratios........... . 77 1 Texas Municipal Retirement System - Schedule of City Pension Contributions .......... ...................... 78 2 Paris Firefighters' Relief and Retirement Fund - Schedule of Changes in Net Pension Liability and Related Ratios.... . 79 3 Paris Firefighters' Relief and Retirement Fund - Schedule of City Contributions........ . ....................... 80 4 Texas Municipal Retirement System - Schedule of Changes in Total OPEB Liability and Related Ratios........... . 81 5 City of Paris Retiree Health Care Plan - Schedule of Changes in Total OPEB Liability and Related Ratios.......... . 82 6 Combining and Individual Nonmajor Fund Statements and Schedules Nonmajor Governmental Funds .............................................. ....................... 83 Combining Balance Sheet - Nonmajor Governmental Funds ....................... ....................... 84 7 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds .............................................. ....................... 85 8 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Funds ................................................... ....................... 86 9 Debt Service Fund ....................................................... ....................... 87 10 Capital Projects Fund ..................................................... ....................... 88 11 Capital Assets Used in the Operation of Governmental Funds - Comparative Schedules by Source ........................................... ....................... 89 CITY OF PARIS, TEXAS Table of Contents (Continued) Year Ended September 30, 2024 12 Page Table 90 STATISTICAL SECTION........................................................................... Financial Trends Net Assets/Position by Component.................................................................. 91 1 Changes in NetAssets/Position..................................................................... 93 2 Fund Balances of Governmental Funds............................................................... 97 3 Changes in Fund Balances of Governmental Funds ..................................................... 99 4 Revenue Capacity Property Tax Levies and Collections................................................................. 101 5 Property Tax Rates - All Direct and Overlapping Governments ............................................ 103 6 Assessed and Estimated Actual Value of Property....................................................... 104 7 Principal Property Taxpayers....................................................................... 106 8 Debt Capacity Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita ...................................................... 108 9 Ratio of Outstanding Debt by Type.................................................................. 109 10 Direct and Overlapping Governmental Activities Debt ................................................... 111 11 Legal Debt Margin Information..................................................................... 112 12 Revenue Pledged Coverage - Water and Sewer Revenue Bonds ........................................... 113 13 Demographic and Economic Information Demographic and Economic Statistics............................................................... 114 14 Principal Employers.............................................................................. 115 Operating Information Operating Indicators by Function.................................................................... 116 Capital Asset Statistics by Function.................................................................. 118 Building Permits at Market Value................................................................... 120 Full -Time Equivalent City Government Employees by Function ............................................ 121 .K610111►1111►14M11R1411[ei. eR0INEel .0u/_1111:6101 123 Continuing Disclosure Information................................................................... OVERALL COMPLIANCE, INTERNAL CONTROLS, AND FEDERAL AWARDS SECTION................................................................ 131 Federal: Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards ................................................... 132 Summary Schedule of Prior Audit Findings............................................................ 134 Schedule of Findings and Questioned Costs........................................................... 135 Corrective Action Plan............................................................................ 137 Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance ...................................... 138 Schedule of Expenditures of Federal Awards........................................................... 141 Notes on Accounting Policies for Federal Awards .................................... .................. 142 INTRODUCTORY SECTION 15 16 17 18 19 TEXAS Where- T"?X(117. 111'e(rch Higher September 19, 2025 Mayor Mihir Pankaj and Members of the 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, 2024. The City of Paris is a financial reporting entity as defined by the Government 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, the Paris Economic Development Corporation (PEDC). More information about PEDC can be found in footnote I.B. which deals with reporting entity topics. There are no other potential component 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 COMPREHENSIVE FINANCIAL REPORT The Annual Comprehensive Financial Report of the City of Paris, Texas, for the fiscal year ended September 30, 2024, which follows, was prepared by the Finance Department. The financial statements have been audited by McClanahan and Holmes, LLP, CPAs, whose report is included herein. This audit satisfies Article III, Section 33 of the City Charter which requires that an annual audit of all 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 gain maximum understanding of the City's financial activity have been included. I-1 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. The current population estimate is 24,930. 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 11,826. 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 (some of which are also striped for pickle ball), 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 2022. The City operates under the Council/Manager form of government with 7 council members elected from single member districts. The Mayor is I-2 elected by the Council itself to serve as moderator of the group. The Council members can serve a maximum of 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 2024-25 reflect an 8.21% increase over the 2023-24 values. Building permits for new residential and commercial construction were valued at $11,737,260 for fiscal year 2023-24. This activity will be reflected in next year's taxable values. Sales taxes for 2023-24 increased from the prior year by 3.16%. Sales taxes for 2024-25 on a cash basis were 2.33% above the 2023-24 level as of March 31, 2025. Hotel occupancy taxes were up 13.01% compared to 2022-23. Franchise fees for 2023-24 were down 0.57% compared to the previous year. This is an immaterial amount. 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 $2,064,320 involving Lions Head, Universal Fabricating, Rodgers Wade, and Ametsa. General Fund receipts equaled 124.19% of the budget. General Fund expenditures were 110.57% of the budget. For the 202425 fiscal year, the City Council adopted a tax rate of .46120 cents per $100 of value. This rate is $0.01662 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 8.21%. 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 from 2016 through 2025. 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. At the same time a small low interest $2,900,000 Certificates of Obligation issue was made through the Texas Water Development Board. Both 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 this 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 I-3 of a new wastewater treatment plant. These bonds will be paid for out of utility system revenue and tax revenue. Additional bonds were issued in 2024 in the amount of $42,720,000 for Phase Two of the new wastewater treatment plant project. Also, the City used 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 areas. Programs in this effort include the Auto Theft Task Force and Justice Assistance Grants 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. A major renovation of the civic center was recently completed. 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 recently worked together to develop a common branding strategy to emphasize our unity in economic development and other areas. In a partnership agreement the City and Paris Texas Pickleball joined forces to construct and maintain eight pickleball courts located at the City Sports Complex. 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 Annual Comprehensive 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 people's 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'x' day of the last month prior to the 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 through financial reports provided to them. Internal Controls I-4 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 09-30-24: Issue 2013 C.O. (TWDB) 2016 G.O. Bonds 2017 G.O. Bonds 2018 G.O. Bonds 2020 Tax and Rev. C.O. (Civic Center) 2020 G.O. Refunding Bonds 2020 Tax Notes 2021 Tax and Rev. C.O. 2022 GO Pension Bonds 2022 Water & Sewer System Rev. Bds. 2023 GO Refunding Bonds 2024 Tax and Rev. C.O. Financed Purchases-Firetrucks Total Independent Audit Revenue Tax Supported Supported Fund Maturity Moody's Investors Rating Insured $ - $ 1,260,000 06-15-32 N/A - 5,840,000 12-15-36 Aa3 6,950,000 - 06-15-37 Aa3 - 520,000 06-15-38 Aa3 - 935,000 06-15-30 N/A 1,210,000 - 12-15-29 Aa3 390,000 - 06-15-26 N/A 12,875,000 27,885,000 12-15-50 Aa3 - 11,180,000 06-15-42 Aa3 - 26,420,000 06-15-51 Aa3 20,570,000 - 12-15-43 Aa3 - 42,790,000 06-15-54 Aa3 288 902 - 01-28-26 N/A $ 42,283,902 $ 116,830,000 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. Acknowledgment 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, I-5 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, Gene Anderson Director of Finance I-6 CITY OF PARIS ORGANIZATIONAL CHART I-7 List of Elected and Appointed Officials Elected Officials Mihir Pankaj —Mayor Gary Savage — Mayor Pro Tem Shatara Moore Rebecca Norment Alix Putnam Rudy Kessel Mickey Ellis Appointed Officials Robert Vine — Interim 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 Connie Lawman — Library Director Sandy Collard — Human Resources Jason Dyess — Emergency Medical Services Osei Amo-Mensah — Planning and Development Danny Rowell — Interim Utilities Director Thomas McMonigle—Fire Chief I-8 FINANCIAL SECTION George H. Struve, CPA Debra J. Wilder, CPA TefPany A. Kavanaugh, CPA April J. Hatfield, CPA Brittany L. Martin, CPA Steven W. Mohundro, CPA, of Counsel Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas MCCLANAHAN AND HOLMES , LLP Certified Public Accountants INDEPENDENT AUDITORS' REPORT Report on the Audit of the Financial Statements Opinions 228 Sixth St. SE Paris, TX 75460 903-784-4316 Fax 903-784-4310 304 W. Chestnut Denison, TX 75020 903-465-6070 Fax 903-465-6093 1400 W. Russell Bonham, TX 75418 903-583-5574 Fax 903-583-9453 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 of the City of Paris, Texas (the City), as of and for the year ended September 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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, as of September 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison schedule for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note I.J. the City adopted new accounting guidance, GASB Statement No. 100, Accounting Changes and Error Corrections, an amendment of GASB Statement No. 62. Our opinions are not modified with respect to this matter. Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors'Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and GovernmentAuditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementaty 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 OPEB liability and related ratios, and the schedules of City contributions be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 inquires of management about the methods of preparing the information and comparing the information Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying combining and individual nonmajor fund financial statements and schedules and the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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 and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section, statistical section, and the continuing disclosure information but does not include the basic financial statements and our auditors' report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 19, 2025, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Paris, Texas September 19, 2025 �AkCfanahan andifo(ines, LLP 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, 2024. 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 increased its tax rate from 0.44278 to 0.47782 per $100 of valuation for fiscal year 2023-24. The increase was for debt service. • For the 2024-25 fiscal year, the City decreased its tax rate to 0.46120 per $100 of valuation. Both the O&M rate and the debt rate decreased. • City-wide revenues this year exceeded City-wide expenses by $14,414,535 whereas in the previous year revenues exceeded expenses by $10,339,649. The underlying causes of the higher surplus were increases in property taxes, sales taxes, unrestricted investment earnings, and miscellaneous revenues. These increases more than offset the increase in expenses. • At the end of the fiscal year, the unassigned fund balance for the general fund was $25,624,971 or 71.07% of total general fund expenditures. The prior year unassigned fund balance was $26,253,936 or 71.30% of general fund expenditures. • At the end of the fiscal year, the net position of the proprietary funds was $72,753,918 compared to $42,501,397 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 4 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. 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 three categories: governmental funds, proprietary funds, and fiduciary 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. Fiduciary Funds The City of Paris is the trustee, or fiduciary, for certain amounts held on behalf of other entities. All of the City's fiduciary activities are reported in a separate Statement of Fiduciary Net Position. The activity of this fund is excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in this fund are used for their intended purpose. The basic fiduciary fund financial statements can be found in Statements 10 and 11 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 Changes in Net Position — Fiduciary Funds in this report. 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 $118,036,312 at the close of the most recent fiscal year. This compares to $103,407,459 for the previous year. This was a 14.14% increase in net position. By far, the largest portion of the City of Paris' net position falls in the unrestricted category ($87,854,453 or 74.43%) and may be used to meet the government's ongoing obligations to citizens and creditors. Net investment in capital assets ($21,876,862 or 18.53%) is the next largest portion of net position and is used by the City of Paris to provide services to citizens and is not available for future spending. The remaining net position ($8,304,997 or 7.03%) is restricted in its use. City of Paris Net Position Governmental Activities Business -Type Activities Total Assets Current and Other Assets $ 44,544,629 $ 39,469,331 $116,732,992 $ 87,538,931 $ 164,527,338 $127,008,262 Capital Assets 41,341,902 40,044,939 95,883,140 77,979,255 133,975,325 118,024,194 Deferred Outflows Related to Asset Retirement Related to Pension Related to OPLB Total Deferred Outflows Long -Term Liabilities Outstanding Other Liabilities Total Assets Total Liabilities Deferred Inflows Related to Pensions Related to OPLB Related to Leases Total Deferred Inflows Net Position Net Investment in Capital Assets Restricted Unrestricted 85 RR6 5;1 79 514 270 212,616,132 165,518,186 298 502 663 245 032 456 - - 5,118,012 5,140,506 5,118,012 5,140,506 3,193,734 6,725,001 500,265 929,305 3,693,999 7,654,306 477,043 430,480 23,310 29,693 500,353 460,173 37,807,969 19,678,153 138,512,970 121,895,899 176,320,939 141,574,052 40244.600 21.846.755 145,352,387 128,988,404 185596.987 150,835,159 1,051,786 1,066,319 1,912,209 11,085,414 8,304,997 25,891,983 944,110 861,431 2,111,393 31,070,770 7,540,275 22,295,017 106,231 45,183 10,791,448 61,962,470 58,033 69,856 26,718,407 15,782,990 1,158,017 1,002,143 1,111,502 931,287 1,912,209 2,111,393 4,181,728 4,044,823 21,876,862 57,789,177 8,304,997 7,540,275 87,854,453 38,078,007 Total Net Position $ 45,282,394 $ 60,906,062 $ 72,753,918 $ 42,501,397 $ 118,036,312 $103,407,459 An additional portion of the City of Paris' net position ($8,304,997 or 7.03%) represents resources that are subject to external restrictions on how they might be used. The balance of unrestricted net position ($87,854,453 or 74.43%) 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 1 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 7 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 Increase 2024 2023 (Decrease) 42,866,263 The following table provides a summary of the City's operations for the years ending 2024 and 2023 for both governmental and business -type activities. Revenues Program Revenues Charges for Services Operating Grants and Contributions City of Paris Changes in Net Position Governmental Activities 10,055,565 11,972,295 1,467,445 1,536,446 Business -Type Activities 20,935,627 468,281 8 $ 19,633,034 998,533 Total $ 30,991,192 1,935,726 $ 31,605,329 2,534,979 Governmental Property Taxes $ 11,121,845 $ 9,207,529 $ 1,914,316 activities Sales Taxes 10,828,578 10,496,451 332,127 decreased the Franchise Taxes 4,697,982 City of Paris' Hotel Occupancy Taxes 1,451,801 4,725,373 (27,391) net position Unrestricted Investment Earnings 1,968,083 1,284,639 by Miscellaneous 3,061,069 1,369,937 167,162 $15,837,986 Gain Loss onDis Disposal - (Loss) p 1,012,657 Or 25.91% Program Revenues 12,760,438 170,071 598,148 during the 14,599,606 2,048,412 current fiscal (170,071) year. This (1,839,168) decrease was caused by the reclassification of grant revenue from the General fund to the Water/Sewer Fund and a transfer from Debt Service to the Water/Sewer Fund to reclassify debt issuance. Total general and program revenues were up $3,023,535 (7.05%). The largest contributors to this increase were property taxes and miscellaneous revenue. General Revenues & Program Revenues Increase 2024 2023 (Decrease) 42,866,263 The following table provides a summary of the City's operations for the years ending 2024 and 2023 for both governmental and business -type activities. Revenues Program Revenues Charges for Services Operating Grants and Contributions City of Paris Changes in Net Position Governmental Activities 10,055,565 11,972,295 1,467,445 1,536,446 Business -Type Activities 20,935,627 468,281 8 $ 19,633,034 998,533 Total $ 30,991,192 1,935,726 $ 31,605,329 2,534,979 Capital Grants and Contributions 1,237,428 1,090,865 188,074 62,500 1,425,502 1,153,365 General Revenues Property Taxes 11,121,845 9,207,529 1,145,302 1,228,894 12,267,147 10,436,423 Sales Taxes 10,828,578 10,496,451 - - 10,828,578 10,496,451 Franchise Taxes 4,697,982 4,725,373 - - 4,697,982 4,725,373 Hotel Occupancy Taxes 1,451,801 1,284,639 - - 1,451,801 1,284,639 Unrestricted Investment Earnings 1,968,083 1,369,937 5,133,463 3,248,285 7,101,548 4,618,222 Miscellaneous 3,061,069 1,182,728 - 38,800 3,061,069 1,221,528 Total Revenues 45,889,796 42,866,263 27,870,747 25,210,046 73,760,545 68,076,309 Expenses General Government 6,222,625 5,275,865 - - 6,222,627 5,275,865 Public Safety 13,761,148 13,157,874 - - 13,761,148 13,157,874 Public Works 9,819,300 9,148,859 - - 9,819,300 9,148,859 Health 6,606,156 9,029,457 - - 6,606,156 9,029,457 Culture and Recreation 988,985 932,113 - - 988,985 932,113 Other - - - - - - Cox Field Airport 1,061,018 1,109,416 - - 1,061,018 1,109,416 Interest on Long -Term Debt 262,654 39,542 - - 262,654 39,542 Water and Sewer - - 20,624,122 19,043,534 20,624,122 19,043,534 Total Expenses 38,721,886 38,693,126 20,624,122 19,043,534 59,346,010 57,736,660 Increase (Decrease) in Net Position Before Transfers 7,167,910 4,173,137 7,246,625 6,166,512 14,414,535 10,339,649 Transfers/Special Items (23,005,896) (157,419) 23,005,896 157,419 - - 2024 2023 2024 2023 2024 2023 Business -Type Activities Increase(Decrease) in Net Position (15,837,986) 4,015,718 30,252,521 6,323,931 14,414,535 10,339,649 Net Position, Beginning 60,906,062 56,890,344 42,501,397 36,177,466 103,407,459 93,067,810 Restatement 214,318 - - - 214,318 - Net Position, Ending $ 45,282,394 $ 60,906,062 $ 72,753,918 $ 42,501,397 $ 118,036,312 $103,407,459 Business -type activities increased the City of Paris' net position by $30,252,521. This increase was primarily due to increased interest earnings on investments and reclassification of grant revenue and debt issuance. 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. 9 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. Governmental Funds Total Assets Total Liabilities Deferred Inflows of Resources Fund Balances Nonspendable Inventories Prepaid Items Long -Term Receivables and Interfund Loans Permanent Fund Principal Restricted For Debt Service Capital Projects Law Enforcement Public Education Community Development Assigned Library Community Development Unassigned General Fund Total Fund Balances Total Liabilities, Deferred Inflows and Fund Balances 2024 2023 $ 43,064,955 $ 39,340,134 2.160.267 2.175.610 r!.irLi>A 354,666 275,122 382,969 - 3,263,522 - 108,145 100,530 2,994,786 2,002,722 2,963,117 2,942,370 1,134,300 1,408,798 841,645 798,716 263,004 287,139 90,213 81,211 252,128 238,210 25,624,971 26,253,936 34 388 754 38 273 466 $ 43,064,955 $ 39,340,134 As of the end of the current fiscal year, the City of Paris' governmental funds reported combined ending fund balances of $38,273,466. Approximately 66.95% of this total amount ($25,624,971) 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 ($108,145), 2) pay debt service ($2,994,786), 3) inventories ($354,666), 4) law enforcement ($1,134,300), 5) library ($90,213), 6), Public Education ($841,645), 7) capital projects ($2,963,117); 8) Community Development ($515,132), 9) Prepaid Items ($382,969), and 10) Long -Term Receivables and Interfund Loans ($3,263,522). 10 Governmental Funds Revenues, Expenditures, and Changes in Fund Balances 2024 2023 Revenues $ 44,293,637 $ 42,785,984 Expenditures 40,517,883 39,833,361 Deficiency of Revenues Over (Under) Expenditures 3,775,754 2,952,623 Total Other Financing Sources (Uses) (105,360) 284,093 Net Change in Fund Balances Fund Balances -Beginning Restatement Fund Balances -Ending General Fund 3,670,394 34,388,754 214,318 3,236,716 31,152,038 38.273.466 $ 34.388.754 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 fund was $25,624,971 ($26,253,936 the previous year), while total fund balance reached $30,372,365 ($27,329,955 the previous year). The increase in the fund balance of the general fund was primarily due to an improved cash position. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 63.24% of total general fund expenditures, while total fund balance represents 74.96% 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 and general fund types. Statement 6 combines these funds and provides a budget to actual comparison. The final appropriation of the general fund types in total was overspent by $3,449,712 ($3,659,375 overspent the previous year). This 10.57% variance was due to a large EMS bad debt expense. General fund type revenues were over budget by 24.19% or $7,570,855 ($7,663,988 last year). Higher than expected investment earnings, intergovernmental revenues, sales tax collections and grossing up EMS billings from a cash basis to an accrual basis account for the variance. 11 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 $2,958,692 ($2,938,214 last year). This increase was due to a positive revenue vs. expense comparison. 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 $3,089,892 ($2,002,722 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 $1,087,170 ($203,066 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 $2,828,770 in the current fiscal year ($1,079,215 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 $61,962,470 ($15,782,990 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, 2024 amounts to $135,918,276 ($117,454,141 the previous year). Both amounts are net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements, machinery and equipment, park facilities, roads, highways, and bridges. 12 Net Capital Assets Governmental Activities Business -Type Activities Total Total Land $ 6,142,418 $ 6,142,418 $ 339,620 $ 339,620 $ 6,482,038 $ 6,482,038 Buildings and 6,950,000 - 06-15-37 Aa3 - 520,000 System 10,946,218 11,057,889 55,056,368 56,826,303 66,002,586 67,884,192 Improvements 12-15-29 Aa3 390,000 - 06-15-26 N/A Other than 27,885,000 12-15-50 Aa3 - 11,180,000 06-15-42 Buildings 3,994,562 1,902,078 - - 3,994,562 1,902,078 Machinery, Aa3 - 42,790,000 06-15-54 Aa3 288.902 Furniture, and 01-28-26 N/A $ 42,283,902 $ 116,830,000 Equipment 4,396,008 4,978,358 2,781,716 2,608,174 7,177,724 7,586,532 Infrastructure 14,312,220 15,273,977 - - 14,312,220 15,273,977 Construction in Progress 393,403 311,377 34,455,719 14,878,290 34,849,122 15,189,667 Water Rights — Net - - 3,100,024 3,135,657 3,100,024 3,135,657 Additional 2024 2023 2024 2023 2024 2023 information $40,184,829 $39,666,097 $95,733,447 $77,788,044 $135,918,276 $117,454,141 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 of Paris has total debt outstanding in the amount of $159,113,902 (includes two financed purchases). Of this amount, $41,995,000 comprises debt being paid for by property tax, and $116,830,000 represents bonds being paid for by water and sewer revenues. Issue 2013 C.O. (TWDB) 2016 G.O. Bonds 2017 G.O. Bonds 2018 G.O. Bonds 2020 Tax and Rev. C.O. (Civic Center) 2020 G.O. Refunding Bonds 2020 Tax Notes 2021 Tax and Rev. C.O. 2022 GO Pension Bonds 2022 Water & Sewer System Rev. Bds. 2023 GO Refunding Bonds 2024 Tax and Rev. C.O. Financed Purchases-Firetrucks Total Revenue Tax Supported Supported Fund Maturity Moody's Investors Rating Insured $ - $ 1,260,000 06-15-32 N/A - 5,840,000 12-15-36 Aa3 6,950,000 - 06-15-37 Aa3 - 520,000 06-15-38 Aa3 - 935,000 06-15-30 N/A 1,210,000 - 12-15-29 Aa3 390,000 - 06-15-26 N/A 12,875,000 27,885,000 12-15-50 Aa3 - 11,180,000 06-15-42 Aa3 - 26,420,000 06-15-51 Aa3 20,570,000 - 12-15-43 Aa3 - 42,790,000 06-15-54 Aa3 288.902 01-28-26 N/A $ 42,283,902 $ 116,830,000 Paris' bond debt increased by $35,108,088 during the fiscal year. This was due to the $42,790,000 Tax & Revenue COs issued for the purpose of constructing a new wastewater treatment plant. This new debt was offset somewhat by principal payments made on the previously issued debt. 