WS - D - Tiffin FS - FY 2023

City of Tiffin Notes to Basic Financial Statements NOTE 4 – PENSION PLAN (CONTINUED) I. IPERS Fiduciary Net Position Detailed information about IPERS' fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS' website at www.ipers.org. NOTE 5 – COMPENSATED ABSENCES City employees accumulate a limited amount of earned but unused vacation and compensatory time for subsequent use or for payment upon termination, retirement, or death. These accumulations are not recognized as disbursements by the City until used or paid. The City's approximate liability for earned other leave payable to employees at June 30, 2023, primarily relating to the General Fund is $80,091. This liability has been computed based on rates of pay as of June 30, 2023. NOTE 6 – RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by the purchase of commercial insurance. The City assumes liability for any deductibles and claims in excess of coverage limitations. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. NOTE 7 – DEVELOPMENT AGREEMENTS The City has entered into a development agreement to assist in certain urban renewal projects. The agreement requires the City to rebate portions of the incremental property tax paid by the developer in exchange for the construction of buildings and certain infrastructure improvements by the developers. The total to be paid by the City under the agreements is not to exceed $16,432,000. The total amount rebated during the year ended June 30, 2023, was $78,426. The outstanding balance of the agreements at June 30, 2023, was $15,996,630. These agreements are not a general obligation of the City. However, the agreements are subject to the constitutional debt limitation of the City. NOTE 8 – TAX ABATEMENTS Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax receipts to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. 25