Discussion and Review of FY 2026-2027 Budget

City of Tiffin Notes to Basic Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Presentation (Continued) The Enterprise Recycling Fund – This fund accounts for the operations of the City's recycling collection and disposal. The Enterprise Storm Water Fund – This fund accounts for the operation and maintenance of the City's storm water system. C. Measurement Focus and Basis of Accounting The City maintains its financial records on the basis of cash receipts and disbursements and the basic financial statements of the City are prepared on that basis. The cash basis of accounting does not give effect to accounts receivable, accounts payable and accrued items. Accordingly, the basic financial statements do not present financial position and results of operations of the funds in accordance with U.S. generally accepted accounting principles. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants and general receipts. Thus, when program disbursements are paid, there are both restricted and unrestricted cash basis net position available to finance the program. It is the City's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants and then by general receipts. When a disbursement in governmental funds can be paid using either restricted or unrestricted resources, the City's policy is generally to first apply the disbursement toward restricted fund balance and then to less-restrictive classifications – committed, assigned and then unassigned fund balances. Proprietary funds distinguish operating receipts and disbursements from non-operating items. Operating receipts and disbursements generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. All receipts and disbursements not meeting this definition are reported as non-operating receipts and disbursements. D. Governmental Cash Basis Fund Balances In the governmental fund financial statements, cash basis fund balances are classified as follows: • Restricted – Amounts restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantors, or state or federal laws or imposed by law through constitutional provisions or enabling legislation. • Unassigned – All amounts not included in the preceding classifications. The City does not have a fund balance policy that addresses minimum unassigned General Fund balance or order of spending. E. Budgets and Budgetary Accounting The budgetary comparison and related disclosures are reported as Other Information. During the year ended June 30, 2025, disbursements did exceed budgeted amounts in the Community and economic development and Capital outlay. 19