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 13 up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of $0.47782 per $100 valuation for the 2023-24 fiscal year. This rate was broken down into $0.32176 per $100 valuation for operations and $0.15606 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 10.40% of its debt capacity. Additional information on the City of Paris' long-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 5.50% in the coming year. • New construction amounted to 31 residential units and 9 commercial units. • Local population growth is expected to be minimal. • The debt tax rate is expected to decrease $0.00778 per $100 of value for debt services while the O&M rate is expected to decrease $0.00884 per $100 of value for operations. • Franchise fees are expected to remain stable. All of these factors were considered in preparing the City of Paris' budget for 2024-25. 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. 14 CITY OF PARIS, TEXAS Statement of Net Position September 30, 2024 Statement I Primary Government Component Unit Governmental Business -Type Economic Activities Activities Total Tieve�ni meet Assets Cash and Cash Equivalents $ 11,336,098 $ 24,007,328 $ 35,343,426 $ 2,202,901 Investments 17,450,111 1,048,371 18,498,482 Receivables (Net of Allowance 2,361,756 for Uncollectibles) 6,568,677 3,741,191 10,309,868 8 74,352 Note Receivable 2,099,917 - 2,099,917 Lease Receivable 2,010,961 2,010,961 Intergovernmental Receivable 470,213 - 470,213 Inventories 354,666 717,325 1,071,991 Prepaid Items 382,969 116,377 499,346 6,588 Net Pension Asset 1,577,043 42,955 1,619,998 Restricted Assets Cash and Cash Equivalents 1,724,124 12,805,694 14,529,818 Investments 552,819 74,253,751 74,806,570 Due from Component Unit 17,031 - 17,031 Water Rights (Net of Accumulated Amortization) - 3,100,024 3,100,024 Capital Assets Not Being Depreciated Land 6,142,418 339,620 6,482,038 5,338,784 Construction in Progress 393,403 34,455,719 34,849,122 Capital Assets (Net of Accumulated Depreciation) Buildings and System 10,946,218 55,056,368 66,002,586 Improvements Other Than Buildings 3,994,562 - 3,994,562 Machinery and Equipment 4,396,008 2,781,716 7,177,724 Infrastructure 14,312,220 - 14,312,220 8,085 Right -to -Use Assets, Net of Amortization 1,157,073 149,693 1,306,766 - Total Assets 85,886,531 212,616,132 298,502,663 10,792,466 Deferred Outflows of Resources Deferred Outflows Related to Asset Retirement Obligation - 5,118,012 5,118,012 - Deferred Outflows Related to Pensions 3,193,734 500,265 3,693,999 Deferred Outflows Related to OPEB 477,043 23,310 500,353 Total Deferred Outflows of Resources 3,670,777 5,641,587 9,312,364 The accompanying notes to the financial statements are an integral part of this statement. 13 CITY OF PARIS, TEXAS Statement of Net Position September 30, 2024 (Continued) Statement I Component Primary Government Unit Governmental Business -Type Economic Activities Activities Total Development Liabilities 740,128 Accounts Payable and 374 Accrued Liabilities 2,062,258 3,881,655 Accrued Interest Payable 373,733 1,740,303 Due to Custodial Fund 640 - Unearned Revenue - 114,870 Customers' Deposits 1,102,589 Intergovernmental Payable - Noncurrent Liabilities Due Within One Year 5,943,913 740,128 2,114,036 374 640 - 114,870 306,092 1,102,589 - - 17,031 Compensated Absences 145,298 22,277 167,575 - Bonds and Notes Payable 1,607,974 3,830,000 5,437,974 151,542 Right -to -Use Liability Due 313,041 40,037 353,078 - in More Than One Year Compensated Absences 1,215,621 200,496 1,416,117 - Bonds and Notes Payable 30,173,237 128,464,349 158,637,586 1,948,043 Right -to -Use Liability 711,694 90,715 802,409 - Asset Retirement Obligation - 5,684,834 5,684,834 Total OPEB Liability 3.641.104 180262 3.821366 - Total Liabilities 40.244.600 145.352.387 185.596.987 3.163.210 Deferred Inflows of Resources Deferred Inflows Related to Pensions 1,051,786 106,231 1,158,017 Deferred Inflows Related to OPEB 1,066,319 45,183 1,111,502 Deferred Inflows Related to Leases 1.912209 1.912.209 Total Deferred Inflows of Resources 4.030.314 151.414 4.181.728 Net Position 5,346,869 Net Investment in Capital Assets 11,085,414 10,791,448 21,876,862 Restricted for - Capital Projects 2,963,117 - 2,963,117 2,099,585 Debt Service 2,994,786 2,994,786 Law Enforcement 1,134,300 - Public Education 841,645 1,134,300 - Community Development 263,004 841,645 2,064,320 Industrial Incentives - 263,004 Permanent Library Funds - - - Nonexpendable 108,145 61962470 (1.881.518) Unrestricted (Deficit) 25.891.983 $ S 72.753.918 108,145$ 7.629.256 Total Net Position 45.282.394 87.854.453 S 118.036.312 The accompanying notes to the financial statements are an integral part of this statement. 16 CITY OF PARIS, TEXAS Statement 2 Statement of Activities Year Ended September 30, 2024 Program Revenues Net (Expense) Revenue and Changes in Net Position Capital Primary Government Component unit Charges for Grants and Grants and Governmental Business -Type Economic FunctionsPrograms Expenses Services Contributions Contributions Activities Activities Total Development Operating Primary Government Governmental Activities General Government $ 6,222,625 $ 627,895 $ 1,463,929 $ 2,329 $ (4,128,472) $ $ (4,128,472) $ Public Safety 13,761,148 321,835 340,320 18,238 (13,080,755) (13,080,755) Public Works 9,819,300 1,637,218 - 785,730 (7,396,352) (7,396,352) Health 6,606,156 6,648,010 - 41,854 41,854 Culture and Recreation 988,985 78,512 - - (910,473) (910,473) Cox Field Airport 1,061,018 742,095 2,600 91,727 (224,596) (224,596) Interest on Long -Terni Debt 262,654 - - - (262,654) (262,654) Total Governmental Activities 38,721,886 Business -Type Activities Water and Sewer Total Business -Type Activities Total Primary Government Component Unit Economic Development 20.624.122 20.935.627 468281 188.074 967.860 967.860 20.624.122 20.935.627 468281 188.074 967.860 967.860 R 52346.00R S 30.991.192 S 2275.130 R I.086.09R (25,961,448) 967,860 (24,993,588) R 2968.319 S R R LORI _R40 10,055,565 1,806,849 898,024 (25,961,448) General Revenues and Transfers General Revenues Property Taxes Sales Taxes Franchise Taxes Hotel Occupancy Taxes Unrestricted Investment Earnings Contributed Capital Miscellaneous Transfers Total General Revenues and Transfers Changes in Net Position Net Position - Beginning of Year, as Previously Presented Restatement Net Position - Beginning of Year, as Restated Net Position - End of Year The accompanying notes to the financial statements are an integral part of this statement. 15 _ (1,886,479) (25,961,448) 11,121,845 1,145,302 12,267,147 10,828,578 - 10,828,578 2,164,081 4,697,982 4,697,982 1,451,801 - 1,451,801 1,968,083 5,133,463 7,101,546 227,265 1,541,522 - - 1,519,547 - 1,519,547 23,005,896 327,554 (23,005,8961 10,123,462 29,284,661 - 37,866,60L 2,718,900 (15,837,986) 30,252,521 12,873,013 832,421 CIO ,9n6,n62 42,501,397 214,318 - 103,407,459 6,796,X35 214,318 CITY OF PARIS, TEXAS Statement 3 Balance Sheet - Governmental Funds September 30, 2024 Total Nonmajor Total Debt Capital Governmental Governmental Assets $ 1 Cash and Cash Equivalents 3,060,222 Investments 18,002,930 Receivables (Net of Allowance for Uncollectibles) Accounts Taxes 3,601,629 Leases 2,967,048 Notes 2,010,961 Intergovernmental Receivable 2,099,917 Inventories Prepaid Items 470,213 Due from Other Funds $ 5,370,104 $ 1,731,921 354,666 Due from Component Unit 17,897,879 105,051 382,969 Total Assets $ 2,999,505 97,369 Liabilities, Deferred Inflows, and Fund Balances 3,579,125 $ 2,958,692 22,504 17,031 Liabilities 2,871,942 - - $ 4 Accounts Payable and Accrued Liabilities 1,283,446 727,515 3,064,955 Due to Other Funds 2,099,917 - Total Liabilities 470,213 95,106 352,694 _ 1,972380,214 Deferred Inflows of Resources - _ 2,755 $ Unavailable Revenue - Property Taxes - 14,502 2,062,258 Unavailable Revenue - Leases 17,031 82,867 _ 98,009 Total Deferred Inflows of Resources $ 3 4,322,565 - - $ 2,606,220 2,160,267 $ 3,177,478 Fund Balances - Nonspendable $ 2,958,692 Inventories $ 2,006,716 $ 55,542 719,013 Prepaid Items 98,009 $ - Long -Term Receivables and 2,104,725 $ _ 55,542 1,912,209 Interfund Loans Permanent Library Funds 87,586 _ 2,631,222 Restricted for 631,427 - Capital Projects 1,214,048 698,161 Debt Service 1,845,475 _ 698,161 Law Enforcement 87,586 _ Public Education _ 354,666 Community Development 352,694 1,972 382,969 Assigned 380,214 - 2,755 Library Community Development 3,168,416 - - 3,263,522 Unassigned: General Fund - 95,106 108,145 - - 108,145 4,425 - - 2,994,786 2,958,692 1,134,300 2,963,117 841,645 - - - 2,994,786 - - - 263,004 1,134,300 - - - 90,213 841,645 - - - 252,128 263,004 25,624,971 - - - 19 90,213 252,128 25,624,971 General Service Projects Funds Funds Total Fund Balances 30,372,365 3,089,892 2,958,692 1,852,517 38,273,466 Total Liabilities, Deferred Inflows and Fund Balances S 3 4,� S 3,177,478 S 2,958,692 S 2,606,220 S 4 3,064,955 The accompanying notes to the financial statements are an integral part of this statement. 20 CITY OF PARIS, TEXAS Statement 3 Balance Sheet - Governmental Funds (Continued) September 30, 2024 Amounts reported for governmental activities in the statement of net position are different because: Fund Balances - Total Governmental Funds $ 38,273,466 Amounts reported for governmental activities in the statement of net position are different because: Capital and right -to -use assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. (Net of Accumulated Depreciation/Amortization) 41,341,902 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred or not reflected in the funds. 719,013 Long-term liabilities, including bonds payable and accrued interest, are not due and payable in the current period and, therefore, are not reported in the funds. Included in noncurrent liabilities is the recognition of the City's proportionate share of the net pension asset required by GASB 68 in the amount of $1,577,043, a Deferred Outflow of Resources in the amount of $3,193,734, and a Deferred Inflow of Resources in the amount of $1,051,786. This amounted to an increase in Net Position of $3,718,991. (34,540,598) Included in noncurrent liabilities is the recognition of the City's proportionate share of the total OPEB liability required by GASB 75 in the amount of $3,641,104, a Deferred Outflow of Resources in the amount of $477,043, and a Deferred Inflow of Resources in the amount of $1,066,319. This amounted to a decrease in Net Position of $4,230,380. 3,718,991 Net Position of Governmental Activities 21 (4,230,380) $ 45,282,394 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 4 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended September 30, 2024 Total Nonmajor Total Debt Capital Governmental Governmental Revenues Taxes Property $ 8,238,439 $ 2,828,770 $ - $ - $ 11,067,209 Sales 10,828,578 - 10,828,578 Franchise 4,697,982 - 4,697,982 Hotel Occupancy 1,081,333 315,292 - 55,176 1,451,801 Licenses and Permits 610,658 - - - 610,658 Fines and Fees 423,160 - - 23,329 446,489 Leases 95,074 - - 93,203 188,277 Charges for Services - - - 741,994 741,994 Use of Money and Property 1,364,200 321,775 166,621 115,487 1,968,083 Sanitation 1,405,361 - - - 1,405,361 Health 6,637,108 - - - 6,637,108 Intergovernmental 2,035,101 - - 96,304 2,131,405 Other 1,444,229 - - 674,463 2,118,692 Total Revenues Expenditures Current General Government 2,570,804 - - 47,928 2,618,732 Public Safety 12,860,941 - - 514 12,861,455 Public Works 7,880,542 - - 499,749 8,380,291 Health 6,366,967 - - 1,811 6,368,778 Culture and Recreation 891,597 - - 1,142 892,739 Cox Field Airport - - - 1,038,916 1,038,916 Other 2,364,997 - - - Debt Service 2,364,997 22 Principal 544,902 1,054,178 Inception of Lease Total - - 271,089 Inception of Subscription -Based IT Nonmajor Total Debt Capital Governmental 1,599,080 Interest 36,215 893,742 Transfers Out (1,533,905) (22,077,234) - (55,872) (23,667,011) 929,957 Bond Issuance Costs - 203,212 - Capital Outlay 203,212 General Government 401,747 - 34,969 436,716 Public Safety 1,585,513 - - - 1,585,513 Public Works 255,978 - 111,174 573,468 940,620 Health 296,877 - - - 296,877 Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures 2,804,143 1,314,705 20,478 (363,572) 3,775,754 38.861.223 3.465.837 166 621 1.799.956 44 293 637 General Service Projects Funds Funds The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended September 30, 2024 Other Financing Sources (Uses Statement 4 (Continued) 36.057.080 2.151.132 146.143 2.163.528 40 517 883 Inception of Lease Total - - 271,089 Inception of Subscription -Based IT Nonmajor Total Debt Capital Governmental Governmental General Service Projects Funds Funds Refunding Bonds Issued - 21,849,699 - - 21,849,699 Inception of Lease 271,089 - - - 271,089 Inception of Subscription -Based IT Arrangement 779,748 - - - 779,748 Transfers In 507,017 - - 154,098 661,115 Transfers Out (1,533,905) (22,077,234) - (55,872) (23,667,011) 23 Total Other Financing Sources (Uses) Net Changes in Fund Balances Fund Balances - Beginning of Year, as Previously Presented 23,949 (227,535) - 98,226 1053601 2,828,092 1,087,170 20,478 (265,346) 3,670,394 27,329,955 2,002,722 2,938,214 2,117,863 14 IRR 754 Restatement 214,318 - - - 214,318 Fund Balances - Beginning of Year, as Restated 27,544,273 2,002,722 2,938,214 2,117,863 34,603,072 Fund Balances - End of Year 30.372.365 3.089.892 2958.692 $ 1.852.517 38.273.466 The accompanying notes to the financial statements are an integral part of this statement. 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, 2024 Amounts reported for governmental activities in the statement of activities (Statement 2) are different because: 24 Statement 5 Net Change in Fund Balances - Total Governmental Funds (Statement 4) $ 3,670,394 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. This is the amount by which capital outlays exceeded depreciation in the current period. (244,559) The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to decrease net position. 1,541,522 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in governmental funds. 54,636 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. (295,392) 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. (63,204) Pension expenses are not reported as expenditures in governmental funds and contributions after the measurement date are deferred. 607,749 OPEB expenses are not reported as expenditures in governmental funds and contributions after the measurement date are deferred. 212,550 The issuance of long-term debt 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. (21,321,682) Change in net position of governmental activities (Statement 2). S (15.837.986) The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 6 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Year Ended September 30, 2024 Budgeted Amounts Variance with 25 Original Final Actual REVENUES Property Taxes Sales Taxes Franchise Taxes Hotel Occupancy Taxes Licenses and Permits Fines and Fees Leases 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 Budget $ 8,302,000 $ 8,302,000 $ 8,238,439 $ (63,561) 10,300,000 10,300,000 10,828,578 528,578 4,885,150 4,885,150 4,697,982 2,344,784 515,289 515,289 401,450 (187,168) 900,000 900,000 1,081,333 181,333 217,800 217,800 610,658 392,858 364,800 364,800 423,160 58,360 - - 95,074 95,074 442,000 442,000 1,364,200 922,200 1,345,000 1,345,000 1,405,361 60,361 3,845,000 3,845,000 6,637,108 2,792,108 271,818 271,818 2,035,101 1,763,283 416,800 416,800 1,444,229 1,027,429 31,290,368 31,290,368 38,861,223 7,570,855 190,500 762,223 418,188 273,021 219,071 664.712 2,527,715 7,853,148 5,664,697 13,517,845 275,925 794,058 418,188 273,021 222,371 614.712 2,598,275 7,863,343 5,857,337 13,720,680 1,760,684 1,660,684 418,884 418,884 258,963 258,963 1,410,031 1,486,701 1,350,000 1,350,000 2,544,784 2,344,784 515,289 515,289 401,450 401,450 8,660,085 8.436.755 561,731 825,369 403,078 288,234 221,966 796.901 3,097,279 9,002,140 5,865,325 14,867,465 1,872,700 397,820 249,273 1,497,857 1,627,519 1,582,141 549,296 362.557 8,139,163 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Year Ended September 30, 2024 Budgeted Amounts 26 (285,806) (31,311) 15,110 (15,213) 405 (182.1891 (499,004) (1,138,797) (7,988) (1,146,785) (212,016) 21,064 9,690 (11,156) (277,519) 762,643 (34,007) 38-893 297,592 Statement 6 (Continued) Variance with Final Budget Original Final Actual EXPENDITURES (Continued) (1,317,000) (1,317,000) 2,804,143 Health 5,010,435 4,749,400 6,696,579 (1947,179) Culture and Recreation Paris Band 23,050 23,700 24,063 271,089 Inception of Subscription -Based IT (363) Library Services 842,999 858,519 867,534 779,748 Transfers In - - 507,017 (9,015) Total Culture and Recreation 866,049 882,219 891,597 (9,378) Other 2,025,239 2,220,039 2,364,997 Sources (Uses) (62,000) (62,000) 23,949 (144,958) Total Expenditures 32,607,368 32,607,368 36,057,080 (3,449,712) Excess (Deficiency) of Revenues Over Expenditures (1,317,000) (1,317,000) 2,804,143 4,121,143 Other Financing Sources (Uses) Inception of Lease - - 271,089 271,089 Inception of Subscription -Based IT Arrangement - - 779,748 779,748 Transfers In - - 507,017 507,017 Transfers Out ( 62,000) (62,000) (1,533,905) (1,471,905) Total Other Financing Sources (Uses) (62,000) (62,000) 23,949 85,949 Net Changes in Fund Balance (1,379,000) (1,379,000) 2,828,092 4,207,092 Fund Balance - Beginning of Year, as Previously Presented 27,329,955 27,329,955 27,329,955 Restatement - - 214,318 214,318 Fund Balance - Beginning of Year, as Restated 27,329,955 27,329,955 27,544,273 214,318 Fund Balance - End of Year $ 25,950955 $ 25,950,955 $ 30,372,365 $ 4,421,410 27 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 7 Statement of Net Position Proprietary Fund September 30, 2024 Water and Sewer Enterprise Fund ASSETS Current Assets Cash and Cash Equivalents $ 24,007,328 Restricted Cash and Cash Equivalents 12,805,694 Total Cash and Cash Equivalents 36,813,022 Accounts Receivable, Net 3,505,889 Accrued Interest Receivable 235,302 Inventories 717,325 Prepaid Items 116,377 Total Current Assets 41,387,915 Noncurrent Assets Investments Construction 65,150,377 Reserve and Contingency 9,103,374 Unrestricted 1,048,371 Total Investments 75,302,122 Water Rights (Net of Accumulated Amortization) 3,100,024 Capital Assets Land 339,620 Construction in Progress 34,455,719 Plant, Pumps, and Motors 33,177,315 Distribution System 83,050,863 Collection System 28,590,708 Maintenance Equipment and Vehicles 6,860,537 Furniture and Equipment 2,092,872 Subscription -Based IT Asset 207,587 Less Accumulated Depreciation/Amortization (95,992,105) Total Capital Assets (Net of Accumulated Depreciation/Amortization) 92,783,116 Net Pension Asset 42,955 Total Noncurrent Assets 1 71,228,217 Total Assets 212,616,132 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Asset Retirement Obligation 5 ,118,012 Deferred Outflows Related to Pensions 500,265 Deferred Outflows Related to OPEB 23,310 Total Deferred Outflows 5,641,587 28 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 7 Statement of Net Position (Continued) Proprietary Fund September 30, 2024 Water and Sewer Enterprise Fund LIABILITIES Current Liabilities Accounts Payable and Accrued Liabilities 3,881,655 Accrued Interest Payable 1,740,303 Customers' Deposits Payable - Restricted Assets 1 ,102,5 89 Bonds Payable - Current Portion 3,830,000 Right -to -Use Liability - Current Portion 4 0,037 Accrued Compensated Absences - Current Portion 22,277 Unearned Revenue 114,870 Total Current Liabilities 10,731,731 Noncurrent Liabilities Bonds Payable - Noncurrent Portion 128,464,349 Right -to -Use Liability - Noncurrent Portion 9 0,715 Accrued Compensated Absences - Noncurrent Portion 200,496 Asset Retirement Obligation 5,684,834 Total OPEB Liability 180,262 Total Noncurrent Liabilities 1 34,620,656 Total Liabilities 145,352,387 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 106,231 Deferred Inflows Related to OPEB 45,183 Total Deferred Inflows 151,414 NET POSITION Net Investment in Capital Assets 1 0,791,448 Unrestricted 61,962,470 Total Net Position $ 72,753,918 29 The accompanying notes to the financial statements are an integral part of this statement. CITY OF PARIS, TEXAS Statement 8 Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Fund Year Ended September 30, 2024 Water and Sewer Enterprise Fund Operating Revenues Charges for Sales and Services Water Sales and Taps $ 8,872,206 Sewer Charges and Taps 11,524,416 Sanitation Billing Fees 79,432 Service Charges 198,499 Industrial Surcharges 17,559 Miscellaneous 243,515 Total Operating Revenues 20,935,627 Operating Expenses Personnel 3,686,056 Supplies 1,820,259 Contractual 4,200,677 Maintenance 925,145 Sundry Charges 806,927 Other 815,189 Depreciation/Amortization 3,773,752 Amortization of Water Rights 35,633 Amortization of Asset Retirement Obligation 1 89,494 Total Operating Expenses 16,253,132 Operating Income 4.682.495 Nonoperating Revenues (Expenses) Investment Earnings 3,760,591 Property Taxes 1,145,302 Net Increase (Decrease) in the Fair Value of Investments 1,372,872 Intergovernmental 468,281 Interest Expense (4,091,719) Bond Issue Costs (279,271) Net Nonoperating Revenues (Expenses) 2,376,056 30 Income Before Contributions, Other Revenue, and Transfers Capital Contributions, Other Revenue, and Transfers Capital Contributions Transfers In Transfers Out Total Capital Contributions, Other Revenue, and Transfers Changes in Net Position Total Net Position - Beginning Total Net Position - Ending The accompanying notes to the financial statements are an integral part of this statement. 31 7-058-551 188,074 23,361,894 (355,998) 23,193,970 30,252,521 42,501,397 $ 72,753,918 CITY OF PARIS, TEXAS Statement 9 Statement of Cash Flows Proprietary Fund Year Ended September 30, 2024 Water and Sewer Enterprise Fund Cash Flows from Operating Activities Receipts from Customers and Users $ 18,202,167 Other Receipts 243,515 Payments to Suppliers, Contractors, and Service Providers (7,544,459) Payments to Employees for Salaries and Benefits (3,663,742) Net Cash Provided (Used) by Operating Activities 7,237,481 Cash Flows from Noncapital Financing Activities Transfers In 23,361,894 Transfers Out (355,998) Net Cash Provided (Used) by Noncapital Financing Activities 23,005,896 Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (21,713,270) Proceeds from Long -Term Debt 42,790,000 Principal Paid on Capital Debt (27,061,772) Capital Grants 656,355 Bond Issue Costs (279,271) Interest Paid on Capital Debt (2,375,801) Property Taxes 1,154,353 Net Cash Provided (Used) by Capital and Related Financing Activities (6,829,406) Cash Flows from Investing Activities Interest on Investments 3,788,836 Purchases of Investment Securities (100,383,173) Maturities of Investments 79,558,530 Net Cash Provided (Used) by Investing Activities (17,035,807) Net Increase in Cash and Cash Equivalents 6,378,164 Cash and Cash Equivalents - Beginning 30,434,858 Cash and Cash Equivalents - Ending $ 36,813,022 The accompanying notes to the financial statements are an integral part of this statement. 26 CITY OF PARIS, TEXAS Statement 9 Statement of Cash Flows (Continued) Proprietary Fund Year Ended September 30, 2024 Water and Sewer Enterprise Fund Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities $ 4,682,495 Depreciation and Amortization 3,773,752 Amortization of Water Rights 35,633 Amortization of Asset Retirement Obligation 189,494 Decrease (Increase) in Accounts Receivable (584,847) Decrease (Increase) in Prepaid Items (51,549) Decrease (Increase) in Inventory 93,673 Decrease (Increase) in Net Pension Asset (42,955) Decrease (Increase) in Deferred Outflows of Resources 435,423 Increase (Decrease) in Accounts Payable and Accrued Liabilities 1,208,743 Increase (Decrease) in Customers' Deposits 17,965 Increase (Decrease) in Due to Other Funds (70,000) Increase (Decrease) in Unearned Revenue (1,923,063) Increase (Decrease) in Net Pension Liabilities (566,443) Increase (Decrease) in Total OPEB Liabilities 15,635 Increase (Decrease) in Deferred Inflows of Resources 23,525 Total Adjustments 2,»4986 Net Cash Provided by Operating Activities $ 7,237,481 Noncash Investing, Capital, and Financing Activities Adjustment in Estimate of Asset Retirement Obligation $ 167,000 Increase in Deferred Outflow of Resources - Asset Retirement Obligation (167,000) The accompanying notes to the financial statements are an integral part of this statement. 27 CITY OF PARIS, TEXAS Statement 10 Statement of Fiduciary Net Position Fiduciary Fund September 30, 2024 Custodial Fund Court Costs and Fees ASSETS Cash and Cash Equivalents $ 17,326 Due from Other Funds 640 Total Assets LIABILITIES Accounts Payable to State Total Liabilities NET POSITION Total Net Position 17,966 The accompanying notes to the financial statements are an integral part of this statement. ADDITIONS Contributions State Court Fees Collected Total Additions DEDUCTIONS Payments of Court Fees to State Total Deductions Change in Net Position Net Position - Beginning Net Position - Ending 28 CITY OF PARIS, TEXAS Statement I I Statement of Changes in Fiduciary Net Position Fiduciary Fund Year Ended September 30, 2024 Custodial Fund Court Costs and Fees $ 80,986 80,986 80,986 80,986 The accompanying notes to the financial statements are an integral part of this statement. 29 CITY OF PARIS, TEXAS Notes to Financial Statements September 30, 2024 L Summarof 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, whichnormally are supported by taxes and intergovernmental revenues, are reported separately from businesstype 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 governmentwide 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 seven -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, proprietary, and fiduciary — 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. CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 30 L Summa .rr5 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 proj ects. 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. The City reports the following fiduciary fund: The Court Cost and Fees Custodial Fund includes court costs collected by the City on behalf of the State of Texas, which are remitted to the State quarterly. These assets are excluded from the government -wide financial statements as they cannot be used to support the government's own programs. 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. Interfund services provided and used are not eliminated in the process of consolidation. 38 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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. L Summa .rr5 of Significant 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 financing through 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 taxis 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 and fiduciary 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 1. Budgetary Basis of Accounting 39 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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 nonbudgeted L Summarof 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 permanent or 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. An annual budget is not legally adopted for the Library Memorial Fund, a nonmajor special revenue fund. 2. Excess of Expenditures Over Appropriations For the year ended September 30, 2024, 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, 2024, the City Council approved a transfer of $611,035 from various departments to other departmental line items. Expenditures exceeded appropriations in the following departments: Council $285,806, Manager $31,311, Municipal Court $15,213, Finance $182,189, Police $1,138,797, Fire $7,988, Community Development $212,016, Parks and Recreation $11,156, Sanitation $277,519, Traffic and Public Lighting $34,007, Health $1,947,179, Paris Band $363, Library Services $9,015, Transfers Out $1,471,905. G. Assets, Liabilities, and Equity 1. 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. 40 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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. The City and PEDC hold investments in two external investment pools, Texas CLASS and LOGIC. Both investment pools carry investments at amortized cost, which 41 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof 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 II — 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 II 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. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. The cost of prepaid items are recorded as expenditures/expenses when consumed rather than when purchased. 5. 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. 42 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) 5. Restricted Assets (Continued) Other restricted assets include funds restricted from revenue bond proceeds, contractual obligation debt service funds, unspent grant proceeds, and customer deposits. Assets restricted for a specific purpose are utilized before the use of unrestricted assets to pay related obligations when authorized to do so. 6. 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. 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. Information on leased assets is presented in Note LG.7. and subscription -based information technology arrangements (SBITA) is presented in Note L G. 8. 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 7. Leases The Government Accounting Standards Board defines a lease as a contract that conveys control of the right to use another entity's nonfinancial asset as specified in the contract for a period of time in an exchange or exchange - like transaction. City as Lessor 43 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) The City is a lessor for noncancellable leases of equipment. The City recognizes a lease receivable and a deferred inflow of resources at the beginning of the lease term in the government -wide and governmental fund financial statements. In general, the lease receivable and deferred inflows of resources are measured at the 7. Leases (Continued) City as Lessor (Continued) present value of the lease payments expected to be received during the lease term. The City remeasures the lease receivables at subsequent financial reporting dates if one or more of the following changes have occurred at or before the financial reporting date: change in the lease term; change in the interest rate the lessor charges the lessee; and/or change in future contingency lease payments to fixed payments for the remainder of the lease. The key estimates and judgments related to leases include how the City determines the discount rate it uses to discount the expected lease payments to present value, lease term, and lease payments. The City uses its estimated incremental borrowing rate as the discount rate for leases, unless the rate is stated in the lease agreement. The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease receivable are composed of fixed payments from the lessee. Leases with periodic percentage rent increases or flat rate increases that are specified in the lease terms are included in the measurement of the lease receivable. The City calculates the amortization of the discount on the lease receivable on a straight-line basis over the term of the lease and reports that amount as an inflow of resources for the period. Any payments received are allocated first to the accrued interest receivable and then to the lease receivable. This recognition does not apply to short-term leases, contracts that transfer ownership, leases of assets that are investments, or certain regulated leases. The City accounts for the partial or full lease termination by reducing the carrying values of the lease receivable and related deferred inflow of resources, and recognizing a gain or loss for the difference. However, if the lease is terminated as a result of the lessee purchasing an underlying asset from the City, the carrying value of the underlying asset should be derecognized and included in the calculation of any resulting gain or loss. Leases that are considered a short-term lease (12 months or less) are not included in the measurement of the lease receivable. The City recognizes short-term lease payments as revenues based on the payment provisions of the lease contract. Liabilities are only recognized if payments are received in advance, and receivables are only recognized if payments are received subsequent to the reporting period. City as Lessee The City is a lessee for noncancellable leases of property and equipment. The City recognizes a lease liability and an intangible right -to -use lease asset at the beginning of a lease in the government -wide financial statements. In general, the lease liability and the right -to -use assets are measured based on the present value of the expected payments during the term of the lease. Remeasurement of a lease liability and right -to -use lease asset occurs when there is a change in the lease term and/or other changes that are likely to have a significant impact on the lease liability. 44 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) The key estimates and judgments related to leases include how the City determines the discount rate it uses to discount the expected lease payments to present value, lease term, and lease payments. The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate. The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and any purchase option price that the City is reasonably certain to 45 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) 7. Leases (Continued) City as Lessee (Continued) exercise. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options or periods after termination options are only included in the lease term if the lease is reasonably certain to be extended. Leases with payments that depend on an index or rate, such as the Consumer Price Index or market rate, are initially measured using the index or rate as of the commencement of the lease term. Leases with periodic percentage rent increases or flat rate increases that are specified in the lease terms are included in the measurement of the lease liability. The City calculates the amortization of the discount on the lease liability and reports that amount as outflows of resources or interest expense for the period. Payments are allocated first to accrued interest liability and then to the lease liability. The City amortizes the right -to -use lease asset on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset. However, if a lease contains a purchase option that the City has determined is reasonably certain of being exercised, the lease asset is amortized over the useful life of the underlying asset. If the underlying asset is non -depreciable, such as land, the lease asset is not amortized. The City reports the amortization of the lease asset as an outflow of resources, amortization expense, which is combined with depreciation expense related to other capital assets for financial reporting purposes. The City accounts for the partial or full lease termination by reducing the carrying values of the lease asset and lease liability, and recognizing a gain or loss for the difference. However, if the lease is terminated as a result of the City purchasing an underlying asset from the lessor, the lease asset will be reclassified to the appropriate class of owned asset. Leases that are considered a short-term lease (12 months or less), transfers ownership of the underlying asset, assets held as investments, or contain variable payments based on future performance of the City or usage of the underlying assets are not included in the measurement of the lease liability. The City recognizes payments for short-term leases and variable payments as expense in the period in which the City incurs the obligation for those payments. 8. Subscription -Based Information Technology Arrangements (SBITA) The City has noncancellable contracts with SBITA vendors for the right to use information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets). The City recognizes a subscription liability, reported with long-term debt, and a right -to -use subscription asset (an intangible asset), reported with other capital assets, in the government -wide financial statements. At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of SBITA payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for SBITA payments made at or before the SBITA commencement date, plus certain initial implementation costs. Subsequently, the subscription asset is amortized on a straight-line basis over the shorter of the subscription term or the useful life of the underlying IT assets. 46 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. 8. Subscription -Based Information Technology Arrangements (SBITA) (Continued) Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments. • The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs. • The subscription term includes the noncancellable period of the SBITA. • Subscription payments included in the measurement of the subscription liability are composed of fixed payments, variable payments fixed in substance or that depend on an index or a rate, termination penalties if the City is reasonably certain to exercise such options, subscription contract incentives receivable from the SBITA vendor, and any other payments that are reasonably certain of being required based on an assessment of all relevant factors. The City monitors changes in circumstances that would require a remeasurement of its SBITAs and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. 9. 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 assets that applies to a future period(s) and 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. and G. for further information. The City also reports a deferred outflow of resources related to an asset retirement obligation. See footnote IV. Q. 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 assets that applies to a future period(s) and 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 IV.F. and G. 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 and street assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amount becomes available. In addition, there are deferred amounts related to leases, that is initially an offset to lease receivable recorded at lease commencement, and is subsequently recognized as revenue over the life of the lease term. See footnote IV.L. for further information. 47 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. Assets, Liabilities, and Equity (Continued) Assets, Liabilities, and Equity (Continued) 10. 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 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 — net position to have been depleted before unrestricted — net position is applied. 11. 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. 12. 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. H. Revenues and Expenditures/Expenses 48 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. 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 49 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) H. Revenues and Expenditures/Expenses (Continued) 1. Program Revenues (Continued) 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 1 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 the property (real and personal) on January 1 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. L Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. J. Recent Accounting Pronouncements Adopted During fiscal year 2024, the City adopted the following Governmental Accounting Standards Board (GASB) Statements: GASB Statement No. 100, Accounting Changes and Error Corrections, an amendment of GASB Statement No. 62, enhances accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this statement are effective for reporting periods beginning after June 15, 2023. The City is reporting a correction of an error in previously issued financial statements for fiscal year 2024, and note IV.T. provides information on the financial effects associated with the implementation of GASB Statement No. 100. 50 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) K. 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, 2024. Statement No. Adoption Required 101 Compensated Absences September 30, 2025 102 Certain Risk Disclosures September 30, 2025 103 Financial Reporting Model September 30, 2026 Improvements 104 Disclosure of Certain Capital Assets September 30, 2026 IL Reconciliation of Government -Wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the GovernmentWide 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 and right -to -use assets used in governmental activities are not financial resources and, therefore, are not reported in the funds." The details of this $41,341,902 are as follows: Land $ 6,142,418 Construction in Progress 393,403 Buildings 22,936,307 Less: Accumulated Depreciation — Buildings (11,990,089) Improvements Other Than Buildings 9,011,258 Less: Accumulated Depreciation — Improvements Other Than Buildings (5,016,696) Machinery and Equipment 25,326,603 Less: Accumulated Depreciation — Machinery and Equipment (20,930,595) Infrastructure 52,818,522 Less: Accumulated Depreciation — Infrastructure (38,506,302) Right -To -Use Assets - Leases 514,890 Less: Accumulated Amortization — Right -To -Use Assets - Leases (157,310) Right -To -Use Assets - SBITAs 997,838 Less: Accumulated Amortization — Right -To -Use Assets - SBITAs (198,345) Net Adjustment to Increase Fund Balance — Total Governmental Funds to Arrive at Net Position — Governmental Activities $ 41,341,902 51 II CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 Reconciliation of Government -Wide and Fund Financial Statements (Continued) A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the GovernmentWide Statement of Net Position (Continued) 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 $34,540,598 difference are as follows: Bonds Payable $ 29,665,000 Plus: Premiums on Bonds Payable (to be Amortized Over the Life of the Debt) 1,287,309 Tax Notes Payable 390,000 Financed Purchases 288,902 Leases 348,687 SBITAs 676,048 Accrued Interest 373,733 Compensated Absences 1,360,919 Landfill Post -Closure Care Costs 150,000 Net Adjustment to Reduce Fund Balance — Total Governmental Funds to Arrive at Net Position — Governmental Activities $ 34,540,598 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 explains 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 $244,559 difference are as follows: Capital Outlay $ 3,000,498 Depreciation Expense (3,245,057) Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position Of Governmental Activities (244.5591 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 $1,541,522 difference are as follows: Donations of capital assets increase net position in the statement 52 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) of activities, but do not appear in the governmental fund because they are not financial resources. $ 1,541,522 Total Governmental Funds to Arrive at Changes in Net Position of Governmental Activities 53 $ 1,541,522 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 III. Stewardship, Compliance, and Accountability Violations of Legal or Contractual Provisions Note LF.2, on the Excess of Expenditures Over Appropriations, describes budgetary violations that occurred for the year ended September 30, 2024. 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 parry. 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, 2024, the City maintained deposits at a bank with a carrying amount of $49,995,621, and the bank's balances were $49,829,213. As of September 30, 2024, $605,051 was insured by FDIC and $49,224,162 was collateralized with securities held by the pledging financial institution's agent in the name of the City. The City's certificate of deposit totaling $105,051 is considered a deposit for this footnote, but is classified as an investment on the face of the financial statements. B. Investments As of September 30, 2024, the City had the following investments: Type of Security Primary Government Federal Home Loan Mortgage Corporation Federal National Mortgage Association Federal Home Loan Banks Debenture Federal Farm Credit Banks Debenture Certificates of Deposit U.S. Treasury Bills OID U.S. Treasury Notes Paris Economic Development Corporation Texas Class Investment Pool Totals 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, 2024. 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 54 Weighted Weighted Average Average Credit Maturity Maturity Fair Value Rating (Years) (Days) $ 3,260,470 AA+ 6.90 1,877,139 AA+ 6.11 798,598 AA+ 2.24 289,302 AA+ 2.03 105,051 Not Rated 0.58 63,999,373 0.28 22,975,119 0.88 2.361.756 AAAm 72 $ 95,666,808 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, 2024. 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 54 IV. CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 Detailed Notes on All Activities and Funds (Continued) 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 B. Investments (Continued) 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. The City had a zero balance at year end. 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 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, 2024, the City was not exposed to foreign currency risk. 55 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) 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: Receivables: Accrued Interest Property Taxes Sales Taxes Hotel Occupancy Taxes Franchise Taxes Accounts Street Assessments Fines EMS Leases Notes Gross Receivables Less: Allowance for Uncollectibles Net Total Receivables Nonmaj or Governmental General Debt Service Funds Enterprise — $ 23,867 $ - $ 2,420 $ 235,302 1,092,297 126,808 - 17,025 1,843,660 - - - 372,904 - - - 497,451 - - - 568,643 - 20,084 3,538,628 26,473 - - - 2,539,065 - - - 4,969,330 - - - 1,283,446 - 727,515 - 2,099,917 - - - 15,317,053 126,808 750,019 3,790,955 (5,482,623) (31,702) 9 934 430 95 106 S - (49,764) 75( 419 3 741 191 Net receivable balances not expected to be collected within one year are Property Taxes - $642,521, Fines - $37,024, EMS - $621,166, Street Assessments - $26,473, Leases - $1,852,240 and Notes - $1,948,375. Governmental funds report deferred inflows of resources in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At September 30, 2024, the deferred inflows of resources were $2,631,222. At year end, PEDC had a receivable for sales tax of $367,186 and grants of $507,166. The balances are expected to be collected within one year. Accounts payable at September 30, 2024, were as follows: Accounts Governmental Activities General Fund $ 1,174,696 Special Revenues 49,369 56 Wages Totals $ 832,020 $ 2,006,716 6,173 55,542 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Total - Governmental Activities $ 1,224,065 $ 838,193 $ 2,062,258 Business -Type Activities 11,465,640 Improvements Other Than Buildings 4,793,254 Balance Water and Sewer Fund $ 3,724,526 $ 157,129 $ 3,881,655 Total - Business -Type Activities $ 3,724,526 $ 157,129 $ 3,881,655 73,591,407 Total Capital Assets, Fiduciary Activities Capital Assets, Not Being Depreciated 33,591,144 Custodial Fund $ 17,966 S - $ 17,966 Total - Fiduciary Activities $ 17,966 S - $ 17,966 D. Capital Assets Capital assets activity for the year ended September 30, 2024, follows: 11,465,640 Improvements Other Than Buildings 4,793,254 Balance 19,667,792 Infrastructure Balance Right -to -Use Lease -Equipment 9/30/23 Additions Retirements 9/30/24 - Governmental Activities Depreciation/Amortization 73,591,407 Total Capital Assets, Capital Assets, Not Being Depreciated 33,591,144 Land $ 6,142,418 $ - $ - $ 6,142,418 Construction in Progress 311,377 367,955 285,929 393,403 Total Capital Assets, Not Being Depreciated 6,453,795 367,955 285,929 6,535,821 Capital Assets, Being Depreciated/Amortized Buildings 22,523,529 412,778 - 22,936,307 Improvements Other Than Buildings 6,695,332 2,315,926 - 9,011,258 Machinery and Equipment 24,646,150 680,453 - 25,326,603 Infrastructure 52,818,522 - - 52,818,522 Right -to -Use Lease -Equipment 280,928 271,089 37,127 514,890 Subscription -Based IT Asset 218,090 779,748 - 997,838 Total Capital Assets, Being Depreciated/Amortized 107,182,551 4,459,994 37,127 111,605,418 Less Accumulated Depreciation/Amortization for Buildings 11,465,640 Improvements Other Than Buildings 4,793,254 Machinery and Equipment 19,667,792 Infrastructure 37,544,545 Right -to -Use Lease -Equipment 101,545 Subscription -Based IT Asset 18,631 Total Accumulated 37,127 76,799,337 Depreciation/Amortization 73,591,407 Total Capital Assets, Being Depreciated/Amortized, Net 33,591,144 Governmental Activities, 57 524,449 - 11,990,089 223,442 - 5,016,696 1,262,803 - 20,930,595 961,757 - 38,506,302 92,892 37,127 157,310 179,714 - 198,345 3,245,057 37,127 76,799,337 1,214,937 - 34,806,081 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Capital Assets, Net $40,044,939 D. Capital Assets (Continued) Balance Business -Type Activities 339,620 Capital Assets, Not Being Depreciated 874,738 34,455,719 Land $ 339,620 Construction in Progress 14,878,290 Total Capital Assets, - 33,177,315 Not Being Depreciated 15,217,910 Capital Assets, Being Depreciated/Amortized - 28,590,708 Plant, Pumps, and Motors 32,991,325 Distribution System 82,033,482 Collection System 28,300,115 Maintenance Equipment and Vehicles 6,218,660 Furniture and Equipment 2,092,872 Subscription -Based IT Asset 207,587 Total Capital Assets, Being Depreciated/Amortized 151,844,041 Less Accumulated Depreciation/Amortization for Plant, Pumps, and Motors 28,352,646 Distribution System 35,380,197 Collection System 22,765,776 Maintenance Equipment and Vehicles 3,920,526 Furniture and Equipment 1,782,832 Subscription -Based IT Asset 16,376 Total Accumulated Depreciation 92,218,353 58 $ 1,582,892 $ 285,929 $41,341,902 Balance Additions Retirements 9/30/24 469,626 - 28,822,272 2,311,261 - 37,691,458 483,012 - 23,248,788 439,776 - 4,360,302 28,559 - 1,811,391 41,518 - 57,894 3,773,752 - 95,992,105 339,620 20,452,167 874,738 34,455,719 20,452,167 874,738 34,795,339 185,990 - 33,177,315 1,017,381 - 83,050,863 290,593 - 28,590,708 641,877 - 6,860,537 - - 2,092,872 - - 207,587 2.135.841 - 153,979,882 469,626 - 28,822,272 2,311,261 - 37,691,458 483,012 - 23,248,788 439,776 - 4,360,302 28,559 - 1,811,391 41,518 - 57,894 3,773,752 - 95,992,105 D. Capital Assets (Continued) CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) 9/30/23 September 30, 2024 Retirements Business -Type Activities, PEDC ��nita}�ssgts Net IV. I3�tai All Activities Funds7�) 7 843 59 18,814,256 874,738 92,783,116 e otos on and Intangible Asset — Water Rights 4,113,119 - - 4,113,119 Less Accumulated Amortization 977,462 35,633 - 1,013,095 Total Capital Assets, Construction in Progress 92,410 Being Depreciated/Amortization, Net 59,625,688 (1,637,911) - 57,987,777 Total Intangible Asset - Water Rights, Net 3,135,657 (35,633) - 3,100,024 Business -Type Activities, 306,092 92,410 Capital and Intangible Assets, Net $77,979,255 $18,778,623 $ 874,738 $95,883,140 D. Capital Assets (Continued) 59 Balance Balance 9/30/23 Additions Retirements 9/30/24 _ PEDC Capital Assets, Not Being Depreciated Land $ 5,032,692 $ 306,092 $ - $ 5,338,784 Construction in Progress 92,410 - 92,410 - Total Capital Assets, Not Being Depreciated 5,125,102 306,092 92,410 5,338,784 Capital Assets, Being Depreciated/Amortized Equipment 6,895 - - 6,895 Intangible Assets - 9,900 - 9,900 Total Capital Assets, Being Depreciated/Amortized 6,895 9,900 16,795 Less Accumulated Depreciation/Amortization for Equipment 6,895 - - 6,895 Intangible Assets - 1,815 - 1,815 Total Accumulated Depreciation 6,895 1,815 - 8,710 Total Capital Assets, Being Depreciated/Amortization, Net - 8,085 - 8,085 PEDC, Capital Assets, Net $ 5,125,102 $ 314,177 $ 92,410 $ 5,346,869 59 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Depreciation/Amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities General Government $ 326,474 Public Safety 946,229 Public Works, Including Depreciation of General Infrastructure Assets 1,424,140 Health 301,058 Culture and Recreation 116,486 Cox Field Airport 130,670 Total Depreciation/Amortization Expense — Governmental Activities $ 3,245,057 Business -Type Activities Water and Sewer $ 3,809,385 Total Depreciation/Amortization Expense — Business -Type Activities $ 3,809,385 E. Deferred Compensation Plan The City offers its employees two deferred compensation plans created in accordance with Internal Revenue Code Section 457. 60 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans The City participates in a nontraditional defined benefit retirement plan for all full-time employees and maintains a single -employer, defined benefit plan for firefighters. As of and for the year ended September 30, 2024, the two plans had the following balances reported in the government - wide financial statements: Net Pension Liability (Asset) Texas Municipal Retirement System $ (261,675) $ 2,652,417 Retirement Fund (1,358,323) 1,041,582 545,201 65,179 Total Pension Plans Deferred Deferred Outflows Inflows of Pension Racn rrac R-Penl r-Ges EXPG14SG $ 612,816 $ 159,274 Paris Firefighters' Relief and $ (1,619,998) $ 3,693,999 $ 1,158,017 $ 224.453 1. Texas Municipal Retirement System Plan Description The City of Paris participates as one of 934 plans in the defined benefit cash -balance 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 Texas Government Code, Title 8, Subtitle G (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 plan 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.tmrs.com. All eligible employees of the city are required to participate in TMRS. 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 member's benefits are calculated based on the sum of the member's contributions with interest, the City -financed monetary credits with interest, their age at retirement and other actuarial factors. When a member applies for retirement, they have three options to determine how their lifetime monthly benefit will be paid. After a member selects one of the three benefit payment options, they can choose to receive a partial lump -sum distribution to 12, 24, or 36 times the Retiree Life Only monthly benefit, however this partial lump -sum cannot exceed 75% of the total member contributions and interest. Prior service credit is a monetary credit that a city may grant to eligible employees when the City joins TMRS. The credit is used in calculating the employee's retirement benefit and is based on compensation they earned while working for the City before the City joined TMRS. Current service credit is a monetary credit for 61 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. service performed by a member after a city joins TMRS and is based on a city's matching ratio (100%, 150%, or 200%) of the member's total contributions and interest. A change in a city's matching ratio is applied prospectively. Update service credit (USC) is a monetary credit a city may grant to active Texas Municipal Retirement System (Continued) Benefits Provided (Continued) members. The USC calculation is performed annually on a member's account and may grant supplemental financial credits. The USC calculation considers a member's salary history and the City's plan changes and may increase the value of a member's benefit at retirement. 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: Employees Covered by Benefit Terms. At the December 31, 2023, valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 251 Inactive Employees Entitled to but not yet Receiving Benefits 194 Active employees 296 Total 741 Contrihntionc Active member contribution rates are adopted by the City and may be either 5%, 6%, or 7% of an employee's total compensation. The City's contribution rate is determined annually by TMRS using the Entry Age Normal actuarial cost method based on the liabilities created from the City's benefit options and any changes in benefits or actual experience overtime. The City's contribution rate consists of the normal cost contribution rate and the prior service contribution rate, which is calculated as a level percent of the City's reported payroll. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 4.59% and 5.36% in calendar years 2023 and 2024, respectively. The City's contributions to TMRS for the year ended September 30, 2024, were $964,366 and were equal to the required contributions. 62 Plan Year 2023 Employee Deposit Rate 7% Matching Ratio (City to Employee) 2 to 1 Years Required for Vesting 5 Years Retirement Eligibility (Age/Service) 60/5,0/20 Updated Service Credit 0% Retiree Cost of Living Adjustment 0% of CPI Employees Covered by Benefit Terms. At the December 31, 2023, valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 251 Inactive Employees Entitled to but not yet Receiving Benefits 194 Active employees 296 Total 741 Contrihntionc Active member contribution rates are adopted by the City and may be either 5%, 6%, or 7% of an employee's total compensation. The City's contribution rate is determined annually by TMRS using the Entry Age Normal actuarial cost method based on the liabilities created from the City's benefit options and any changes in benefits or actual experience overtime. The City's contribution rate consists of the normal cost contribution rate and the prior service contribution rate, which is calculated as a level percent of the City's reported payroll. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 4.59% and 5.36% in calendar years 2023 and 2024, respectively. The City's contributions to TMRS for the year ended September 30, 2024, were $964,366 and were equal to the required contributions. 62 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Net Pension Liability The City's Net Pension Liability was measured as of December 31, 2023, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Texas Municipal Retirement System (Continued) Actuarial Assumptions The Total Pension Liability in the December 31, 2023, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall Payroll Growth 3.6% to 11.85%, including inflation Investment Rate of Return 6.75% 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. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates are projected on a fully generational basis by the most recent Scale MP -2021 (with immediate convergence) to account for future mortality improvements. Based on the size of the city, rates are multiplied by an additional factor of 100%. For disabled annuitants, the mortality tables for healthy retirees are used with a 4 -year setforward 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 the most recent Scale MP -2021 (with immediate convergence) to account for future mortality improvements subject to the 3.5% and 3% floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS as of December 31, 2022. They were adopted in 2023 and first used in the December 31, 2023 actuarial 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 and 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 by weighting the expected return for each major asset class by the respective target asset allocation percentage. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: 63 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Asset Class Target Allocation Global Equity Core Fixed Income Non -Core Fixed Income Other Public and Private Markets Real Estate Hedge Funds Private Equity Total 64 35.0% 6.0 20.0 12.0 12.0 5.0 10.0 10 0 - 00/0 Long -Term Expected Real Rate of Return (Arithmetic) 6.70% 4.70 8.00 8.00 7.60 6.40 11.60 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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, 2023. 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 for the City. 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 (i.e. the employer normal cost). Net Pension Liability and Changes in the Pension Liability Balance at 12/31/2022 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 12/31/2023 $ 73,141,216 Pension Liability to Changes in the Discount Rate Increase (Decrease) 65 Liability Total Pension Plan Fiduciary (Asset) Liability (a) Net Position (b) (a) — (b) $ 71,258,568 $ 67,807,930 $ 3,450,638 2,236,060 - 2,236,060 4,758,205 - 4,758,205 (244,728) - (244,728) (557,537) - (557,537) - 832,402 (832,402) - 1,269,458 (1,269,458) - 7,852,929 (7,852,929) (4,309,352) (4,309,352) - - (50,126) 50,126 - (350) 350 1,882,648 5,594,961 (3,712,313) $ 73,402,891 $ (261,675) Sensitivity of the Net 65 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) 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 1 -percentage -point lower (5.75%) or 1 -percentage -point higher (7.75%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 5.75% 6.75% 7.75% City's Net Pension Liability (Asset) $ 8,177,048 $ (261,675) $ (7,367,134) Pension Plan Fiduciary Net Position 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 www. tmrs. com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2024, the City recognized pension expense of $159,274. At September 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources 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 66 Deferred Inflows of Resources $ 209,295 403,521 1,921,579 - 730,838 - $ 2,652,417 'S 612,816 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) $730,838 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, 2025. 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, 2025 $ 245,807 2026 386,864 2027 1,327,624 2028 (651,532) 2029 - Thereafter - 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. Eligibility The plan covers current and former firefighters hired prior to October 1, 2022 of the City of Paris, Texas, as well as certain beneficiaries. The plan had a freeze date of September 30, 2022. Effective October 1, 2022, firefighters no longer make contributions to the plan. The City is responsible for the existing unfunded actuarial liability. As of September 30, 2022, the plan was closed to new entrants. Contributions 67 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) The City's liability was fully funded as of September 30, 2024. The City made no contributions during the year ended September 30, 2024, and had no required contributions. 68 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) Employees Covered by Benefit Terms At December 31, 2022, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 46 Inactive employees entitled to but not yet receiving benefits 8 Active employees 47 Total 101 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, 2024, and the most current available information required for disclosure under GASB Statement No. 67 is based on an actuarial valuation as of December 31, 2022. The measurement was completed using a rollforward of the December 31, 2022 actuarial valuation which was based upon member census data as of the same date. The measurements were also based on audited December 31, 2023 financial information. The actuarial cost method used in the December 31, 2022 valuation is the Normal to Pure Unit Credit Actuarial Cost Method. The long-term expected real rate of return was developed using the annual money -weighted internal rate of return, net of pension plan investment expense. Inputs to the money -weighted internal rate of return calculation are determined at least monthly. 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. 69 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) 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. Net Pension Liability and Changes in the Pension Liability Balance at 12/31/2022 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 (103,194) 1,040,583 Increase (Decrease) Plan Liability Total Pension Fiduciary Net (Asset) Liability (a) Position (b) (a) — (b) $ 15,473,252 $ 15,687,798 $ (214,546) 1,078,958 - 1,078,958 2,257,162 (2,257,162) (1,182,152) (1,182,152) - (34,427) 34,427 (1,143,777) Balance at 12/31/2023 $ 15,370,058 $ 16,728,381 $ (1,358,323) 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 70 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) if it were calculated using a discount rate that is 1 -percentage -point lower (6.25%) or 1 -percentage -point higher (8.25%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 6.25% 7.25% 8.25% Net Pension Liability $379,151 $(1,358,323) $(2,789,322) Pension Plan Fiduciary Net Position 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, 2024, the City recognized pension expense of $65,179. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) At September 30, 2024, 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 $ 57,423 $ 520,195 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 984,159 25,006 1.041.582 $ 545,201 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, 2025 $ 108,100 2026 185,395 2027 318,047 2028 (170,666) 2029 55,505 Thereafter - Total $ 496 381 71 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 2. Firefighters' Relief and Retirement Fund (Continued) G. Other Post Employment Benefit (OPEB) Obligations The City also participates in a single -employer defined benefit program, which operates like a group -term life insurance plan, operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF) and maintains a single -employer plan for eligible retirees, the City of Paris Retiree Health Care Plan. As of and for the year ended September 30, 2024, the two plans had the following balances reported in the government -wide financial statements: Total Deferred Deferred OPEB Outflows Inflows OPEB Liability (Asset) of Resources of Resources Expense Supplemental Death Benefits Fund $ 1,098,411 $ 142,047 $ 275,269 $ 22,311 City of Paris Retiree Healthcare Plan Total OPEB Plans 72 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 1. Supplemental Death Benefits Fund Plan Description The 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 participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. 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, 2023 valuation and measurement date, the following employees were covered by benefit terms: Inactive employees or beneficiaries currently receiving benefits 188 Inactive employees entitled to but not yet receiving benefits 47 Active employees 296 Total 531 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 0.51% and 0.41% of gross earnings in calendar year 2023 and 2024, respectively. The City's 73 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) contributions to TMRS SDBF for the year ended September 30, 2024 were $81,851 and were equal to the required contributions. 1. Supplemental Death Benefits Fund (Continued) Changes in the OPEB Liability_ Balance at 12/31/22 Changes for the year: Service Cost Interest Change of Benefit Terms Difference Between Expected and Actual Experience Changes of Assumptions Contributions — Employer Increase (Decrease) Total OPEB Liability $ 1,002,994 43,524 40,511 8,303 52,044 - Contributions —Employees - Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Administrative Expense - Other Changes Changes 95,417 Balance at 12/31/23 (48,965) Net $ 1,098,411 The following presents the total SDBF OPEB liability of the City, calculated using the discount rate of 3.77 %, as well as what the City's total SDBF OPEB liability (asset) would be if it were calculated using a discount rate that is 1 -percentage -point lower (2.77%) or 1 -percentage -point higher (4.77%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 2.77% 3.77% 4.77% Total OPEB Liability $1,294,230 $1,098,411 $943,241 Supplemental Death Benefits Fund Net Position 74 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) G. Other Post Employment Benefit (OPEB) Obligations (Continued) 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. tmrs. com. 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, 2024, the City recognized OPEB expense in the amount of $22,311. At September 30, 2024, 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) $ 6,636 $ 35,718 Changes in Actuarial Assumptions 79,507 239,551 Differences Between Projected and Actual Investment Earnings (Net of Current Year Amortization) - - Contributions Subsequent to the Measurement Date 55,904 - Total $ 142,047 $ 275,269 $55,904 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, 2025. Other amounts reported as deferred outflows and inflows of resources related to OPEB, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2025 $ (93,941) 2026 (116,584) 75 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) 2027 9,524 2028 11,875 2029 - Thereafter - Total $ (189,126) 2. City of Paris Retiree Health Care Plan Plan Description The City has in effect a single employer plan (the 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. 76 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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) 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 benefits 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, 2023, the maximum amount of the monthly subsidy is $595. Employees Covered by Benefit Terms At the December 31, 2023 valuation and measurement date, the following employees were covered by benefit terms: Inactive Retirees or Beneficiaries Currently Receiving Benefits 10 Inactive, Nonretired Members - Active employees 42 Total 52 Contributions The City's contributions are financed on a pay-as-you-go basis. For the year ended September 30, 2024, the contributions were approximately $19,191. 77 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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 3.77%, as well as what the City's total Plan OPEB liability (asset) would be if it were calculated using a discount rate that is 1 -percentage -point lower (2.77%) or 1 -percentage -point higher (4.77%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 2.77% 3.77% 4.77% Total OPEB Liability $2,871,511 $2,722,955 $2,581,646 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: 78 Increase (Decrease) Total OPEB Liability Balance at 12/31/2022 $ 3,173,612 Changes for the year: Service Cost 53,983 Interest 126,693 Change of Benefit Terms - Difference Between Expected and Actual Experience (729,798) Changes of Assumptions 243,223 Contributions — Employer - Contributions —Employees - Net Investment Income - Benefit Payments, Including Refunds of Employee Contributions (144,730) Administrative Expense - Other Changes (28) Net Changes (450,657) Balance at 12/31/2023 $ 2,722,955 The following presents the total Plan OPEB liability of the City, calculated using the discount rate of 3.77%, as well as what the City's total Plan OPEB liability (asset) would be if it were calculated using a discount rate that is 1 -percentage -point lower (2.77%) or 1 -percentage -point higher (4.77%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 2.77% 3.77% 4.77% Total OPEB Liability $2,871,511 $2,722,955 $2,581,646 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: 78 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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) Current Healthcare Cost Trend Rate 1% Decrease Assumption 1% Increase Total OPEB Liability $2,565,639 $2,722,955 $2,892,603 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, 2024, the City recognized OPEB expense in the amount of $(43,233). At September 30, 2024, 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) Changes in Actuarial Assumptions Contributions Subsequent to the Measurement Date Total $ - $ 625,644 233,628 210,589 124.678 - $ 358,306 $ 836,233 $124,678 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, 2025. Other amounts reported as deferred outflows and inflows of resources related to OPEB, will be recognized in pension expense as follows: Fiscal Year Ended September 30, 2025 $ (264,577) 2026 (245,695) 2027 (92,333) 2028 - 2029 - Thereafter - Total $ (602,605) H. Water Sales and Commitments 1. Water Sales 79 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 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) The City has contracts extending for several years to sell treated and untreated water to six entities. Total water sales under these contracts to these entities during the year ended September 30, 2024, were approximately $3,232,154. 80 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) H. Water Sales and Commitments (Continued) 2. Construction Commitments The City has active construction projects as of September 30, 2024. At year-end, the City's commitments with contractors are as follows: Project To Date Commitment Waste Water Treatment Plant Improvements Phase 1 $ 23,147,780 $ 39,704,862 Waste Water Treatment Plant Improvements — Phase 2 838,559 _39449,94i Total $ 23,986,339 78.854.803 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 threesevenths 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, 2024, and may be renewed 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. Other Commitments - PEDC Metro Gate — On January 22, 2021, the Board of Directors 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 at September 30, 2024 is estimated to be $69,000. Lionshead Specialty Tire and Wheel — On June 21, 2022, the Board of Directors reached a performance agreement with Lionshead Paris, LLC. PEDC will invest up to $807,526 in cash, land, and improvements in connection with a new assembly and warehousing plant, job creation, and employment retention. The remaining balance at September 30, 2024 is estimated to be $583,320. 81 IV. CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 Detailed Notes on All Activities and Funds (Continued) Universal Fabricating USA, Inc. — On February 21, 2023, the Board of Directors reached a performance agreement with Universal Fabricating USA, Inc. PEDC will provide up to $600,000 for the creation of 100 full-time employees paid out in installments over 5 years and $75,000 as an employee relocation grant. The remaining balance at September 30, 2024 is estimated to be $600,000. H. Water Sales and Commitments (Continued) 5. Other Commitments — PEDC (Continued) Ametsa Packaging, LLC — On July 12, 2023, the Board of Directors reached a performance agreement with Ametsa Packaging, LLC. PEDC will provide up to $665,000 for the creation of 95 full-time employees paid out in installments over 5 years and $100,000 as an equipment relocation grant. The remaining balance at September 30, 2024 is estimated to be $532,000. Rodgers -Wade Manufacturing Company, Inc. — On October 17, 2023, the Board of Directors reached an incentive agreement with Rodgers -Wade Manufacturing Company, Inc. PEDC will provide up to $280,000 for the creation of 57 full-time employees paid out in installments over 3 years. The remaining balance at September 30, 2024 is estimated to be $280,000. L 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, 2024. There have been no settlements in excess of insurance coverage in any of the prior three fiscal years. J. Financed Purchases In September 2015, the City began leasing equipment under an agreement classified as a financing purchase due to a bargain purchase option. Equipment purchased through the agreement are pledged as security for repayment of the lease liability. The Financed Purchase — Equipment, at Cost $ 617,114 present value and accumulated Less: Accumulated Amortization 546,938 amortization are Financed Purchase —Equipment, Net $ 70,176 as follows: The future minimum payments required under the financing purchase and the present value of the net minimum payments as of September 30, 2024, are as follows: Year Ending September 30, 82 Amount S 72,353 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) 2025 Total Minimum Payments Less: Amount Representing Interest Present Value of Net Minimum Payments Less: Current Maturities of Financing Purchase Obligation Long -Term Portion of Financing Purchase Obligation J. Financed Purchases (Continued) 72,353 (2,177) 70,176 (70,176) The future minimum payments required under the financing purchase and the present value of the net minimum payments as of September 30, 2024, are as follows: Year Ending September 30, Amount 2025 $ 114,337 2026 114,337 Total Minimum Payments 228,674 Less: Amount Representing Interest (9,948) Present Value of Net Minimum Payments 218,726 Less: Current Maturities of Financing Purchase Obligation (107,798) Long -Term Portion of Financing Purchase Obligation $ 110,928 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 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 $9,750,000 General Obligation Bonds, Series 2017, due in annual installments varying from $440,000 to $635,000 with final payment due June 15, 2037. On July 17, 2017, the City issued this series bearing interest 83 IV. CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 Detailed Notes on All Activities and Funds (Continued) 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, landscaping, 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. The bonds are reported as General Obligation debt. $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 semiannually at rates ranging from 0.98% 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. 84 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) General Obligation, Certificates of Obligation, and Other Long -Term Obligations (Continued) K. Long -Term Liabilities (Continued) $8,780,000 General Obligation Bonds, Series 2016, due in annual installments varying from $375,000 to $535,000 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. $1,390,000 General Obligation Bonds, Series 2018, due in annual installments of $130,000 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, landscaping, 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 $150,000 to $165,000 with final payment due June 15, 2030. Interest is payable semiannually 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 of $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 contractual 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 $195,000 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. 85 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) General Obligation, Certificates of Obligation, and Other Long -Term Obligations (Continued) $43,855,000 Combination Tax and Surplus Revenue Certificates 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 K. Long -Term Liabilities (Continued) 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. $12,355,000 General Obligation Pension Bonds, Taxable Series 2022, due in annual installments varying from $270,000 to $855,000 with final payment due on June 15, 2042. Interest is payable semi-annually at rates ranging from 4.0% to 5.0%. On June 15, 2031, or on any date thereafter, the bonds may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued August 31, 2022 at a discount for the purpose of fund all or any part of an unfunded, accrued liability of the City to a public pension fund as determined by actuarial analysis. The bonds are reported as obligations of the Enterprise Fund. $26,795,000 Waterworks and Sewer System Revenue Bonds, Series 2022, due in annual installments varying from $400,000 to $1,725,000 with final payment due on June 15, 2051. Interest is payable semi-annually at rates ranging from 4.0% to 5.25%. On June 15, 2031, or any date thereafter, the bonds may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued on November 9, 2022, at a discount for the purpose of acquiring, constructing, installing and equipping additions, improvements and extensions to the City's waterworks and sewer system. The bonds are reported as obligations of the Enterprise Fund. $20,570,000 General Obligation Refunding Bonds, Series 2023, due in annual installments varying from $450,000 to $1,485,000 with final payment due on December 15, 2043. Interest is payable semi-annually at 5.00%. On December 15, 2032, or any date thereafter, the bonds may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued on December 14, 2023, at a premium to pay off the Series 2013 General Obligation Bonds and to fund Phase II of the wastewater treatment plant. The bonds are reported as obligations of the General Obligation Debt. $42,790,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2024, due in annual installments varying from $515,000 to $2,630,000 with final payment due on June 15, 2054. Interest is payable semi-annually at rates ranging from 4.0% to 5.0%. On June 15, 2033, or any date thereafter, the bonds may be redeemed prior to their scheduled maturities at the City's option. The bonds were issued on April 8, 2024, at a premium for the purpose of constructing the final phase of the City's wastewater treatment plant. The bonds are reported as obligations of the Enterprise Fund. 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 86 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) General Obligation, Certificates of Obligation, and Other Long -Term Obligations (Continued) for the benefit of the obligations. At September 30, 2024, the fund balances in the Interest and Sinking Funds are $3,089,892. 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. At September 30, 2024, there were no assets restricted to pay this liability. K. Long -Term Liabilities (Continued) A summary of long-term liability transactions for the year ended September 30, 2024, follows: Governmental Activities Debt Payable Bonds Payable Tax Notes Payable Premium Financed Purchases Total Debt Payable Compensated Absences Right -to -use Lease Liability Right -to -use SBITA Liability Landfill Post -Closure Care Costs Governmental Activities Business -Type Activities Debt Payable Balance Balance September 30, September 30, Due Within 2023 Additions Reductions 2024 One Year $ 9,860,000 $ 20,570,000 $ 765,000 $ 29,665,000 $ 1,235,000 580,000 - 190,000 390,000 195,000 86,562 1,279,699 78,952 1,287,309 - 461,737 - 172,835 288,902 177,974 10,988,299 21,849,699 1,206,787 31,631,211 1,607,974 1,297,715 911,409 848,205 1,360,919 145,298 178,441 271,089 100,843 348,687 99,535 167,524 779,748 271,224 676,048 213,506 150,000 - - 150,000 - $ 23.811.945 $ 2,427,059 $ 34.166.865 $ 2,066,313 Balance September 30, 2023 Additions 87 Balance September 30, Due Within Reductions 2024 One Year CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) General Obligation, Certificates of Obligation, and Other Long -Term Obligations (Continued) $ 3,178,488 Bonds Payable $ 113,005,000 $ 42,790,000 $ 27,025,000 $ 128,770,000 $ 3,830,000 Premium 2,574,533 1,489,271 236,323 3,827,481 - Discount (322,835) - (19,703) (303,132) - Long -Term Liabilities $ 12,781,979 Business -Type Activities Long -Term Liabilities Total Debt Payable 115,256,698 44,279,271 27,241,620 132,294,349 3,830,000 Compensated Absences 222,773 172,229 172,229 222,773 22,277 Right -to -use SBITA Liability 167,524 - 36,772 130,752 40,037 Component Unit Notes Payable Component Unit Long -Term Liabilities $ 115,646,995 $ 44,451,500 $ 27,450,621 $ 132,647,874 $ 3,892,314 $ 2,247,922 % - $ 148,337 $ 2,099,585 $ 151,542 $ 2,247,922 $ - $ 148,337 $ 2,099,585 $ 151,542 K. Long -Term Liabilities (Continued) For governmental activities, pension -related debt and compensated absences are liquidated by the general fund. Long-term debt service requirements for the next five years and after, in five year increments, are as follows: Year General Obligation Water and Sewer PEDC Ending September Principal Interest Principal Interest Principal Interest 2025 $ 1,430,000 $ 1,247,009 $ 43,451 2026 2,055,000 1,188,068 40,176 2027 1,940,000 1,113,222 36,830 88 $ 3,830,000 $ 3,178,488 2,210,000 5,378,810 2,825,000 4,889,151 $ 151,542 154,817 158,163 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) General Obligation, Certificates of Obligation, and Other Long -Term Obligations (Continued) 2028 2,020,000 1,036,338 3,125,000 4,762,217 161,581 33,412 2029 1,560,000 973,593 3,135,000 4,620,172 165,073 29,920 2030-2034 7,220,000 4,034,758 18,890,000 20,780,194 1,308,409 54,158 2035-2039 7,090,000 2,469,998 21,995,000 16,567,090 - -2040-2044 6,740,000 873,250 24,420,000 11,956,439 - - 2045-2049 - - 26,445,000 7,244,070 - - 2050-2054 - - 19,265,000 2,436,545 - - 2055 - - 2,630,000 111,775 - - Totals $ 30,055,000 $ 12,936,236 $ 128,770,000 $81,924,951 $ 2,099,585 $ 237,947 PEDC has an outstanding $2,500,000 Note Payable to the City issued December 27, 2021, due in monthly installments of $16,249 through November 27, 2031 and a final payment of $940,083 on December 27, 2031, bearing an interest rate of 2.14%. At September 30, 2024, the balance was $2,099,585. L. Leases Lease Receivable The City, as a lessor, leases City -owned properties such as land, tower space, and airport hangars. The related receivables are presented in the Statement of Net Position for the amounts equal to the present value of lease payments expected to be received during the lease term. Revenue recognized under GASB 87 lease contracts during the year ended September 30, 2024 was $227,823, which includes both lease revenue and interest. As of September 30, 2024, the City had fifty-one active leases. The leases have receipts that range from $100 to $26,444 and interest rates that range from 0.2480% to 3.3600%. As of September 30, 2024, the total combined value of the lease receivable is $2,010,961, the total combined value of the short-term lease receivable is $158,721, and the combined value of the deferred inflow of resources is $1,912,209. The leases had no variable receipts or other receipts not included in the lease receivable with in the fiscal year. 89 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) L. Leases (Continued) Lease Receivable (Continued) The City expects to receive the following lease receivable amounts for Governmental Activities in subsequent years as follows: Year Ending General Activities September 30, Principal S 2025 158,720 Interest $ 37,161 2026 165,741 34,647 2027 172,971 32,007 2028 172,320 29,337 2029 160,386 26,762 2030-2034 527,029 102,100 2035-2039 409,146 53,808 2040-2044 157,698 17,970 2045-2049 17,895 7,505 2050-2054 17,966 5,835 2055-2059 19,721 4,079 2060-2064 21,648 2,152 2065-2069 9,720 379 Totals $ 2,010,961 $ 353,742 Lease Liability The City, as a lessee, has entered into lease agreements involving equipment. The related obligations are presented in the amounts equal to the present value of lease payments, payable during the remaining lease term. As the lessee, a lease liability and the associated lease asset is recognized on the government -wide Statement of Net Position. The City did not incur expenses related to its leasing activities related to residual value guarantees, lease termination penalties or losses due to impairment. As a lessee, there are currently no agreements that include sale- leaseback and lease -leaseback transactions. As of September 30, 2024, the City had fourteen active leases. The leases have payments that range from $702 to $54,116 and interest rates that range from 0.2480% to 4.8860%. As of September 30, 2024, the total combined value of the lease liability is $348,687, the total combined value of the short-term lease liability is $99,535. The combined value of the right to use asset, as of September 30, 2024 of $514,890 with accumulated amortization of $158,036 is included with the lease class activities table found below. The leases had no variable payments or other payments not included in the lease liability with in the fiscal year. 90 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Asset Class Equipment As of Fiscal Year -End Lease Asset Accumulated Value Amortization $ 514,890 $ 158,036 Total Leases $ 514,890 $ 158,036 L. Leases (Continued) Lease Liability (Continued) As of September 30, 2024, the City had a minimum principal and interest payment requirements for its leasing activities, with a remaining term more than one year, as follows: Year Ending Governmental Activities September 30, Principal S 2025 99,535 Interest $ 11,585 2026 98,758 8,442 2027 97,878 5,237 2028 45,750 1,936 2029 6,766 63 Totals $ 348,687 $ 27,263 M. Subscription -Based Information Technology Arrangements (SBITA) As of September 30, 2024, the City has eight active subscriptions. The subscriptions have payments that range from $21,312 to $105,000 and interest rates that range from 2.6500% to 3.5490%. As of September 30, 2024, the total combined value of the subscription liability is $806,800, and the total combined value of the short-term subscription liability is $253,543. The combined value of the right to use asset, as of September 30, 2024 of $1,205,426 with accumulated amortization of $256,240 is included within the subscription class activities table found below. The subscriptions had no variable payments or other payments not included in the subscription liability within the fiscal year. Asset Class Software As of Fiscal Year -End Subscription Asset Value $ 1,205,426 91 Accumulated Amortization $ 256,240 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Total Subscriptions $ 1,205,426 $ 256,240 As of September 30, 2024, the City had a minimum principal and interest payment requirements for its SBITA activities, with a remaining term more than one year, as follows: Year Ending Governmental Activities Business -Type Activities September 30, Principal al Interest Principal Interest 2025 $ 213,506 $ 21,697 $ 40,037 $ 4,132 2026 192,410 15,001 43,511 2,867 2027 149,859 9,081 47,204 1,492 2028 69,563 4,250 - - 2029 50,710 1,790 - - Totals $ 676,048 $ 51,819 $ 130,752 8.491 N. Interfund Transactions and Balances During the year ended September 30, 2024, the City made transfers from the General fund to the Water and Sewer fund of $1,461,951 to reclassify grant revenue. The City also made transfers from the Debt Service Fund to the Water and Sewer fund of $21,646,488 to reclassify debt issuance. Other minor transfers were made between funds making up transfers of: General Debt Service Other Governmental Water and Sewer 273,854 82,144 355,998 Transfers In Other Water and General Governmental Sewer Transfers Out $ 71,954 177,291 55,872 $ 1,461,951 21,899,943 $ 1,533,905 22,077,234 55,872 $ 507,017 $ 154.098 $ 23.36L894 $ 24,023.009 Due To/Due Froms for the year ended September 30, 2024 consisted of the following: 92 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Due to Debt Service Fund From: General Fund $ 82,867 Total Due to Debt Service Fund $ 82,867 Due to Special Revenue Fund From: General Fund $ 14,502 Total Due to Special Revenue Fund $ 14,502 Due to Fiduciary Fund From: General Fund $ 640 Total Due to Fiduciary Fund $ 640 The amounts payable to the Funds above relate to operating activities. These balances are scheduled to be collected in the subsequent year. O. 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, 2024, these accounts, shown as cash and investments on the Statement of Net Position — Proprietary Funds, are as follows: Reserve Fund Contingency Fund $ 19,313,122 995,635 Collections of notes receivable are restricted by grant agreements to be used for building rehabilitation. O. Restricted Net Position and Restricted Asset Accounts (Continued) The balances of the City's restricted asset accounts are as follows: Cash and Cash Equivalents 93 Certificates of Deposit and Other Investments CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) Lake Crook $ 4,425 $ - Contingency 954,967 40,668 Loan 42,048 - Bond Reserves and Sinking Funds 10,250,416 9,062,706 Construction 2,935,441 65,703,196 Other 342,521 - Total Restricted Assets $ 14,529,818 $ 74,806,570 P. Related Party The Mayor 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/burdenrelationship is not present; therefore, it is considered a related organization. Q. 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 waste water utility system was estimated as of September 30, 2024 to be $5,684,834. 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 waste water utility system laws and regulations. At September 30, 2024, there were no assets restricted to pay this liability. 94 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) R. Tax Abatements As of September 30, 2024, the City provides tax abatements through two programs -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 Program Amount of Taxes Abated 2023-24 Industrial Incentives $ 1,123,805 Residential 1,516 S. Subsequent Events Subsequent events have been evaluated through September 19, 2025 the date the financial statements were available to be issued. In October 2024, the City entered into ground lease agreements with a present value of $352,658. The lots will be used to build 9 private hangars for storage of personal aircraft at Cox Field Airport. In November 2024, the City was awarded a Texas Community Development Block Grant in the amount of $500,000 for the reconstruction of sewer mains located in the City. In February 2025, the City entered into a participation agreement with the State of Texas for the development of a public aviation facility at Cox Field Airport. The total cost of the project is estimated to be $1,200,000, of which the City will be responsible for $60,000. The remaining costs will be eligible for federal financial assistance. In April 2025, the City entered into a development agreement with Lone Star Planned Developments, LLC in relation to the Forestbrook Public Improvement District No. 1. In April 2025, the City approved a contract in the amount of $333,650 for concrete demolition and construction services. In June 2025, the City approved a contract in the amount of $1,935,222 for the 2025 Mill and Overlay Project for twelve streets in the City. 95 CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 IV. Detailed Notes on All Activities and Funds (Continued) In July 2025, the City issued $3,995,000 Tax Notes, Series 2025 for the purpose of purchasing equipment and vehicles. The interest rate is payable semi-annually at a rate of 5.0%, with the final payment due on June 15, 2032. S. Subsequent Events (Continued) In July 2025, the City approved PEDC's purchase of 102 acres for $1,028,000. T. Adjustments and Restatements of Beginning Balances Correction of an Error in Previously Issued Financial Statements During the fiscal year 2024, the City identified an error in the prior year's financial statements related to the recording of a grant match in General Fund. In the prior fiscal year, the City incorrectly recorded a grant match as accounts payable and an expenditure in the General Fund. Upon further review, it was determined that the transaction did not represent a liability or expense in that period. Rather, the appropriate accounting treatment was to record an interfund transfer in the current fiscal year, when the actual transfer of resources occurred. In accordance with GASB Statement No. 100, the City has corrected the prior period error by removing the accounts payable and expense from the General Fund financial statements for the year ended September 30, 2023. The effect of correcting this error is shown in the table below. Fund Balance at September 30, 2023, as previously reported Error Correction Fund Balance at September 30, 2023, as restated 96 General Fund $ 27,329,955 214,318 $ 27,544,273 REQUIRED SUPPLEMENTARY INFORMATION CITY OF PARIS, TEXAS Schedule 1 Required Supplementary Information Texas Municipal Retirement System - Schedule of Changes in Net Pensioi Liability aid Related Ratios Year Ended September 30, 2024 Plan Year Ended December 31, 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service Cost $ 2,236,060 $ 1,660,689 $ 1,443,089 $ 1,184,350 $ 1,233,792 $ 1,198,978 $ 1,192,255 $ 1,190,613 $ 1,084,666 $ 1,084,779 Interest 4,758,205 4,595,080 4,487,312 4,344,087 4,233,112 4,092,798 3,952,930 3,826,176 3,718,773 3,592,818 Changes in Beiefit Terms - - 390,679 - - - - - 1,615,467 - Differences Between Expected aid Actual Experience (244,728) (18,490) (749,803) (321,817) (260,390) (118,708) 19,208 (211,467) (159,282) (191,294) Changes inAssumptiois (557,537) - - - (110,977) - - - - - BeiefitPayments, Including Refunds of Employee Contributions (4,309,352) (3,907,254) (3,748,402) (3,731,229) (3,122,282) (3,101,195) (3,090,075) (2,766,533) (2,741,148) Net Change in Total Pension Liability 1,882,648 2,330,025 1,822,875 1,475,391 1,973,255 2,071,873 2,074,318 2,038,789 3,518,476 1,853,665 Total Pension Liability - Begiiiing 71,258,568 02,638) 68,928,543 67,105,668 65,630,277 63,657,022 61,585,149 59,510,831 57,472,042 53,953,566 52,044,907 Total Pension Liability - Ending $ 73.747 276 $ 77 25R_56R $ 6R 92R_543 $ 67.705 66R $ 65 X30.277 R 63 X57.022 $ 67585.749 $ 59.570_R37 $ 57.472.042 - L53 95 -3_5(j6 -Plan Fiduciary Net Position Contributions - Employer $ 832,402 $ 1,049,532 $ 878,482 $ 852,067 $ 845,646 $ 825,989 $ 817,914 $ 669,501 $ 700,159 $ 721,733 Contributions - Employee 1,269,458 999,555 783,806 712,034 730,054 705,973 704,087 701,189 676,545 667,048 Net Investment Income 7,852,929 (5,492,045) 8,898,242 4,972,797 8,988,070 (1,845,475) 7,698,497 3,607,913 80,774 3,031,103 Benefit Payments, Including Refunds of Employee Contributions (4,309,352) (3,907,254) (3,748,402) (3,731,229) (3,122,282) (3,101,195) (3,090,075) (2,766,533) (2,741,148) (2,632,638) Administrative Expense (50,126) (47,640) (41,245) (32,223) (50,855) (35,702) (39,921) (40,766) (49,204) (31,651) Other (350) 56,848 282 (1,257) (1,527) (1,865) (2,023) (2,196) (2,430) ? Net Change in Plan Fiduciary Net Position 5,594,961 (7,341,004) 6,771,165 2,772,189 7,389,106 (3,452,275) 6,088,479 2,169,108 (1,335,304) 1,752,993 Plan Fiduciary Net Position 60Zl - Beginning 67,807,930 75,148,934 68,377,769 65,605,580 58,216,474 61,668,749 55,580,270 53,411,162 54,746 466 52,993,473 Plan FiduciaryNet Position - Ending $ 73,402,891$ 67.807930 $ 75.148,934 $ 68.377.769 $ 65.605.580 $ 58216.474 $ 61,6 8,749 $ 55.580270 $ 53.411.162 $ 54,746,466 City's Net Pension Liability (Asset) - Ending $ (261,675) $ 3,450,638 $ (6,220,391) $ (1,272,101) $ 24,697 $ 5,440,548 $ (83,600) $ 3,930,561 $ 4,060,880 $ (792,900) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 100.36% 95.16% 109.02% 101.90% 99.96% 91.45% 100.14% 93.40% 92.93% 101.47% Covered Payroll $ 18,135,117 $ 14,279,353 $ 12,461,905 $ 11,867,235 $ 12,167,574 $ 11,766,222 $ 11,734,791 $ 11,684,128 $ 11,203,172 $ 11,177,790 City's Net Pension Liability as a Percentage of Covered Payroll -1.44% 24.17% -49.92% -10.72% 0.20% 46.24% -0.71% 33.64% 36.25% -7.09% Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. CITY OF PARIS, TEXAS Schedule 2 Required Supplementary Information Texas Municipal Retirement System - SchedWe of City Peisioi Coitributiorvs Year Ended September 30, 2024 77 Contractually Required Fiscal Year Contribution Contribution in Relation to the Contractually Required Fiscal Year Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll Notes to Schedule Valuation Date Actuarially determined contribution rates are calculated as of December 31 and become effective January, 13 months later. Fiscal Year Ended September 30, Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 $ 964,366 $ 947,941 $ 972,171 $ 809,036 $ 852,884 $ 834,605 $ 825,691 $ 801,727 $ 733,564 $ 704,441 (964,366) (947,941) (972,171) (809,036) (852,884) (834,605) (825,691) (801,727) (733,564) information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. CITY OF PARIS, TEXAS Required Supplementary Information Paris Firefighters' Relief and Retirement Fund - Schedule of Changes in Net Pension Liability and Related Ratios (704441) $ 18,722,788 $ 17,888,791 $ 13,050,044 $ 11,761,104 $ 11,975,225 $ 11,980,216 $ 11,846,360 $ 11,615,574 $ 12,058,579 $ 11,203,172 5.15% 5.30% 7.45% 6.88% 7.12% 6.97% 6.97% 6.90% 6.08% 6.29% $ $ $ $ $ $ $ $ $ $ Notes to Schedule Valuation Date Actuarially determined contribution rates are calculated as of December 31 and become effective January, 13 months later. Methods and Assumptions used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period N/A Asset Valuation Method 10 year smoothed market; 12% soft corridor Inflation 2.50% Salary Increases 3.60% to 11.85% including inflation Investment Rate of Return 6.75% Retirement Age Experience -based table of rates that vary by age. Last updated for the 2023 valuation pursuant to an experience study of the period ending 2022. Mortality Post Retirement 2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates are projected on a fully generational basis by the most recent Scale MP -2021 (with immediate convergence). Pre -retirement PUB(10) mortality tables, with 110% of the Public Safety table used for males and 100% of the General Employee table used for females. The rates are projected on a fully generational basis by the most recent Scale MP -2021 (with immediate convergence). Other Information There were no benefit changes during the year Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. CITY OF PARIS, TEXAS Required Supplementary Information Paris Firefighters' Relief and Retirement Fund - Schedule of Changes in Net Pension Liability and Related Ratios Year Ended September 30, 2024 Total Pension Liability Plan Year Ended December 31, 2023 2022 2021 2020 2019 2018 2017 78 Schedule 3 2016 2015 2014 Service Cost $ - $ 185,002 $ 273,163 $ 263,769 $ 244,258 $ 263,477 $ 254,567 $ 258,484 $ 247,353 $ 236,701 Interest 1,078,958 1,139,106 1,128,647 1,098,206 1,081,834 1,109,567 1,094,074 1,109,262 1,092,874 407,996 397,475 388,212 1,087,700 Changes in Benefit Terms - (1,165,161) - - - - - - - - Differences Between Expected aid Actual Experience - (344,787) - 125,175 - (650,764) - (65,973) - (238,406) Changes in Assumptions - 733,322 - - - 562,256 - 616,266 - (1,249,430) (1,136,379) (1,156,654) 134,458 Benefit Payments, Including Refunds of Employee Contributions (1,182,152) (1,202,081) (1,136,694) (1,016,641) (1,222,906) (1,052,502) (1,249,430) (1,136,379) (1,156,654) Net Change in Total Pension Liability (103,194) (654,599) 265,116 470,509 103,186 232,034 99,211 781,660 183,573 19,489 Total Pension Liability (1 200,964) - Beginning 15,473,252 16,127,851 15,862,735 15,392,226 15,289,040 15,057,006 14,957,795 14,175,471 13991 898 13,97?,409 Total Pension I iabilily - Ending $ 15370.058 % 15,47x,252 % 16.127,851 % 15 862735 $ 15392 226 % 15 289.040 % 15 057 006 % 14.957.131 $ 14.175 471 % 13,991,898 Plan Fiduciary Net Position Contributions- Employer $ - $ 12,521,952 $ 457,000 $ 388,839 $ 393,136 $ 336,951 $ 326,396 $ 317,902 $ 310,483 $ 281,896 Contributions- Employee - 425,088 522,286 444,388 449,298 411,944 407,996 397,475 388,212 352,370 Net Investment Income 2,257,162 (1,048,039) 471,438 482,463 758,981 (302,649) 578,324 377,387 (121,104) 245,555 Benefit Payments, Including Refunds of Employee Contributions (1,182,152) (1,202,081) (1,136,694) (1,016,641) (1,222,906) (1,052,502) (1,249,430) (1,136,379) (1,156,654) (1,200,964) Administrative Expense (34,427) (41,262) (52,994) (25,739) (33,025) (31,444) (37,553) (70,404) (6,500) (84,445) Other - - - - - - 5 2,121 5.315 Net Change in Plan Fiduciary Net Position 1,040,583 10,655,658 261,036 273,310 345,484 (637,700) 25,738 (111,898) (585,563) (400,273) Plan Fiduciary Net Position - Beginning 15,687,798 5,032,140 4.771.104 4.497,794 4.152 310 4.790.010 4,764272 4.876.170 5461 733 5 862.006 Plan Fiduciary Net Position - Ending $ 16 28381% 15687 98 % 5032.140 % 4,771,104$ 4,497,794$ 4,152,310$ 4,790,010$ 4,764,272$ 4,876,170$ 5,461 733 City's Net Pension Liability (Asset) - Ending $ (1,358,323) $ (214,546) $ 11,095,711 $ 11,091,631 $ 10,894,432 $ 11,136,730 $ 10,266,996 $ 10,192,859 $ 9,299,301 $ 8,530,165 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 108.84% 101.39% 31.20% 30.10% 29.20% 27.16% 31.81% 31.85% 34.40% 39.03% Covered Payroll $ - $ 3,542,400 $ 3,264,288 $ 2,777,425 $ 2,808,113 $ 2,712,961 $ 2,717,229 $ 2,785,912 $ 2,511,047 $ 2,368,370 City's Net Pension Liability as a Percentage of Covered Payroll 0.00% -6.06% 339.91% 399.30% 388.00% 410.50% 377.85% 365.87% 370.34% 360.17% Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. CITY OF PARIS, TEXAS Schedule 4 Required Supplementary Information Paris Firefighters' Relief and Retirement Fund Schedule of City Contributions Year Ended September 30, 2024 Fiscal Year Ended September 30, 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Fiscal Year Contributio n $ - $ 12,521,952 $ 457,000 $ 388,839 $ 393,157 $ 336,951 $ 326,067 $ 320,851 $ 332,665 $ 301,329 Contribution in Relation to the Contractually Required Fiscal Year Contributio n - (12,521,952) (457,000) (388,839) (393,157) (336,951) (326,067) (320,851) (332,665) (301,329) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered Payroll $ - $ - $ 3,582,668 $ 2,777,425 $ 2,817,872 $ 2,713,093 $ 2,717,229 $ 2,795,465 $ 2,772,967 $ 2,511,047 79 Contributions as a Percentage of Covered Payroll 0.00% 0.00% 12.76% 14.00% 13.95% 12.42% 12.00% 11.48% 12.00% 12.00% Notes to Schedule Valuation Date Roll -forward of the December, 31, 2022 actuarial valuation which was based upon member census data as of the same date. Methods and Assumptions used to Determine Contribution Rates: Actuarial Cost Method Unit Credit Actuarial Cost Method Asset Valuation Method Market Value ofAssets Retirement Age Active members who are eligible for the DROP are assumed to retire immediately. Otherwise, actives are assumed to retire at age 55, or current age if older. Previously, active members were assumed to retire 2 years after they had either (a) both attained age 55 and completed at least 20 years of service or (b) satisfied the rule of 80. Active members who have already met the requirements for service retirement are assumed to retire one year after the valuation date. Benefits for Vested terminated members who had less than 10 years of service at the plan freeze and thus are due a refund of contributions, which are assumed to be paid 6 months following the valuation date, July 1, 2023. Otherwise, terminated vested participants are assumed to start on the same date as normal retirement benefits. Mortality Employee and healthy armuitant rates from the Pub -2010 Public Safety Below Median Mortality Table, generationally projected using the ultimate rates of the MP -2021 improvement scales. Other Information The plan is frozen to new entrants and benefit accruals are frozen as of October 1, 2022. Normal Retirement Date changed from age 55 with 20 years of service to age 55 and Early Retirement Eligibility, the Role of 80 was limited to those that already have 20 years of service as of the plan freeze date. Members are now eligible for in-service distributions once they reach retirement eligibility rather than having to terminate. Eligibility for the DROP was frozen to those eligible as of the plan freeze date. The pre -retirement death benefit was reduced to the Texas Local Firefighters Retirement Act minimum of $1,200 per year until reaching age 55 at which point reverting to the frozen benefit. Finally, active members ceased making contributions to the fund. Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. CITY OF PARIS, TEXAS Required Supplementary Information Texas Municipal Retirement System - Schedule of Changes in Total OPEB Liability and Related Ratios Year Ended September 30, 2024 Plan Year Ended December 31, 2023 2022 2021 2020 2019 Total OPEB Liability Service Cost $ Interest Changes in Benefit Terms Differences Between Expected and Actual Experience Changes in Assumptions Benefit Payments, Including Refunds of Employee Contributions (48,965) Net Change in Total OPEB Liability 95,417 Total OPEB Liability - Beginning 1,002,994 Total OPEB Liability - Ending Covered Payroll $ 18,135,117 43,524 City's Total OPEB Liability as a Percentage of Covered 40,511 Payroll 6.06% Notes to Schedule 8,303 52,044 Valuation Date Methods and Assumptions used to Determine Contribution Rates: Inflation $ 1,098,411 80 2018 Schedule 5 2017 Salary Increases Investment Rate of Return Mortality $ 1,002,994 $ 1,462,684 $ 1,385,480 $ 1,179,707 $ 989,465 $ 1,015,135 $ 14,279,353 $ 12,461,905 $ 11,867,235 $ 12,167,574 $ 11,766,222 $ 11,734,791 7.02% 11.74% 11.67% 9.70% 8.41% 8.65% Actuarially determined contribution rates are calculated as of December 31, and become effective in January 13 months later. Other Information $ 53,983 $ 107,089 $ 2.50% $ 71,397 $ 64,802 $ 42,722 $ 26,769 $ 3.§®o, 4!? 11.8 %includipgWation 27,229 28,046 32,883 37,003 3.11*1 33,850 - - - - Mortality rates - service retirees: 2019 Municipal Retirees of Texas Mortality Tables. Male rates are (44,459) (28,573) (34,781) (40,603) �T*0#by 103% and female rates are multiplied by 105%. The rates are projected on a fully generational (476,731) 44,084 175,630 178,024 "ts-,1334)he most recent*,*JvIP-2021 (with immediate convergence). Mortality rates - disabled retirees: (37,126) (31,155) (10,681) (10,951) 241Y13t#iicipal Retirees of Texas Mortality Tables with a 4 year set-fonvard for males and a 3 year (385,395) 91,261 68,964 120,032 setfonvard fofcfeg&s. In addition, a 3.5% and 3% minimum mortality rate will be applied to reflect the (459,690) 77,204 205,773 190,242 impairment for younger members who become disabled for males and females, respectively. The rates are (25.670) 128,436 (82,466) proiected on a fullv generational basis by the most recent Scale MP -2021 (with immediate convergence) to 1,462,684 1,385,480 1,179,707 989,465 There were no benefit changes during the year. 1,015,135 886,699 Other Changes (28) 28 Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. - - - CITY OF PARIS, TEXAS 1,783,154 90,961 (33,811) (37,399) 45,838 Total Required Supplementary Information 3,173,612 3,494,904 1,711,750 1,620,789 1,654,600 1,691,999 1,646,161 Total OPEB Liability City of Paris Retiree Health Care Plan - 3.173.612 $ 3.494.904 S 1.711.750 S 1.620.789 S Schedule of Changes in Total OPEB Liability and Related Ratios Year Ended September 30, 2024 Plan Year Ended December 31, 2023 2022 2021 2020 2019 2018 Total OPEB Liability Schedule 6 2017 Service Cost $ 53,983 $ 107,089 $ 46,370 $ 45,329 $ 34,501 $ 36,808 $ 36,410 Interest 126,693 64,353 34,083 44,410 60,652 55,250 61,432 Changes in Benefit Terms - - 1,923,344 - - - - Differences Between Expected and Actual Experience (729,798) (5,342) (250,340) (10,649) (174,952) (10,869) - Changes inAssumptions 243,223 (385,395) 91,261 68,964 120,032 (36,122) 51,925 Benefit Payments, Including Refunds of Employee Contributions (144,730) (102,025) (61,564) (57,093) (74,044) (82,466) (103,929) Other Changes (28) 28 - - - Net Change in Total OPEB Liability (450,657) (321,292) 1,783,154 90,961 (33,811) (37,399) 45,838 Total OPEB Liability - Beginning 3,173,612 3,494,904 1,711,750 1,620,789 1,654,600 1,691,999 1,646,161 Total OPEB Liability - Ending S 2.72 955 S 3.173.612 $ 3.494.904 S 1.711.750 S 1.620.789 S 1.654.600 $ 1,691,999 Covered Payroll City's Total OPEB Liability as a Percentage of Covered 81 Payroll 69.99% 84.02% 91.33% 48.60% 42.66% 34.37% 32.02 Notes to Schedule Valuation Date December 31, 2023 Methods and Assumptions used to Determine Contribution Rates: Actuarial Cost Method Individual Entry -Age Normal Discount Rate 3.77% as of December 31, 2023 Inflation 2.50 Salary Increases 3.60% to 11.85% for TMRS and 4.10% to 6.00% for Firefighters, including inflation Demographic Assumptions TMRS: Based on the 2023 experience study conducted for the Texas Municipal Retirement System (TMRS). Firefighters: Based on those disclosed in the Paris Firefighters' Relief and Retirement Fund pension valuation report as of December 31, 2023. Mortality TMRS: For healthy retirees, the gender -distinct 2019 Municipal Retirees of Texas mortality tables are used, with male rates multiplied by 103% and female rates multiplied by 105%. The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP -2021 tables to account for future mortality improvements. Firefighters: For healthy retirees, the Pub -2010 Public Safety Below Median Healthy Retiree mortality tables are used. The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP -2021 tables to account for future mortality improvements. Health Care Trend Rates Initial rate of 7.20% declining to an ultimate rate of 4.25% after 15 years, the City's subsidy is assumed to increase by 3.00% per year. Participation Rates 95% of eligible TMRS employees and Firefighters Other Information The discount rate changed from 4.05% as of December 31, 2022 to 3.77% as of December 31, 2023. Additionally, the demographic and salary increase assumptions were updated to reflect the 2023 TMRS experience study, the health care trend rates were updated to reflect the plan's anticipated experience, and the assumptions for Firefighters were updated to match those used in the Paris Firefighter Relief and Retirement Fund pension valuation report as of December 31, 2023. Note: The pension schedules in the required supplementary information are intended to show information for ten years. Additional years' information will be displayed as it becomes available. 82 COMBINING AND INDIVIDUAL NONMAJOR FUND STATEMENTS AND SCHEDULES CITY OF PARIS, TEXAS Nonmajor Governmental Funds September 30, 2024 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. Cox Field Airport Fund — This fund accounts for activities of Cox Field Airport. 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. ASSETS Cash and Cash Equivalents Investments Receivables Accounts (Net of allowance for uncollectibles) Leases Inventories Prepaid Items Due from Other Funds Total Assets LIABILITIES Accounts Payable Total Liabilities 83 CITY OF PARIS, TEXAS Schedule 7 Combining Balance Sheet - Nonmajor Governmental Funds September 30, 2024 Special Revenue Permanent Community Total Development Special Library Library Nonmajor Block Revenue Cox Field Memorial Trust Governmental Grant Fund Airport Funds Total Funds Funds $ 252,128 $ 1,338,532 $ 817,162 $ 90,253 $ 2,498,075 $ 108,145 $ 2,606,220 55,502 $ 40 $ 55,542 $ $ 55,542 55,502 40 5 5,542 5 5,542 698.161 698.161 698.161 698.161 698.161 698.161 $ 252,128 $ 1,323,065 $ 65,801 $ 90,253 $ 1,731,247 $ 674 $ 1,731,921 - - - - - 105,051 105,051 20,084 20,084 2,420 22,504 727,515 727,515 - 727,515 - 1,972 1,972 1,972 965 1,790 2,755 2,755 14,502 - 14,502 14,502 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Leases Total Deferred Inflows of Resources Total Fund Balances 252,128 1,338,532 63,499 90,213 1,744,372 108,145 1,852,517 $ 252,128 $ 1,338,532 $ 817,162 $ 90,253 $ 2,498,075 $ 108,145 $ 2,606,220 FUND BALANCES Nonspendable Inventories - 1,972 1,972 1,972 Prepaid Items 965 1,790 2,755 - 2,755 Permanent Library Funds - - - 108,145 Restricted for 108,145 Law Enforcement 1,134,300 - 1,134,300 - 1,134,300 Community Development 203,267 59,737 - 263,004 Assigned 263,004 Library - - - 90,213 90,213 90,213 Community Development 252,128 - 252,128 252,128 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 84 REVENUES Hotel Occupancy Taxes Fees and Fines Leases Charges for Services Use of Money and Property Intergovernmental Miscellaneous Contributions Total Revenues EXPENDITURES Current General Government Public Safety Public Works Health Culture and Recreation Cox Field Capital Outlay Public Works Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Total Other Financing - 55,176 - 23,329 13,918 77,979 - 1,977 - 95,622 - 573,468 13,918 827,551 - - 55,176 - 55,176 - - 23,329 - 23,329 93,203 - 93,203 - 93,203 741,994 - 741,994 - 741,994 10,924 5,051 107,872 7,615 115,487 94,327 - 96,304 - 96,304 280 5,093 100,995 - 100,995 - - 573,468 - 573,468 940,728 10,144 1,792,341 7,615 1,799,956 - 47,928 - - 47,928 - 47,928 - 514 - - 514 - 514 - 499,749 - - 499,749 - 499,749 - 1,811 - - 1,811 - 1,811 - - - 1,142 1,142 - 1,142 - - 1,038,916 - 1,038,916 - 1,038,916 - 573,468 - - 573,468 - 573,468 - 1,123,470 1,038,916 1,142 2,163,528 - 2,163,528 13,918 (295,919) (98,188) 9,002 (371,187) 7,615 (363,572) CITY Ur YAFJS, TEXAS Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year Ended September 30, 2024 Special Revenue Community Development Library Block Special Cox Field Memorial Grant Revenue Airport Funds Total 62,505 35,721 - 63,460 - (955) 90,638 (54,917) 98,226 - 154,098 - (55,872) Schedule 8 Permanent Total Library Nonmajor Trust Governmental 98,226 - 154,098 (55,872) Sources (Uses) Net Changes in Fund Balances 13,918 (233,414) (62,467) 9,002 (272,961) 7,615 (265,346) Fund Balances - Beginning 238,210 1,571,946 125,966 81,211 2,017,333 100,530 2,117,863 Fund Balances - Ending $ 252,128 $ 1,338,532 $ 63,499 $ 90,213 $ 1,744,372 $ 108,145 $ 1,852,517 85 CITY OF PARIS, TEXAS Schedule 9 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Special Revenue Funds Year Ended September 30, 2024 Budgeted Amounts Variance with REVENUES Hotel Occupancy Taxes $ 45,000 $ 45,000 $ 55,176 $ 10,176 Fees and Fines 19,510 19,510 23,329 3,819 Leases - - 93,203 93,203 Charges for Services 855,000 855,000 741,994 (113,006) Interest Earned 26,400 26,400 107,872 81,472 Intergovernmental 53,000 53,000 96,304 43,304 Miscellaneous 126,366 126,366 100,995 (25,371) Contributions - - 573,468 573,468 Total Revenues 1,125,276 1,125,276 1,792,341 667,065 EXPENDITURES Municipal Court 34,150 34,150 47,928 (13,778) Police 32,500 32,500 514 31,986 Public Works - - 1,073,217 (1,073,217) Culture and Recreation 1,500 1,500 1,142 358 Health 1,000 1,000 1,811 (811) Cox Field 1,007,041 1,007,041 1,038,916 (31,875) Total Expenditures 1,076,191 1,076,191 2,163,528 (1,087,337) Excess (Deficiency) of Revenues Over (Under) Expenditures 49,085 49,085 (371,187) (420,272) Original Final Actual Final Budget Other Financing Sources (Uses) Transfers In - Transfers Out - Total Other Financing Sources (Uses) Net Changes in Fund Balance 49,085 Fund Balance - Beginning 2,017,333 98,226 98,226 154,098 154,098 - (55,872) (55,872) 49,085 (272,961) (322,046) 2,017,333 2,017,333 - Fund Balance - Ending $ 2,066,418 $ 2,066,418 $ 1,744372 $ (322,046) 86 CITY OF PARIS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Debt Service Fund Year Ended September 30, 2024 Schedule 10 Budgeted Amounts Variance with REVENUES Property Taxes $ 1,146,828 $ 1,146,828 $ 2,828,770 $ 1,681,942 Hotel Occupancy Taxes 200,000 200,000 3 15,292 115,292 Interest Earned 11,300 11,300 321,775 310,475 Total Revenues 1,358,128 1,358,128 3,465,837 2,107,709 EXPENDITURES Principal 1,048,728 1,048,728 1,054,178 (5,450) Interest 258,474 258,474 893,742 (635,268) Bond Issuance Costs - - 203,212 (203,212) Total Expenditures 1,307,202 1,307,202 2,151,132 (843,930) Excess of Revenues Over Expenditures 50,926 50,926 1 ,314,705 1,263,779 Original Final Actual Final Budget - - (227.535) (227.535) Other Financing Sources (Uses) Refunding Bonds Issued - - 21,849,699 21,849,699 Transfers Out - - (22,077,234) (22,077,234) Total Other Financing Sources (Uses) Net Changes in Fund Balance 50,926 50,926 1,087,170 1,036,244 Fund Balance - Beginning 2,002,722 2,002,722 2,002,722 - Fund Balance - Ending S 2.053.648 S 2.053.648 S 3 _089.892 S 1.036244 87 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, 2024 REVENUES Interest Earned Other Total Revenues EXPENDITURES General Government Police Fire Community Development Engineering Parks and Recreation Solid Waste Public Works Health Library Cox Field Airport Total Expenditures Deficiency of Revenues Over Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Certificates of Obligation Issued SPECIAL ITEM Proceeds from Sale of Assets Prior Current Years Year Total to Date Schedule 11 Proj ect Authorization (Budget) $ 730,192 $ 166,621 $ 896,813 $ - 502.576 - 502-576 - 1,232,768 166,621 1,399,389 - 2,240,629 34,969 2,275,598 334,109 285,630 - 285,630 285,630 915,942 - 9 15,942 725,207 - 725,207 915,942 35,555 - 3 5,555 1,393,624 563,384 - 563,384 35,555 568,811 - 568,811 923,781 13,340,696 111,174 13,451,870 1,181,019 144,232 144,232 48,545,015 7,100 - 7,100 1 228,000 110.667 146.143 10.667 35.000 18.937.853 19.083.996 159.100 54,036,775 20,478 (17,705,085) (17,684,607) (54,036,775) 10,014,042 - 10,014,042 (2,549,549) - (2,549,549) 12,918,399 12,918,399 - 90,100 90,100 Net Changes in Fund Balance Fund Balance - Beginning Fund Balance - Ending S 2.767.907 20A78 % 2 _788.385 S X54.036.7751 2.938.214 S 2958.692 88 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS CITY OF PARIS, TEXAS Schedule 12 Capital Assets Used in the Operation of Governmental Funds Comparative Schedules by Source September 30, 2024 and 2023 2024 2023 Governmental Funds Capital Assets Land $ 6,142,418 $ 6,142,418 Buildings 22,936,307 22,523,529 Improvements Other Than Buildings 9,011,258 6,695,332 Machinery and Equipment 25,326,603 24,646,150 Infrastructure 52,818,522 52,818,522 Construction in Progress 393,403 311,377 Total Governmental Funds Capital Assets Investments in Governmental Funds Capital Assets by Source General Fund Capital Projects Funds Donations S 116.628.511 S 113.137.328 $ 73,660,534 33,635,121 9,332,856 $ 71,833,545 33,512,449 7,791,334 Total Investments in Governmental Funds Capital Assets by Source S l l6-628.51 l S l l 3- l 37328 89 STATISTICAL SECTION CITY OF PARIS, TEXAS Statistical Section September 30, 2024 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 Tables 1-4 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 Tables 5-8 These schedules contain information to help the reader assess the government's most significant local revenue source, the ad valorem tax. Debt Capacity Tables 9-13 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 Tables 14-15 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 Tables 16-19 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. 90 CITY OF PARIS, TEXAS Table 1 Net Assets/Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited Total Governmental Activities, Net Position $ 37,131,714 $ 35,400,053 $ 36,135,030 $ 33,315,517 Business -Type Activities: Net Investment in Capital Assets $ 33,331,038 $ 33,466,855 $ 24,198,822 $ 18,322,809 Restricted - - - - Unrestricted 13,508,734 14,460,833 22,900,345 22,945,722 Total Business -Type Activities, Net Position $ 46,839,772 $ 47,927,688 $ 47,099,167 $ 41,268,531 Primary Government: Net Investment in Capital Assets $ 61,374,948 $ 63,972,639 $ 46,170,160 $ 39,036,237 Restricted 3,393,033 3,003,799 3,004,564 12,548,372 Unrestricted 19,203,505 16,351,303 34,059,473 22,999,439 Total Primary Government, 91 Fiscal Year 2015 2016 2017 2018 Governmental Activities: Net Investment in Capital Assets $ 28,043,910 $ 30,505,784 $ 21,971,338 $ 20,713,428 Restricted 3,393,033 3,003,799 3,004,564 12,548,372 Unrestricted 5,694,771 1,890,470 11,159,128 53,717 Total Governmental Activities, Net Position $ 37,131,714 $ 35,400,053 $ 36,135,030 $ 33,315,517 Business -Type Activities: Net Investment in Capital Assets $ 33,331,038 $ 33,466,855 $ 24,198,822 $ 18,322,809 Restricted - - - - Unrestricted 13,508,734 14,460,833 22,900,345 22,945,722 Total Business -Type Activities, Net Position $ 46,839,772 $ 47,927,688 $ 47,099,167 $ 41,268,531 Primary Government: Net Investment in Capital Assets $ 61,374,948 $ 63,972,639 $ 46,170,160 $ 39,036,237 Restricted 3,393,033 3,003,799 3,004,564 12,548,372 Unrestricted 19,203,505 16,351,303 34,059,473 22,999,439 Total Primary Government, 91 NetAssets/Position $ 83,971,486 $ 83,327,741 $ 83,234,197 $ 74,584,048 Table 1 (Continued) Fiscal Year 2019 2020 2021 2022 2023 2024 $ 18,064,569 $ 21,907,532 $ 26,703,929 $ 28,267,799 $ 31,070,770 $ 11,085,414 8,782,171 8,272,920 7,357,621 6,528,631 7,540,275 8,304,997 4,831,122 6,866,108 6,606,102 22,093,914 22,295,017 25,891,983 $ 31,677,862 $ 37,046,560 $ 40,667,652 $ 56,890,344 $ 60,906,062 $ 45,282,394 $ 25,779,748 $ 28,880,579 $ 31,236,956 $ 20,720,075 $ 26,718,407 $ 10,791,448 - - - - 16,473,443 14,923,230 13,975,247 15,457,391 15,782,990 61,962,470 $ 42,253,191 $ 43,803,809 $ 45,212,203 $ 36,177,466 $ 42,501,397 $ 72,753,918 $ 43,844,317 $ 50,788,111 $ 57,940,885 $ 48,987,874 $ 57,789,177 $ 21,876,862 8,782,171 8,272,920 7,357,621 6,528,631 7,540,275 8,304,997 21,304,565 21,789,338 20,581,349 37,551,305 38,078,007 87,854,453 $ 73,931,053 $ 80,850,369 $ 85,879,855 $ 93,067,810 $ 103,407,459 $ 118,036,312 CITY OF PARIS, TEXAS Table 2 Changes in Net Assets/Position Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited EXPENSES Governmental Activities: General Government Fiscal Year 2015 2016 2017 2018 $ 2,909,807 $ 3,463,908 $ 3,748,965 $ 3,421,223 92 Finance Public Safety Public Works Health Library Services Cox Field Airport Interest on Long -Term Debt Bond Issue Costs Total Governmental Activities Expenses Business -Type Activities: Water and Sewer Services Total Primary Government Expenses PROGRAM REVENUES Governmental Activities: Charges for Services: General Government Public Safety Public Works Health Library Services Cox Field Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities 404,567 400,665 398,262 404,443 11,037,966 12,595,127 12,456,655 12,061,033 7,508,978 7,020,333 7,126,349 6,882,186 2,404,782 2,633,051 2,836,429 2,884,339 790,339 799,187 781,092 866,435 152,063 217,995 235,546 243,666 276,197 237,313 185,852 399,291 25,484,699 27,367,579 11,929,499 12,100,940 27,769,150 27,162,616 14,095,860 37,414,198 39,468,519 41,865,010 14,594,309 41,756,925 17,634 6,572 181,197 214,000 370,308 361,100 342,083 376,322 1,862,606 1,780,836 1,463,576 1,470,248 2,391,817 2,519,387 2,609,811 2,732,908 19,433 16,874 127,997 120,942 76,689 91,810 98,382 134,716 1,396,711 672,298 338,718 154,497 271,961 424,332 2,147,065 522,574 93 Program Revenues Business -Type Activities: Charges for Services: Water and Sewer Service Operating Grants and Contributions Capital Grants and Contributions Total Business -Type Activities Total Primary Government Program Revenues 6,407,159 5,873,209 7,308,829 5,726,207 14,281,964 14,617,218 13,781,748 14,168,934 14,168,934 20,689,123 20,490,427 21,090,577 19, 895,141 Fiscal Year (Continued) 2019 2020 2021 2022 2023 2024 $ 3,651,888 $ 3,927,783 $ 5,000,473 $ 7,371,230 $ 4,224,231 $ 5,425,724 402,943 481,645 480,880 519,980 1,051,634 796,901 13,228,151 12,727,703 11,874,360 12,265,360 13,157,874 13,761,148 8,274,343 6,699,707 6,452,355 8,186,910 9,148,859 9,819,300 3,205,596 4,267,819 3,962,596 3,781,493 9,029,457 6,606,156 914,874 846,669 762,080 774,910 932,113 988,985 344,964 311,796 374,649 1,099,517 1,109,416 1,061,018 194,004 115,000 99,169 52,281 39,542 262,654 30,216,763 29,378,122 29,006,562 34,051,681 38,693,126 38,721,886 14,568,695 14,026,074 15,241,543 15,747,874 19,043,534 20,624,122 44,785,458 43,404,196 44,248,105 49,799,555 57,736,660 59,346,008 94 304,818 277,689 237,376 567,805 513,883 627,895 353,571 562,859 530,151 346,023 317,331 321,835 1,437,157 1,473,803 1,493,826 1,488,587 1,479,235 1,637,218 2,979,160 4,790,535 4,818,960 5,946,071 8,745,253 6,648,010 100,014 60,928 80,657 65,827 75,814 78,512 161,527 161,619 170,579 774,986 840,779 742,095 165,064 2,151,740 369,289 522,574 1,536,446 1,467,445 1,160,602 324,889 239,450 1,096,373 1,090,865 1,237,428 6,661,913 9,804,062 7,940,288 10,808,246 14,599,606 (57,940) 12,760,438 14,452,703 15,043,788 16,567,528 18,397,839 19,633,034 20,935,627 - - - 1,371,533 998,533 468,281 - - - - 62,500 188,074 21,114,616 24,847,850 24,507,816 30,577,618 35,293,673 34,352,420 CITY OF PARIS, TEXAS Table 2 Changes in Net Assets/Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) Unaudited Fiscal Year 2015 2016 2017 2018 Net (Expense)/Revenue Governmental Activities (19,077,540) (21,494,370) ( 20,460,321) (21,436,409) Business-T-ype Activities 2,352,465 2,516,278 ( 314,112) (425,375) Total Primary Government, Net Expense ( 16,725,075) (18,978,092) ( 20,774,433) (21,861,784) General Revenues and Other Changes in NetAssets/Position Governmental Activities: Taxes Property 7,651,005 7,748,872 8,175,530 9,170,951 Sales 7,684,113 7,051,858 7,233,526 7,317,162 Franchise 2,641,537 2,502,614 4,211,397 4,315,694 Hotel Occupancy 594,493 630,545 657,270 662,263 Investment Earnings 51,741 80,129 173,656 426,518 Grants, Donations, and Miscellaneous 369,689 315,989 361,125 387,306 Capital Contributions 1,087,474 651,847 - - Gain/Loss on Sale of Capital Assets - (57,026) - (57,940) 95 Transfers Total Governmental Activities Business -Type Activities: Taxes Investment Earnings 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 1,579,100 382,794 610,955 20,080,052 20,503,928 ,195,298 22,832,902- 77,787 291,131 315,872 380,393 ( 1,087,474) (1,579,100) ( 382,794) (610,955) ( 1.009.687) (1287.969) ( 66.922) (230.562) 1,002,512 (990,442) 734,977 1,396,500 1,342,778 1,228,309 ( 381,034) (655,937) Total Primary Government S ?_345290 S 237.867 S 353943 S 740-563 Table 2 (Continued) Fiscal Year 2019 2020 2021 2022 2023 2024 (23.554.850) (19.574.060) (21.066274) (23 243.435) (24,093.520) (25961 448) (115,992) 1.017.714 1,325.985 4.021,498 1.650.533 967.860 (23,670,842) (18,556,346) (19,740,289) (19,221,937) (22,442,987) (24,993,588) 9,358,943 9,338,087 9,561,394 9,863,420 9,207,529 11,121,845 675,158 872,418 1,192,873 1,151,124 1,284,639 1,451,801 272,338 714,470 546,391 1,548,315 1,012,657 3,061,069 49,951 25,246 125,176 111,727 170,071 - (523,031) (146,679) (177,451) 11,746,203 (157,419) (23,005,896) 22,089,404 23,960,705 24,739,426 39,178,257 28,109,238 10,123,462 - - - - 1,228,894 1,145,302 577,621 427,723 (51,563) (1,376,170) 3,248,285 5,133,463 - - 19,321 66,138 38,800 - 523,031 146,679 177,451 (11,746,203) 157,419 23,005,896 96 1,100,652 574,402 145,209 (13,056,235) 4,673,398 29,284,661 23,190,056 24,535,107 24,884,635 26,122,022 32,782,636 39,408,123 (1,465,446) 4,386,645 3,673,152 15,934,822 4,015,718 (15,837,986) 984,660 1,592,116 1,471,194 (9,034,737) 6,323,931 30,252,521 A (480.786) $ 5.978.761 A 5.144.346 A 6.900.085 A 10.339.649 A 14.414.535 CITY OF PARIS, TEXAS Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Unaudited General Fund Nonspendable Restricted Unassigned Total General Fund All Other Governmental Funds Nonspendable Restricted Assigned Unassigned Fiscal Year Table 3 2015 2016 2017 2018 $ 294,776 $ 223,911 $ 326,985 $ 418,995 331,086 387,950 446,493 498,359 12,969,124 10,227,839 10, 849,390 S 13.594986 S 10.839.700 S 11.622.868 S 12.670.746 $ 90,800 $ 91,565 $ 92,347 $ 93,689 2,726,900 2,525,049 12,009,532 10,991,000 267,440 188,569 82,042 299,013 Total All Other Governmental Funds S 3-085.140 S 2.805.183 S 12241.626 S 11.383.702 97 Fiscal Year Table 3 (Continued) 2019 2020 2021 2022 2023 2024 $ 483,575 $ 500,495 $ 577,814 659,322 12,390,089 15,990,260 181,620 $ 394,147 710,901 750,650 20,596,761 23,926,645 $ 273,147 $ 3,901,324 802,872 846,070 26,253,936 25,624,971 $ 13.451.478 $ 17.150.077 $ 21.489.282 $ 25.071.442 $ 27.329955 $ 30.372.365 $ 96,007 $ 98,400 $ 8,108,350 7,512,067 292,571 295,955 98,543 $ ( 46,841) $ 6,633,684 5,679,098 - 302,615 145,724 102,505 $ 207,978 6,636,873 7,350,782 319,421 342,341 S 8.496928 S 7906.422 S 6.732227 S 6.080596 S 7.058.799 S 7901.101 98 CITY OF PARIS, TEXAS Table 4 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Unaudited 99 Fiscal Year 2015 2016 2017 REVENUES Taxes $ 18,457,686 $ 17,976,072 $ 20,280,057 Licenses and Permits 220,696 152,016 155,363 Fines and Fees 573,953 515,147 491,880 Leases - - - Charges for Services - - - Use of Money and Property 137,030 173,004 272,039 Sanitation 1,462,810 1,474,874 1,463,576 Health 2,383,355 2,519,387 2,609,811 Intergovernmental 1,662,824 1,096,630 1,463,514 Other 224,463 386,853 258,051 Total Revenues 25,122,817 24,293,983 26,994,291 EXPENDITURES Current: General Government 1,076,798 1,301,401 1,288,458 Finance 404,567 400,665 398,262 Public Safety 10,206,584 11,125,560 11,026,655 Public Works 5,861,079 5,556,359 5,549,270 Health Department 8,672 - - Emergency Medical Service 2,240,853 2,366,673 2,535,135 Library 692,290 717,395 697,503 Cox Field Airport 102,539 110,330 129,269 Other 1,641,714 1,771,889 1,738,115 Debt Service: Principal 1,077,610 991,899 1,161,513 Interest 280,733 254,304 196,358 Bond Issuance Costs - - 103,399 Capital Outlay 1,920,359 4,474,952 2,350,010 Total Expenditures 25,513,798 29,071,427 27,173,947 Excess (Deficiency) of Revenues Over Expenditures (390,981) (4,777,444) Other Financing Sources (Uses):17( 9,656) Proceeds of Capital Leases 617,114 975,185 - General Obligation Bonds Issued - - 9,913,399 Certificates of Obligation Issued - - - Tax Notes Issued - - - Issue Costs - - - Insurance Recoveries - - - Inception of Lease - - - Inception of Subscription -Based IT Arrangement - - - Transfers In 1,504,281 3,437,300 466,536 Transfers Out (416,807) (1,858,200) (83,742) Proceeds From Sale of General Capital Assets 95,098 - - 99 Total Other Financing Sources (Uses) Increase (Decrease) in Reserve for Inventory Net Changes in Fund Balances 1,799,686 61,649 $ 1,470,354 2,554,285 10,296,193 (70,865) 103,074 $ (2,294,024) $ 10,219,611 Debt Service as a Percentage of Noncapital Expenditures 5.76% 5.07% 5.47% Table 4 (Continued) Fiscal Year 2018 2019 2020 2021 2022 2023 2024 $ 21,447,857 $ 21,672,347 $ 23,106,141 $ 24,155,434 $ 25,561,800 $ 25,793,589 $ 28,045,570 197,920 277,507 259,117 211,668 532,557 484,807 610,658 495,708 480,618 743,152 663,873 472,743 455,229 446,489 - - - - 167,337 180,619 188,277 - - - - 774,986 848,777 741,994 561,234 742,644 375,074 212,284 282,927 1,369,937 1,968,083 1,470,248 1,437,157 1,462,452 1,470,237 1,462,220 1,461,058 1,405,361 2,614,504 2,991,995 5,117,649 4,806,996 5,933,986 8,733,472 6,637,108 677,072 1,325,665 2,503,393 706,574 1,704,040 2,392,541 2,131,405 346,789 214,502 692,664 524,586 1,207,739 1,065,955 2,118,692 27,811,332 29,142,435 34,259,642 32,751,652 38,100,335 42,785,984 44,293,637 1,180,280 1,230,366 1,371,042 1,178,384 1,436,945 1,402,106 1,821,831 404,443 402,943 481,645 480,880 519,980 1,051,634 796,901 10,850,538 11,253,953 12,032,115 11,374,139 23,924,796 12,482,397 12,861,455 5,356,374 5,644,019 5,065,867 4,991,668 6,050,354 6,817,178 8,380,291 2,670,131 2,845,874 4,058,990 5,200,828 5,595,417 8,717,240 6,368,778 736,513 756,566 723,742 679,491 716,644 813,148 892,739 112,562 210,851 179,631 242,809 972,755 975,641 1,038,916 1,716,365 1,845,609 1,922,363 1,838,073 1,829,866 1,936,078 2,364,997 1,580,682 1,577,803 1,635,788 3,315,266 1,663,315 1,196,529 1,599,080 447,294 443,205 398,844 389,169 331,657 304,184 929,957 4,410 - - - - - 203,212 3,564,942 4,399,885 5,540,837 2,615,698 4,596,338 4,137,225 3,259,726 28,624,534 30,611,074 33,410,864 32,306,405 47,638,067 39,833,360 40,517,883 (813,202) ( 1,468,639) 848,778 445,247 (9,537,732) 2,952,624 3,775,754 190,000 - - 1,765,000 - - 21,849,699 - - 1,500,000 - - - - - 1,115,000 - (62,000) ( 81,992) 57,835 - - - - - - - - 278,821 13,421 271,089 100 - - - - - 218,091 779,748 994,335 27,678 2,570,626 3,358,332 12,424,649 1,699,025 661,115 (383,374) ( 550,708) (2,717,305) ( 3,535,783) (678,446) (1,856,445) Tax Levy Fiscal Year Fiscal Year Collections 2014 2014-15 $ 7,626,530 $ 7,348,250 96.35% $ 1 11,210 $ 7,459,460 2015 2015-16 7,627,731 7,406,830 97.10 2 15,544 7,622,374 (23,667,011) - - 28,000 151,266 155,367 210,000 - 9,332,621 9,047,982 96.95 109,970 9,157,952 2020 2020-21 9,592,756 9,321,264 97.17 134,553 9,455,817 800,961 ( 465,195) 1,319,321 2,771,823 12,180,391 284,092 2023 2023-24 12,178,255 11,891,745 97.65 144,617 12,036,362 (105,360) 40,517 - - - - - - $ 28,276 $ ( 1,933,834) $ 2,168,099 $ 3,217,070 $ 2,642,659 $ 3,236,716 $ 3,670,394 8.09% 7.71% 7.30% 12.48% 4.45% 3.97% 6.74% 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. 101 Percent Collection of Current of Current Levy Year's Collected Delinquent Fiscal Total Total Taxes During During Tax Collections Roll Year Tax Levy Fiscal Year Fiscal Year Collections 2014 2014-15 $ 7,626,530 $ 7,348,250 96.35% $ 1 11,210 $ 7,459,460 2015 2015-16 7,627,731 7,406,830 97.10 2 15,544 7,622,374 2016 2016-17 8,093,094 7,940,087 98.11 1 16,317 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 1 37,647 9,345,895 2019 2019-20 9,332,621 9,047,982 96.95 109,970 9,157,952 2020 2020-21 9,592,756 9,321,264 97.17 134,553 9,455,817 2021 2021-22 9,888,259 9,673,449 97.83 141,826 9,815,275 2022 2022-23 1 0,441,096 10,204,442 97.73 1 55,315 10,359,757 2023 2023-24 12,178,255 11,891,745 97.65 144,617 12,036,362 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. 101 Ratio Ratio of of Total Delinquent Collections Outstanding Taxes To Total Delinquent To Total Tax Levy Taxes Tax Levy 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 99.26 215,835 2.18 99.22 236,654 2.26 98.83 286,509 2.35 102 Table 5 (Continued) City of Paris M&O I&S Total Lamar County M&O I&S Total Paris ISD M&O I&S Total Chisum ISD M&O I&S Total North Lamar ISD M&O I&S Total Paris Junior College M&O I&S Total CITY OF PARIS, TEXAS Table 6 Property Tax Rates -All Direct and Overlapping Governments (Per $100 of Assessed Value) Last Ten Fiscal Years Unaudited 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 $ 0.40635 $ 0.42547 $ 0.42443 $ 0.44248 $ 0.43831 $ 0.40868 $ 0.39788 $ 0.37357 $ 0.34377 $ 0.32176 0.09560 0.07648 0.07752 0.10947 0.11364 0.10740 0.08290 0.08016 0.09901 0.15606 S 0.50195 S 0.50195 S 0.50195 S 0.55195 S 0.55195 S 0.51608 S 0.48078 S 0.45373 _L_0.44= _L_0.47= $ 0.42640 $ 0.40920 $ 0.40660 $ 0.37550 $ 0.36740 $ 0.37630 $ 0.38180 $ 0.34250 $ 0.32780 $ 0.29000 0.01900 0.01830 0.01730 0.01880 0.01910 0.01770 0.00210 0.01830 0.01700 0.01450 S 0.44540 S 0.42750 S 0.42390 S 039430 S 038650 S 039400 S 038390 S 036080 S 034480 S 030450 $ 1.17000 $ 1.17000 $ 1.17000 $ 1.17000 $ 1.17000 $ 1.06840 $ 1.05190 $ 0.99200 $ 0.94290 $ 0.75750 0.28500 0.28500 0.28500 0.28500 0.28500 0.28500 0.25970 0.25970 0.24900 0.20620 S 1.45500 S 1.45500 S 1.45500 S 1.45500 S 1.45500 S 135340 _i_111160_ S 125170 S 1.19190 S 096370 $ 1.04000 $ 1.04000 $ 1.04000 $ 1.04000 $ 1.04000 $ 0.96640 $ 0.96640 $ 0.96340 $ 0.93280 $ 0.73800 0.14678 0.14678 0.20650 0.19500 0.19000 0.18000 0.18000 0.18000 0.18000 0.42000 S 1.18678 S 1.18678 S 124650 S 123500 S 123000 S 1.14640 S 1.14640 S 1.14340 S 1.11280 S 1.15800 $ 1.04000 $ 1.04000 $ 1.04000 $ 1.04000 $ 1.04000 $ 0.96640 $ 0.96640 $ 0.89600 $ 0.85460 $ 0.70660 0.06750 0.06750 - - - - - 0.25000 0.25000 0.25000 _i_1_1025.0 _i_1_1025.0 S 1.04000 S 1.04000 S 1.04000 S 096640 S 096640 S 1.14600 S 1.10460 _L_025660 $ 0.18660 $ 0.18750 $ 0.17730 $ 0.08500 $ 0.08500 $ 0.08400 $ 0.08900 $ 0.08150 $ 0.07490 $ 0.07100 _L_0.186(20 S 0.18750 S 0.17730 S 0.08500 S 0.08500 S 0.08400 S 0.08900 S 0.08150 S 0.07490 S 0.07100 Source: Lamar County Appraisal District 103 CITY OF PARIS, TEXAS Table 7 Assessed and Estimated Actual Value of Property Last Ten Fiscal Years Unaudited Sources: Lamar County Appraisal District Total 105 Assessed Table 7 (Continued) Real Property Personal Property Estimated Estimated Assessed Actual Assessed Actual Roll Year Value Value Value Value 2014 2014-15 $ 1,007,593,690 $ 1,472,220,698 $ 522,773,397 $ 763,567,027 2015 2015-16 1,006,810,741 1,490,882,796 526,923,827 780,316,817 2016 2016-17 1,148,246,077 1,725,298,577 479,151,390 720,199,051 2017 2017-18 1,206,992,530 1,773,796,952 474,754,769 697,701,527 2018 2018-19 1,236,252,824 1,807,476,750 495,983,817 725,129,690 2019 2019-20 1,295,418,472 1,870,747,790 498,742,817 720,268,510 2020 2020-21 1,391,511,659 1,933,860,434 532,519,786 740,100,180 2021 2021-22 1,667,126,345 2,305,669,290 560,875,228 775,657,080 2022 2022-23 1,784,537,195 2,476,266,752 638,929,410 886,666,860 2023 2023-24 2,214,972,789 2,944,250,811 669,478,496 894,128,560 Sources: Lamar County Appraisal District Total 105 Assessed Table 7 (Continued) 106 Estimated Value as a Assessed Actual Percentage of Total Direct Exemptions Value Value Actual Value Tax Rate $ 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 853,324,797 2 ,228,001,573 3,081,326,370 72.31 0 .45373 939,467,007 2 ,423,466,605 3,362,933,612 72.06 0.44278 953,928,086 2,884,451,285 3,838,379,371 75.15 0.47782 106 CITY OF PARIS, TEXAS Principal Property Taxpayers September 30, 2024 and 2015 Unaudited 2024 Table 8 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 Campbell Soup Company - A Food Manufacturer Kimberly-Clark Corporation - A Disposable Diapers American Spiral Weld III Inc. Pipe Manufacturer Essent PRMC, LP A Hospital Oncor Electric Delivery Electric Utility Potter Industries Glass Manufacturer Atmos Energy Gas Utility Huhtamaki Inc Packaging Mfg. Paris Generation, LP Electric Utility Campbell Soup Company - B Food Manufacturer Campbell Soup Company - C Food Manufacturer Alpha Lake Limited Shopping Center Walmart Discount Store Totals Source: Lamar County Appraisal District 107 $ 360,663,800 1 12.87% 168,734,582 2 6.02% 152,988,823 3 5.46% 62,649,957 4 2.24% 48,488,870 5 1.73% 35,357,285 6 1.26% 22,209,231 7 0.79% 20,251,990 8 0.72% 19,392,104 9 0.69% 18,278,800 10 0.65% - 0.00% 0.00% 0.00% 0.00% $ 909.015.442 32.43% 2015 Percentage Taxable of Total Assessed Taxable Value Rank Assessed Value $ 211,869,640 1 13.81% 47,182,406 3 3.08% 95,117,050 2 6.20% - 0.00% 30,363,705 4 1.98% 23,602,270 6 1.54% - 0.00% 9,112,979 0.59% 11,623,623 0.76% 20,551,100 7 1.34% 29,403,860 5 0.00% 10,857,300 8 0.00% 10,596,530 9 0.00% 10,189,050 10 0.00% S 510.469.513 2930% 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 Fiscal Estimated Year Population Taxable Gross Less Debt Assessed General Service Value Bonded Debt Funds 108 Net General Bonded Debt Table 8 (Continued) Ratio of Net General Bonded Debt To Assessed Value Table 9 Net General Bonded Debt Per Capita 2014-15 25,200 $ 1 ,519,380,526 $ 7,285,000 $ 1,117,793 $ 6,167,207 0.41 $ 244.73 2015-16 25,400 1 ,627,397,467 6,442,624 1,087,664 5,354,960 0.33 210.83 2016-17 25,425 1 ,681,747,299 15,461,503 898,022 14,563,481 0.87 572.80 2017-18 25,450 1 ,732,236,641 14,306,032 1,073,917 13,232,115 0.76 519.93 2018-19 25,450 1 ,794,161,289 12,977,671 1,103,061 11,874,610 0.67 466.59 2019-20 25,450 1 ,876,141,460 11,818,173 1,196,122 10,622,051 0.56 417.37 2020-21 24,476 2 ,228,001,573 11,420,000 1,272,171 10,147,829 0.46 414.60 2021-22 24,476 2 ,423,466,605 9,380,000 544,537 8,835,463 0.36 360.98 2022-23 24,930 2 ,588,988,526 10,440,000 1,898,641 8,541,359 0.33 342.61 2023-24 24,930 2 ,801,652,344 28,930,000 3,491,161 25,438,839 0.91 1,020.41 Sources: Lamar County Appraisal District City of Paris General Fiscal Obligation Year Bonds CITY OF PARIS, TEXAS Ratio of Outstanding Debt by Type Last Ten Fiscal Years Unaudited Governmental Activities Business -Type Activities Table 10 Financed Leases/ Utility Rate Financed Leases/ Purchases SBITA Other Supported Debt Purchases SBITA 109 2015 $ 7,285,000 $ 617,114 $ - $ - $ 38,545,000 $ - $ 2016 6,442,624 1,538,459 - - 37,997,715 - 201715,461,503 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 - 202012,975,000 950,526 - - 38,875,000 - 202111,830,000 792,453 - 955,000 80,430,000 - 2022 9,380,000 629,538 218,870 770,000 90,440,000 - 2023 9,860,000 461,737 345,965 580,000 113,005,000 - 167,524 2024 29,665,000 288,902 1,024,735 390,000 128,770,000 - 130,752 Sources: City Finance Office Samco Capital Markets, Inc. Bureau of Economic Analysis Table 10 (Continued) Business -Type Activities Total Percentage Primary of Personal Per Other Government Income Capita $ - $ 46,447,114 2.49% $ 1,843 - 45,978,798 2.47 1,810 - 62,034,605 3.23 2,440 110 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 - 124,420,226 4.72 5,022 160,269,389 6.00 6,408 101,438,408 3.99 4,135 111 Taxing Jurisdiction CITY OF PARIS, TEXAS Direct and Overlapping Governmental Activities Debt September 30, 2024 Unaudited General Obligation Bonded Debt Outstanding Lamar County $ 4,880,000 Paris Independent School District 3 8,645,000 Chisum Independent School District 49,800,249 North Lamar Independent School District 42,570,000 Subtotal Overlapping Debt 1 35,895,249 City of Paris (Direct Debt) 29,651,818 Total Direct and Overlapping Debt 165,547 -067 Per Capita Direct and Overlapping Funded Debt $ 6,640 Percent Applicable to Government Table 11 Amount Applicable to Government 62.75% $ 3,062,199 49.30 19,051,985 47.75 23,779,619 58.23 24,788,511 70,682,314 2 100.00 9,651,818 Sources: Outstanding debt and applicable percentages provided by each governmental unit. 112 A 100.334.132 $ 4,025 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 borne 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. CITY OF PARIS, TEXAS Table 12 Legal Debt Margin Information September 30, 2024 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 $.47782 per $100 valuation for the fiscal year ended September 30, 2024. 113 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 CITY OF PARIS, TEXAS Table 14 Demographic and Economic Statistics Last Ten Calendar Years Unaudited Paris, TX Paris, TX Micropolitan Net Revenue Average Remaining Paris, TX Micropolitan Service Area Micropolitan Available Debt Service Requirements Service Area Fiscal Gross Operating For Debt Personal Percent Year Revenues* menses** Service Principal interest Total*** Coverage 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 2021-22 20,198,510 10,254,224 9,944,286 - - - N/A 2022-23 24,310,011 11,955,809 12,354,202 956,964 844,960 1,801,924 6.86% 2023-24 26,309,801 12,479,380 13,830,421 978,519 826,765 1,805,284 7.66% 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 CITY OF PARIS, TEXAS Table 14 Demographic and Economic Statistics Last Ten Calendar Years Unaudited Paris, TX 114 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 Rate Year Population Income Income Age Enrollments (1) 2014 49,523 $ 1,859,083,000 $ 37,540 40.4 12,414 6.1 114 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 2021 50,484 2,539,934,000 50,311 39.4 11,800 4.3 2022 51,127 2,655,332,000 51,936 40.3 11,811 3.8 2023 51,249 2,661,668,064 51,936 * 42.2 11,826 3.9 (1) Includes Paris Independent School District, North Lamar Independent School District, Huhtamaki** Chisum Independent School District, and Paris Junior College 180 6 1.70% Sources: Paris Independent School District - 3,767 North Lamar Independent School District - 2,372 Chisum Independent School District - 1,194 Paris Junior College - 4,493 Bureau of Economic Analysis US Census Bureau * Next data update is 12/03/2025 CITY OF PARIS, TEXAS Table 15 Principal Employers Fiscal Years End 2024 and 2015 Unaudited September 30, 2024 September 30, 2015 115 Percentage Percentage of Total of Total City City Taxpayer Employees Rank Employment Employees Rank Employment Paris Regional Medical Center 900 1 8.34% 700 4 6.78% Kimberly-Clark Corporation 700 2 6.48% 730 2 6.88% Campbell Soup Company 680 3 6.30% 905 1 8.53% The Results Company* 419 4 3.88% - 0.00% HWH/WePack Logistics 419 5 3.88% 150 7 1.41% RK Hall Construction LTD 200 6 1.85% 299 5 2.82% Delco Trailers 200 7 1.85% - 0.00% Huhtamaki** 189 8 1.75% 180 6 1.70% American SpiralWeld 140 9 1.29% - 0.00% Paris Print Works 100 10 0.92% - 0.00% Turner Industries - 0.00% 720 3 6.60% J Skinner Baking Co. - 0.00% 95 9 0.90% Silgan Can Co. - 0.00% 78 10 0.74% Daisy Farms - 0.00% 115 8 1.08% 115 Totals Source: U.S. Department of Labor PEDC Bureau of Labor Statistics Additional Information: Public Employers: Paris ISD North Lamar ISD City of Paris Paris Junior College Chisum ISD Lamar County Total Notes: O TCIM in 2015 ( *) Paris Packaging in 2015 605 440 344 310 194 2 104 3.947 36.54% 3.972 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 Fiscal Year 37.44% Table 16 GVIJ /kyM LVI/ LVI6 1 1 1 1 3 3 3 3 1,299 1,313 1,333 1,357 51 51 51 51 2.02 2.01 2.00 2.00 1 1 1 1 81,893 84,162 85,630 72,288 127,824 119,265 114,611 103,389 5.07 4.69 4.50 4.06 15,507 13,551 14,312 10,441 1 1 1 1 60 60 60 57 2.38 2.36 2.35 2.24 87 87 87 87 221 221 221 221 116 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 24 24 24 24 160 171 171 171 3 3 3 3 11,006,721 10,701,294 13,241,942 10,759,444 20,662,000 17,983,000 18,493,000 18,137,000 4,017,453,000 3,977,369,000 4,833,309,000 3,927,197,000 185 185 185 185 10,024 9,995 9,766 9,698 209 209 209 209 39.18 38.02 38.02 38.02 327 328 330 331.5 Table 16 (Continued) Fiscal Year 2019 2020 2021 2022 2023 2024 3 3 3 3 3 3 1,367 1,408 1,399 1,510 1,515 1,519 51 51 51 52 52 52 2.00 2.00 2.08 2.12 2.08 2.08 1 1 1 1 1 1 81,18579,821 81,739 82,409 83,003 81,969 99,239 81,249 86,120 103,731 95,982 89,429 3.90 3.19 3.51 4.24 3.85 3.58 8,734 8,424 9,337 10,345 10,550 12,766 1 1 1 1 1 1 57 57 57 57 57 57 2.24 2.24 2.32 2.12 2.28 2.28 87 87 87 87 87 87 221 221 221 221 221 221 24 24 24 24 24 24 174 174 174 174 174 174 3 3 3 3 3 3 117 10,775,920 11,13 8,000 11,740,173 13,715,333 14,907,339 19,202,000 17,747,000 19,386,000 29,661,000 22,876,000 3,937,831,000 4,078,053,000 4,285,163,000 5,015,467,000 5,574,431,000 3 185 185 185 185 185 9,679 9,810 9,754 9,776 9,778 209 209 209 209 209 38.02 38.02 38.02 38.02 38.02 333 322 314 314 317 Community Centers 1 CITY OF PARIS, TEXAS 1,357 Water Mains (miles) 185 Capital Asset Statistics by Function 1,299 Maximum Daily Capacity 36,000 Last Ten Fiscal Years 7,250 Sewer Unaudited 209 Fiscal Year 13,751,515 26,013,000 5,246,754,000 185 9,778 209 38.02 317 Table 17 2015 2016 2017 2018 Function: 1 Public Safety 10 Police 10 Stations 1 Patrol Units 10 Fire Stations 3 Sanitation 174 Collection Trucks 6 Highways and Streets 2,231 Streets (miles) 174 Streetlights 2,228 Traffic Signals* - Culture and Recreation 14 Park Acreage 286 Swimming Pools - Municipal 1 Tennis Courts 14 Community Centers 1 Water 1,357 Water Mains (miles) 185 Fire Hydrants 1,299 Maximum Daily Capacity 36,000 (thousands of gallons) 7,250 Sewer Sanitary Sewers (miles) 209 Maximum Daily Treatment Capacity 7,250 (thousands of gallons) Source: Various City Departments * City has none. All inside the City limits belong to the State of Texas. 118 1 1 1 10 10 10 3 3 3 6 6 6 174 174 174 2,228 2,230 2,231 286 286 286 1 1 1 14 14 14 1 1 1 185 185 185 1,313 1,333 1,357 36,000 36,000 36,000 209 209 209 7,250 7,250 7,250 Table 17 (Continued) Fiscal Year 2019 2020 2021 2022 2023 2024 1 1 1 1 1 1 10 10 10 10 10 10 3 3 3 3 3 3 6 6 6 6 6 0 174 174 174 174 174 174 2,235 2,235 2,235 2,235 2,240 2,240 308 308 308 308 308 308 1 1 1 1 1 1 14 14 14 14 14 14 1 1 1 1 1 1 185 185 185 185 185 185 1,367 1,408 1,399 1,510 1,515 1,519 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 CITY OF PARIS, TEXAS Table 18 Building Permits at Market Value Last Ten Fiscal Years Unaudited Commercial Residential Total Property Value Commercial Construction Residential Construction Construction Fiscal Year Units Value Units Value Value 2015 14 $ 61,243,705 10 $ 823,430 $ 62,067,135 2016 59 7,838,210 44 3,252,018 11,090,228 2017 18 12,653,657 21 3,914,081 16,567,738 2018 33 39,273,020 31 4,101,770 43,374,790 2019 15 64,446,766 25 3,744,359 68,191,125 2020 21 15,636,180 36 5,366,500 21,002,680 119 2021 8 7,995,151 17 1,908,787 9,903,938 2022 17 43,395,000 35 7,237,430 50,632,430 2023 4 11,565,427 15 3,766,818 15,332,245 2024 9 3,284,857 31 8,452,403 11,737,260 Sources: City of Paris Community Development Department CITY OF PARIS, TEXAS Table 19 Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years Unaudited Fiscal Year 2015 2016 2017 2018 Function: Manager 3.0 3.0 3.0 3.0 Attorney 4.0 4.0 4.0 2.0 Court Clerk 4.0 4.0 4.0 4.0 City Clerk 2.0 2.0 2.0 2.0 Finance 5.0 5.0 5.0 5.0 Police* 83.0 83.0 83.0 83.5 Fire 57.0 57.0 58.0 58.0 Community Development 4.5 4.5 4.5 4.0 Engineering 7.5 7.5 7.5 6.0 Public Works 2.0 2.0 2.0 3.0 Parks & ROW 11.0 11.0 12.0 12.0 Sanitation 12.0 12.0 12.0 11.0 Streets 15.0 15.0 15.0 17.0 Traffic & Lighting 2.0 2.0 2.0 2.0 Garage 5.5 5.5 5.5 6.0 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 16.5 16.5 16.5 Water Distribution 11.0 11.0 11.0 12.5 Waste Water Collection 8.5 8.5 8.5 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 2.5 2.5 2.5 3.5 Totals 327.0 328.0 330.0 331.5 120 * Includes related grant employees. Seasonal employees not included. Source: City of Paris Finance Department Table 19 (Continued) Fiscal Year 2019 2020 2021 2022 2023 2024 3.0 3.0 4.0 4.0 4.0 5.0 2.0 2.0 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 3.0 5.0 5.0 5.0 5.0 6.0 6.0 84.0 83.0 77.5 77.5 79.5 84.5 58.0 59.0 52.0 52.0 52.0 52.0 4.0 5.5 15.0 15.0 15.0 16.0 6.0 4.5 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 12.0 11.0 10.0 10.0 10.0 12.0 12.0 8.0 6.0 6.0 6.0 0.0 17.0 11.0 12.0 12.0 12.0 16.0 2.0 1.0 1.0 1.0 1.0 1.0 6.0 5.5 6.0 6.0 6.0 5.5 27.0 27.0 27.0 27.0 27.0 30.0 10.5 10.5 10.5 10.5 10.5 11.0 2.0 2.0 2.0 2.0 2.0 2.0 8.0 8.0 8.0 8.0 8.0 9.0 17.5 18.0 18.0 18.0 18.0 17.0 12.5 9.0 11.0 11.0 11.0 14.0 8.0 8.0 8.0 8.0 8.0 9.0 21.5 26.0 21.0 21.0 21.0 21.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 333.0 322.0 314.0 314.0 317.0 332.0 121 CONTINUING DISCLOSURE INFORMATION CONTINUING DISCLOSURE INFORMATION FOR CITY OF PARIS, TEXAS UNAUDITED ASSESSED VALUATION 2024-2025 Actual Market Value of Taxable Property (100% of Actual) Less Exemptions: Local, Optional Over -65 and/or Disabled Homestead Exemptions $ 39,816,044 Disabled and Deceased Veterans' Exemptions 25,408,507 Productivity Loss 31,118,300 Personal Use of Business Vehicle 206,150 Freeport 98,576,566 Pollution Control / Solar 59,914,278 Abatement Loss 172,062,851 Cap Loss (10%) 186,491,668 Historical / Other 29,827,712 Totally Exempt Property 527,871,978 Total Exemptions 2024-2025 Net Taxable Assessed Valuation Frozen Taxable Value and Transfer Adjustment Freeze Adjusted Net Taxable Assessed Valuation Source: Lamar County Appraisal District and the Issuer. GENERAL OBLIGATION BONDED DEBT PRINCIPAL TABLE 1 $ 3,972,946,398 1.171294.054 2,801,652,344 247,824,307) $ 2 ,553,828,037 TABLE 2 General Obligation Debt Principal Outstanding: (As of September 30, 2024) Combination Tax and Revenue Certificates of Obligation, Series 2013 (TWDB) $ 1,260,000 General Obligation Bonds, Series 2016 5,840,000 General Obligation Bonds, Series 2017 6,950,000 General Obligation Bonds, Series 2018 520,000 General Obligation Refunding Bonds, Series 2020 1,210,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2020 935,000 Tax Notes, Series 2020 390,000 Combination Tax and Revenue Certificates of Obligation, Series 2021 40,760,000 General Obligation Pension Bonds, Series 2022 11,180,000 General Obligation Refunding Bonds, Series 2023 20,570,000 Combination Tax and Surplus Revenue Surplus Certificates of Obligation, Series 2024 42,790,000 Total Gross General Obligation Debt Principal Outstanding: 132,405,000 Less: Self -Supporting General Obligation Debt Principal Combination Tax and Revenue Certificates of Obligation, Series 2013 (TWDB) (100% WS) 1,260,000 General Obligation Bonds, Series 2016 (100% WS) 5,840,000 General Obligation Bonds, Series 2018 (86% WS) 520,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2020 935,000 Combination Tax and Revenue Certificates of Obligation, Series 2021 27,885,000 General Obligation Pension Bonds, Series 2022 11,180,000 Combination Tax and Surplus Revenue Certificates of Obligation, Series 2024 42,790,000 Total Self-SlWporting General Obligation Debt Outstanding Following the Issuance of the Bonds: 90,410,000 Total Net General Obligation Debt Principal Outstanding Following the Issuance of the Bonds: $ 41,995,000 General Obligation Interest and Sinking Fund Balmice as of September 30, 2024 $ 3,089,892 Ratio of Gross General Obligation Debt Principal to 2023-24 Freeze Adjusted Net Taxable Assessed Valuation 5.18% Ratio of Net General Obligation Debt Principal to 2023-24 Freeze Adjusted Net Taxable Assessed Valuation 1.64% 2024-25 Freeze Adjusted Net Taxable Assessed Valuation $ 2,553,828,037 Population: 1980 - 25,498; 1990 - 24,699; 2000 - 25,898; 2010 - 25,171 Current (Estimate) 24,930 Per Capita 2024-2025 Freeze Adjusted Net Taxable Assessed Valuation $ 102,440 Per Capita Gross General Obligation Debt Principal $ 5,311 Per Capita Net General Obligation Debt Principal $ 1,685 123 CONTINUING DISCLOSURE INFORMATION FOR CITY OF PARIS, TEXAS UNAUDITED WATERWORKS AND SEWER SYSTEM REVENUE DEBT SERVICE REQUIREMENTS TABLE 2A Current Total Debt The Bonds Combined Debt Fiscal Year 9/30 Service Principal Interest Total Service 2025 $ - $ 400,000 $ 1,317,488 $ 1,717,488 $ 1,717,488 2026 - 510,000 1,297,488 1,807,488 1,807,488 2027 - 535,000 1,271,988 1,806,988 1,806,988 2028 - 565,000 1,245,238 1,810,238 1,810,238 2029 - 590,000 1,216,988 1,806,988 1,806,988 2030 - 625,000 1,186,013 1,811,013 1,811,013 2031 - 655,000 1,153,200 1,808,200 1,808,200 2032 - 680,000 1,127,000 1,807,000 1,807,000 2033 - 715,000 1,093,000 1,808,000 1,808,000 2034 - 750,000 1,057,250 1,807,250 1,807,250 2035 - 790,000 1,019,750 1,809,750 1,809,750 2036 - 830,000 980,250 1,810,250 1,810,250 2037 - 870,000 938,750 1,808,750 1,808,750 124 2038 - 915,000 895,250 1,810,250 1,810,250 2039 - 960,000 849,500 1,809,500 1,809,500 2040 - 1,005,000 801,500 1,806,500 1,806,500 2041 - 1,060,000 751,250 1,811,250 1,811,250 2042 - 1,110,000 698,250 1,808,250 1,808,250 2043 - 1,165,000 642,750 1,807,750 1,807,750 2044 - 1,225,000 584,500 1,809,500 1,809,500 2045 - 1,285,000 523,250 1,808,250 1,808,250 2046 - 1,350,000 459,000 1,809,000 1,809,000 2047 - 1,415,000 391,500 1,806,500 1,806,500 2048 - 1,490,000 320,750 1,810,750 1,810,750 2049 - 1,560,000 246,250 1,806,250 1,806,250 2050 - 1,640,000 168,250 1,808,250 1,808,250 2051 - 1,725,000 86,250 1,811,250 1,811,250 $ - $ 26,420,000 $ 22,322,653 $ 48,742,653 $ 48,742,653 CLASSIFICATION OF ASSESSED VALUATION(.) TABLE 3 % of % of % of % of % of Cateaory 2023-24 Total 2022-23 Total 2021-22 Total 2020-21 Total 2019-2020 Total Real, Residential, Single -Family $ 1,110,751,880 27.96% $ 1,031,677,640 27.86% $ 943,179,877 26.69% $ 758,658,443 23.85% $ 713,569,554 25.47% Real, Residential, Multi -Family 127,656,257 3.21% 126,527,250 3.42% 121,204,107 3.43% 112,201,519 3.53% 78,929,430 2.82% Real, Vacant Lots/Tracts 28,439,521 0.72% 30,581,641 0.83% 31,534,732 0.89% 31,470,634 0.99% 30,827,095 1.10% Real, Acreage (Land Only) 32,448,640 0.82% 29,551,335 0.80% 20,958,160 0.59% 20,972,380 0.66% 20,517,420 0.73% Farm & Ranch Improvements 38,014,825 0.96% 31,072,118 0.84% 30,038,194 0.85% 25,293,068 0.80% 23,098,838 0.82% Real, Commercial 502,864,629 12.66% 429,520,635 11.60% 431,656,699 12.22% 409,844,864 12.89% 267,504,955 9.55% Real Industrial 695,884,960 17.52% 686,461,320 18.54% 667,764,200 18.90% 687,876,550 21.63% 594,799,020 21.23% Real & Tangible, Personal Utilities 67,749,210 1.71% 65,999,990 1.78% 60,626,630 1.72% 57,691,980 1.81% 55,391,760 1.98% Tangible Personal, Commercial 194,335,030 4.89% 183,405,280 4.95% 164,277,840 4.65% 151,679,870 4.77% 145,136,550 5.18% Tangible Personal, Industrial 581,880,940 14.65% 589,051,200 15.91% 611,674,330 17.31% 519,985,340 16.35% 494,875,900 17.67% Tangible Personal, Mobile Homes 2,050,620 1.19% 1,875,540 0.92% 1,823,340 0.04% 890,630 0.04% 769,900 0.04% Residential/ Special, Inventory 24,781,570 0.62% 24,133,650 0.65% 25,135,220 0.71% 20,948,400 0.66% 19,937,470 0.71% Totally Exempt Property 566,088,316 13.11% 473,230,545 11.91% 423,675,741 12.00% 382,866,616 12.03% 355,713,491 12.69% Total Market Value 3,972,946,398 100.00% 3,703,088,144 100.00% 3,533,549,070 100.00% 3,180,380,294 100.00% 2,801,071,383 100.00% Less Exemptions: Productivity Loss 31,118,300 28,516,425 19,856,605 19,992,060 19,523,280 Cap Loss (10%) 186,491,668 171,024,527 150,758,853 79,061,864 107,587,489 Local, Optional Over-65/Disabled 39,816,044 39,064,776 40,935,341 45,303,916 40,632,898 Disabled and Deceased Veterans' 25,408,507 19,872,481 18,533,812 12,132,564 10,827,192 Exempt Property 527,871,978 444,609,999 396,184,061 361,607,606 338,281,483 Freeport 98,576,566 119,291,230 111,908,964 91,612,816 85,531,645 Pollution Control / Solar 59,914,278 59,391,206 62,479,174 62,080,048 65,128,932 Tax Abatement Loss 172,062,851 204,517,377 281,560,424 259,158,157 187,457,093 Personal Use of Business Vehicle 206,150 306,980 319,140 303,980 382,630 Other / Historical 29,827,712 27,504,617 27,546,091 21,125,710 17,220,053 Total Exemptions 1,171,294,054 1,114,099,618 1,110,082,465 952,378,721 872,572,695 Net Taxable Assessed Valuation 2,801,652,344 2,588,988,526 2,423,466,605 2,228,001,573 1,928,498,688 Freeze Taxable & Transfer Adjustment (247,824,307) (218,217,870) (190,151,876) (178,970,749) (155,792,063) UNAUDITED Freeze Adjusted Net Taxable Assessed Valuation 2.553.828.037 S 2.370.770.656 S 2.233.314.729 S 2.049.030.824 S 1.772.706.625 11) Values shown in this table are Certified Values as ofJuly. Values may change during the tax year due to various supplements and protests. Valuations reported on a different date may not match those shown on this table. Source: Lamar County Appraisal District and the Issuer. 125 PRINCIPAL TAXPAYERS 2023-24 (UNAUDITED) Name La Frontera Holdings LLC Campbell Soup Kimberly Clark Corporation American Spiral Weld III, Inc Essent PRMC LP Oncor Electric Delivery Company Potter Industries LLC Atmos Energy Huhtamaki Inc. Paris Generation, LP Total TABLE 4 Based on a 2024 Freeze Adjusted Net Taxable Assessed Valuation of S 2,553,828,037 Source: Lamar County Appraisal District PROPERTY TAX RATES AND C;OLLEC;TIONS (UNAUDITED) % of TABLE 5 Total 2024 Type of Property 2024 Net Taxable Assessed Electric Utility Food Assessed Valuation Valuation Manufacturing S 360,663,800 14.12% Disposable Diaper 168,734,582 6.61% Mfg. 152,988,823 5.99% Pipe Manufacturer 62,649,957 2.45% Health Care Services/Hospital 48,488,870 1.90% Utility 35,357,285 1.38% Manufacturing 22,209,231 0.87% Gas Utility 20,251,990 0.79% Package Manufacturing 19,392,104 0.76% Electric Utility 18,278,800 0.72% 98.11 S 909,015,442 V5 590. Based on a 2024 Freeze Adjusted Net Taxable Assessed Valuation of S 2,553,828,037 Source: Lamar County Appraisal District PROPERTY TAX RATES AND C;OLLEC;TIONS (UNAUDITED) TABLE 5 Tax Tax Year Tax Net Taxable % Collections Rate Levy Current Total Ended Year Assessed Valuation 0) 2014 $ 1,530,367,087 0.50195 $ 7,626,530 96.35 99.17 9-30- 15 2015 1,533,734,568 0.50195 7,627,731 97.10 99.90 9-30- 16 2016 1,627,397,467 0.50195 8,093,094 98.11 (b) 99.52 (b) 9-30- 17 2017 1,681,747,299 0.55195 9,145,965 98.11 99.51 9-30- 18 2018 1,732,236,641 0.55195 9,381,829 98.15 100.71 9-30- 19 2019 1,794,161,289 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 2021 2,228,001,573 0.45373 9,888,259 97.83 99.49 9-30- 22 2022 2,423,466,605 0.44278 10,441,096 97.73 99.35 9-30- 23 2023 2,884,451,285 0.47782 12,178,254 97.65 98.99 9-30- 24 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 the year in which they were collected (a) 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. Valuationsfor tax years 2013-2022 represent Freeze Adjusted Net Taxable Valuations. (b) Current Fiscal Year collections are as of September 30, 2022 (Unaudited). Source: The Lamar Counter Appraisal District, the 00A 2023 Comprehensive Annual Financial Report and additional information from the City.. TAX RATE DISTRIBUTION (UNAUDITED) TABLE 6 128 2023-24 2022-23 2021-22 2019-20 General Fund $ 0.31292 $ 0.32176 $ 0.34377 $ 0.37357 $ 0.39788 $ 0.40868 I & S Fund 0.14828 0.15606 0.09901 0.08016 0.08290 0.10740 TOTAL $ 0.46120 $ 0.47782 $ 0.44278 $ 0.45373 $ 0.48078 $ 0.51608 Sources: Texas Municipal Report published by the Municipal Advisory Council of Texas and the Lamar Counter Appraisal District. MUNICIPAL SALES TAX TABLE 7 UNAUDITED The Issuer has adopted the provisions of Chapter 321, as amended, Texas Tax Code. 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 1/4 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: 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 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 1,658,382 87.90 0.45 1,658,382 2021 11,048,083 7,365,389 1,841,347 95.81 0.47 1,841,347 2022 11,715,522 7,810,348 1,952,587 97.83 0.48 1,952,587 2023 12,591,056 8,394,038 2,098,509 97.73 0.53 2,098,509 2024 13,079,032 8,719,355 2,179,839 89.49 0.49 2,179,839 * 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. GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND ANALYSIS OF CHANGES IN FUND BALANCES TABLE 8 UNAUDITED 129 Fiscal Year Ended September 30 Revenues: Ad Valorem Taxes $ 8,238,439 $ 8,207,911 $ 8,287,694 $ 7,971,838 $ 7,380,958 Sales Taxes 10,828,578 10,496,451 9,650,605 9,196,157 8,245,939 Franchise Tax 4,697,982 4,725,373 4,827,601 4,253,182 4,714,021 Hotel Occupancy Taxes 1,081,333 949,983 848,508 881,259 643,417 Licenses and Permits 610,658 484,807 532,557 211,668 259,117 Fines and Fees 423,160 426,856 432,115 615,721 724,259 Leases 95,074 81,361 - - - Investment Earnings 1,364,200 950,902 201,997 198,965 304,755 Sanitation 1,405,361 1,461,058 1,462,220 1,470,237 1,462,452 Health 6,637,108 8,733,472 5,933,986 4,806,996 5,117,649 Intergovernmental Revenue 2,035,101 2,051,423 1,574,428 706,574 713,570 Other Revenues 1,444,229 710,472 695,364 442,020 381,355 Total Revenues 38,861,223 39,280,069 34,447,075 30,754,617 29,947,492 Expenditures: Current General Government 2,570,804 2,412,942 1,917,259 1,613,946 1,779,229 Public Safety 12,860,941 12,479,429 23,917,194 11,367,228 12,005,945 Public Works 7,880,542 6,817,178 6,050,354 4,991,668 5,065,867 Health 6,366,967 8,717,240 5,595,417 5,199,358 4,022,732 Culture and Recreation 891,597 804,955 715,243 677,612 723,046 Cox Field Airport - - 1,224 242,809 179,631 Other 2,364,997 1,936,078 1,829,866 1,838,073 1,922,363 Capital Outlay General Government 401,747 1,386,613 561,165 252,387 109,280 Public Safety 1,585,513 689,772 1,060,330 870,874 403,654 Public Works 255,978 1,060,768 1,199,200 941,371 626,741 Health 296,877 323,283 486,604 216,631 287,256 Cox Field Airport - - - 65,000 - Debt Service 581,117 195,155 187,670 186,690 186,690 Total Expenditures 36,057,080 36,823,413 43,521,526 28,463,647 27,312,434 Excess (Deficit) of Revenues Over Expenditures 2,804,143 2,456,656 (9,074,451) 2,290,970 2,635,058 Other Financing Sources (Uses): Inception of Lease 271,089 13,421 278,821 - - Inception of Subscription -Based IT Arg. 779,748 218,091 - - - Operating Transfers In 507,017 1,183,110 12,682,538 2,751,240 539,986 Operating Transfers Out (1,533,905) (1,822,765) (603,609) (802,211) (29,319) Proceeds From Sale of Capital Assets - 210,000 155,367 151,266 28,000 Total Other Financing Sources (Uses): 2024 23,949 2023 (198,143) 2022 12,513,117 2021 2,100,295 2020 538,667 Excess of Revenues and Other Sources Over Expenditures and Other Uses 2,828,092 2,258,513 3,438,666 4,391,265 3,173,725 Fund Balance - Beginning of Year, as previously presented 27,329,955 25,071,442 21,420,072 17,150,077 13,451,478 Restatement 214,318 - 212,704 (52,060) 524,874 Fund Balance - Beginning of Year, as restated 27,544,273 25,071,442 21,632,776 17,098,017 13,976,352 Fund Balance - End of Year $ 30,372,365 $ 27,329,955 $ 25,071,442 $ 21,489,282 $ 17,150,077 130 Source: The Issuer's Comprehensive Annual Financial Reports. CONDENSED WATERWORKS AND SEWER SYSTEM OPERATING STATEMENT (UNAUDITED) TABLE 9 131 Fiscal Year Ended September 30 Operating Revenues (a) Total Revenues $ 26,309,801 $ 19,633,034 $ 18,397,839 $ 16,567,528 $ 15,043,788 Expenses (e) 12,939,187 11,736,249 10,151,891 1 0,308,035 9,602,622 Net Revenue Available for Debt Service $ 13,370,614 $ 7,896,785 $ 8,245,948 $ 6,259,493 $ 5,441,166 Annual Revenue Bond Debt Service Requirements $ 1,711,737 $ - $ - $ - $ Coverage of Annual Revenue Bond Requirements 5.54 N/A N/A N/A N/A Annual Requirements on all Bonds Paid from $ 7,115,603 $ 6,624,452 $ 5,289,797 $ 3,842,897 $ 3,845,397 System Revenues Coverage of Annual Requirements on all 1.33 x 1.19 x 1.56 x 1.63 x 1.41 x Bonds Paid from System Revenues Customer Count: Water 9,755 9,778 9,786 9,762 9,810 Sewer 9,324 9,362 9,198 9,175 9,221 Revenues include operating revenues, interest income and other revenues of the Waterworks and Sewer System. h> Expenses include total expenses less depreciation and amortization of the Waterworks and Sewer System. Sources: Information fi^om the Issuer and the Issuer's Annual Audited Financial Reports. WATER RATES (UNAUDITED) 2024 2023 2022 2021 TABLE 10 2020 Current Rates (Rates Effective July I, 2022) Residential Class Service in Excess of Base Meter Size Base Cost (For Each Additional (Inches) (Per Cubic Foot) 100 Cubic Feet) 5/8" - 3/4" $13.69 for first 200 Cubic Feet $5.04 / 100 Cubic Feet 1" and Larger $66.81 for first 1,000 Cubic Feet $5.04 / 100 Cubic Feet Commercial Industrial Class Service in Excess of Base Meter Size Base Cost (For Each Additional (Inches) (Per Cubic Foot) 100 Cubic Feet) 131 5/8" - 3/4" $16.36 for first 200 Cubic Feet $4.94 / 100 Cubic Feet 1" - 2" $65.54 for first 1,000 Cubic Feet $4.03 / 100 Cubic Feet Larger than 2" $235.24 for first 2,000 Cubic Feet Commercial Industrial $4.03 / 100 Cubic Feet 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" 6" 8" and Larger Source: Information fi^om the Issuer $4,034.82 for first 100,000 Cubic Feet $6,052.22 for first 150,000 Cubic Feet $8,069.63 for first 200,000 Cubic Feet 132 $4.03 / 100 Cubic Feet $4.03 / 100 Cubic Feet $4.03 / 100 Cubic Feet PRINCIPAL WATER CUSTOMERS 2023-2024 (UNAUDITED) TABLE 11 (October I, 2023 to September 30, 2024) Average Monthly Average Name of Customer Consumption Monthly Bill Lamar Power Partners* 18,053,080 $ 50,596 Campbell Soup Company 13,850,187 81,413 Lamar County Water Supply 13,568,872 80,465 American SpiraWeld 8,339,575 8,395 Daisy Farms* 3,253,671 21,476 Paris Generation 2,177,204 30,743 Kimberly Clark 706,540 28,483 Paris Housing Authority 235,263 8,163 Lamar County Human Resources 103,585 4,199 Paris Junior College 90,019 4,233 Total 60,377,996 $ 318,166 Total Water Sales as of September 30, 2024 (unaudited) $ 9,038,642 tai Principal Water Customers represent approximately 42.24016 of total annual water sales. Includes raw water sales. SEWER RATES (UNAUDITED) TABLE 12 Current Rates (Residential Rates Effective April I, 2024) Residential Class Service in Excess of Base Meter Size Base Cost (For Each Additional (Inches) (Per Cubic Foot) 100 Cubic Feet) 3/4" or Less $25.92 for first 200 Cubic Feet $12.80 / 100 Cubic Feet 1" and Larger $127.99 for first 1,000 Cubic Feet $12.80 / 100 Cubic Feet (Commercial Rates Effective April I, 2024) Commercial Industrial Class Service in Excess of Base Meter Size Base Cost (For Each Additional (Inches) (Per Cubic Foot) 100 Cubic Feet) 3/4" or Less $34.49 for first 200 Cubic Feet $13.28 / 100 Cubic Feet 1" - 2" $132.81 for first 1,000 Cubic Feet $13.28/ 100 Cubic Feet Larger than 2" $265.66 for first 2,000 Cubic Feet $13.28 / 100 Cubic Feet PRINCIPAL SEWER CUSTOMERS - 2023-2024 (UNAUDITED) TABLE 13 (October I, 2023 to September 30, 2024) Average Monthly Average Name of Customer Consumption Monthly Bill Kimberly Clark 341,303 $ 43,328 Paris Housing Authority 185,427 23,533 Lamar County Human Resources 103,585 13,185 Campbell Soup Supply 71,580 9,062 Paris Junior College 79,490 10,796 Spanish Oaks 65,744 8,276 Lamar County 54,666 7,063 North Lamar ISD 52,808 6,725 Potters Industries 51,321 6,523 Paris ISD 49,984 6,662 Total 1,055,908 $ 135,153 Total Sewer Charges as of September 30, 2024 (unaudited) $ 11,335,300 (a) Principal Sewer Customers represent approximately 14.30016 of total annual sewer charges. 130 OVERALL COMPLIANCE, INTERNAL CONTROLS AND FEDERAL AWARDS SECTION CITY OF PARIS, TEXAS Overall Compliance, Internal Controls, And Federal Awards Section September 30, 2024 This section includes elements required by Government Auditing Standards, issued by the Comptroller General of the United States and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). 131 George H. Struve, CPA Debra J. Wilder, CPA Teffany A. Kavanaugh, CPA April J. Hatfield, CPA Brittany L. Martin, CPA Steven W. Mohundro, CPA, of Counsel MCCLANAHAN AND HOLMES , LLP Certified Public Accountants 228 Sixth St. SE Paris, TX 75460 903-784-4316 Fax 903-784-4310 304 W. Chestnut Denison, TX 75020 903-465-6070 Fax 903-465-6093 1400 W. Russell Bonham, TX 75418 903-583-5574 Fax 903-583-9453 Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with GovernmentAuditzng S'tarzdards Honorable Mayor, Members of the Citv_ Council, and City Manager Citv of Paris, Texas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governmentfluditzng S`tarzdards issued by the Comptroller General of the United States, the financial statements of the govermnental 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 (the City), as of and for the year ended September 30, 2024, and the related notes to the financial statements, which collectively_ comprise the City's basic financial statements, and have issued our report thereon dated September 19, 2025 Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakliess is a deficiencv, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencv described in the accompanying schedule of findings and questioned costs as item 2024-02 to be a material weakness. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, vet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2024-01 to be a significant deficiencv. 132 Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. City of Paris, Texas' Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the City's response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. �AkCfanahan andifofines, LLP Certified Public Accountants Paris, Texas September 19, 2025 133 CITY OF PARIS, TEXAS Summary Schedule of Prior Audit Findings Year Ended September 30, 2024 FINDING / RECOMMENDATION Financial Statement Findings Finding 2023-01— Financial Accounting and Reporting Condition: The City does not control the period -end financial reporting process including controls over procedures used to analyze transactions compromising general ledger activity and controls over recording recurring and non-recurring adjustment to the financial statements. Recommendation: We recommend that management of the City of Paris, Texas maintain close oversight of the accounting and period -end financial reporting process, and have a routine closing process and develop a comprehensive list of reconciliations and financial reporting duties to be performed on a routine basis. Current Status: The City is working to improve oversight of the accounting and period -end financial reporting process (on-going). 134 CITY OF PARIS, TEXAS Schedule of Findings and Questioned Costs Year Ended September 30, 2024 Summary of Auditors' Results 1. The auditors' report expresses an unmodified opinion on the financial statements of the City of Paris, Texas. 2. One significant deficiency and one material weakness disclosed during the audit of the financial statements are reported in the Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3. No instances of noncompliance material to the financial statements of the City of Paris, Texas, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. No significant deficiencies in internal control over major federal award programs disclosed during the audit are reported in the Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance. No material weaknesses were identified. 5. The auditors' report on compliance for the major federal awards programs for the City of Paris, Texas expresses an unmodified opinion on all major federal programs. 6. There were no audit findings that are required to be reported in accordance with 2 CFR 200.516(a). 7. The programs tested as major programs were: 21.027 COVID-19: Coronavirus State and Local Fiscal Recovery Funds 8. The threshold used for distinguishing between Type A and B programs was $750,000. 9. City of Paris, Texas, was determined to be a high-risk auditee. 135 CITY OF PARIS, TEXAS Schedule of Findings and Questioned Costs (Continued) Year Ended September 30, 2024 Financial Statement Findings Significant Deficiencies Finding 2024-01— Internal Controls Related to Bank Reconciliations Criteria: Accurate bank reconciliations should be performed and reviewed by management monthly. Condition: Internal controls were not properly implemented to reconcile items that should have been investigated and corrected in a timely manner on monthly cash reconciliations. Management did not review bank reconciliations prepared by finance department staff. Cause: Account reconciliations were not accurate in clearing of outstanding items and were not properly reviewed by management to ensure accuracy. Effect: As a result of this condition, cash reconciliations misrepresented cash balance at year end, resulting in deposits and checks not being properly recorded in the general ledger. Recommendation: We recommend the City of Paris, Texas perform bank reconciliations addressing all outstanding items and that management review and approve reconciliations monthly. Any reconciling items should be investigated and corrected in a timely manner. Material Weaknesses Finding 2024-02 — Financial Accounting and Reporting Criteria: The City's management should be responsible for preparing period -end financials including recording recurring and non-recurring adjustments to the financial statements and preparing reconciliations of various general ledger accounts. Condition: The City does not control the period -end financial reporting process including controls over procedures used to analyze transactions compromising general ledger activity and controls over recording recurring and non-recurring adjustments to the financial statements. As a result, during the audit, we noted multiple instances where reconciliations of various general ledger accounts were not reconciled in a timely manner, which resulted in a high volume of post -closing entries and adjusting journal entries. Monthly reconciliations of receivables, related revenue, and payables are important components of the internal control structure and assist with identifying potential errors and misstatements. Cause: Reconciliations and proper closing processes are not being performed timely and accurately. Effect: As a result of this condition, the City lacks internal controls over the period -end financial reporting resulting in multiple post -close and adjusting entries. Recommendation: We recommend that management of the City of Paris, Texas maintain close oversight of the accounting and period -end financial reporting process, and have a routine closing process and develop a comprehensive list of reconciliations and financial reporting duties to be performed on a routine basis. Further, we recommend monitoring be performed to ensure these functions are carried out effectively. Federal Award Findings and Questioned Costs The audit disclosed no findings required to be reported. Xq p, 'S 136 Corrective Action Plan Year Ended September 30, 2024 FINDING/RECOMMENDATION 2024-01 Internal Controls Related to Bank Reconciliations Recommendation: We recommend the City of Paris, Texas perform bank reconciliations addressing all outstanding items and that management review and approve reconciliations monthly. Any reconciling items should be investigated and corrected in a timely manner. Response: The City will investigate any reconciling items during the monthly reconciliation process. Monthly reconciliations will be reviewed and approved by management. Contact Person: Gene Anderson, Finance Director Estimated Completion Date: September 30, 2025 2024-02 Financial Accounting and Reporting Recommendation: We recommend that management of the City of Paris, Texas maintain close oversight of the accounting and period -end financial reporting process, and have a routine closing process and develop a comprehensive list of reconciliations and financial reporting duties to be performed on a routine basis. Further, we recommend monitoring be performed to ensure these functions are carried out effectively. Response: The City's management agrees to maintain close oversight of the accounting and period -end financial reporting process. Contact Person: Gene Anderson, Finance Director Estimated Completion Date: Ongoing 137 George H. Struve, CPA Debra J. Wilder, CPA Tefffany A. !Cavanaugh, CPA April J. Hatfield, CPA Brittany L. Martin, CPA Steven W. Mohundro, CPA, of Counsel MCCLANAHAN AND HOLMNS, LLP Certified Public Accountants 228 Sixth St. SE Paris, TX 75460 903-784-4316 Fax 903-784-4310 304 W. Chestnut Denison, TX 75020 903-465-6070 Fax 903-465-6093 1400 W. Russell Bonham, TX 75418 903-583-5574 Fax 903-583-9453 Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Paris, Texas' (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended September 30, 2024. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2024. Basis for Opinion on Each Major Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City's compliance with the compliance requirements referred to above. Responsibilities of Managementfor Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City's federal programs. 138 Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas Auditors'Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, GovernmentAuditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgement made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we: • Exercise professional judgement and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 139 Honorable Mayor, Members of the City Council, and City Manager City of Paris, Texas Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Paris, Texas September 19, 2025 140 �AkCfanahan andifofines, LLP Certified Public Accountants CITY OF PARIS, TEXAS Schedule of Expenditures of Federal Awards Year Ended September 30, 2024 Federal Assistance Listing Federal Grantor/Pass-Through Grantor/Program Title Number U.S. Department of Housing and Urban Development Passed through Texas Department of Housing & Community Affairs: Home Investment Partnership Program Passed through Texas Department of Agriculture: Community Development Block Grants/State's Program Total U.S. Department of Housing and Urban Development U.S. Department of the Interior Passed Through Texas Historical Commission: Historic Preservation Fund Grant -In -Aid Total U.S. Department of the Interior U.S. Department of Justice Direct Programs: Edward Byrne Justice Assistance Grant Program Total U.S. Department of Justice U.S. Department of Transportation Passed Through Texas Department of Transportation - Division of Aviation: Airport Improvement Program Total U.S. Department of Transportation U.S. Department of Treasury Passed Through Texas Division of Emergency Management: COVID-19 - Coronavirus State and Local Recovery Funds Total U.S. Department of Treasury National Endowment for the Humanities Passed Through Texas State Library and Archives Commission FY2023 ILL Lending Reimbursement Program Total National Endowment for the Humanities U.S. Department of Homeland Security Passed Through Office of the Governor: Homeland Security Grant Program Total U.S. Department of Homeland Security Total Expenditures of Federal Awards Expenditures Project Federal to Number Expenditures Subrecipients 14.239 1002887 $ 193,062 $ 14.228 CDM23-0207 19,200 212,262 15.904 TX -24-018 2,329 2,329 16.738 15PBJA-22-GG-02713-JAGX 916 916 20.106 M2401PARI 91,727 91,727 21.027 1505-0271 1,930,232 1,930,232 45.310 LS -252486 -OL -23 97.067 4786101 The accompanying notes are an integral part of this schedule. See Notes on Accounting Policies for Federal and State Awards. 1,310 1,310 18,238 18.238 -)-)57011 141 CITY OF PARIS, TEXAS Notes on Accounting Policies for Federal Awards Year Ended September 30, 2024 Note l: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Paris, Texas (the City) under programs of the federal government for the fiscal year ended September 30, 2024. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City. Note 2: Summarof Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Note 3: Indirect Cost Rate The City has elected not to use the 15 -percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 4: Program Costs/ Matching Contributions The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the City's portion, may be more than shown. 142