Discussion and Review of FY 2026-2027 Budget

City of Tiffin Notes to Basic Financial Statements NOTE 3 – LONG-TERM DEBT (CONTINUED) B. Revenue Notes – Direct Borrowing (Continued) The resolutions providing for the issuance of the water and sewer revenue bonds include the following provisions: • The bonds will only be redeemed from the future earnings of the enterprise activity and the bond holders hold a lien on the future earnings of the funds. • Sufficient monthly transfers shall be made to separate water and sewer revenue bond sinking accounts within the Enterprise Funds for the purpose of making the note principal and interest payments when due. • User rates shall be established at a level which produces and maintains net revenues at a level not less than 110% of the amount of principal and interest on the bonds falling due in the same year. • The City shall cause the books and accounts of the sewer and water utilities to be audited annually. • All users of the system, including the City, shall pay for usage. The City does not pay for use of the systems as required by the water and sewer revenue bond resolutions. C. Financed Purchases – Direct Borrowing Annual debt service requirements to maturity for financed purchases of the City are as follows: Year Ending Financed Purchases June 30, Principal Interest Total 2026 $ 58,520 $ 13,104 $ 71,624 2027 55,765 15,859 71,624 2028 59,792 11,833 71,625 2029 64,109 7,515 71,624 2030 38,710 2,886 41,596 Total $ 276,896 $ 51,197 $ 328,093 On August 16, 2024, the City entered into a financed purchase agreement for a street sweeper. The loan bears interest at 6.9% per annum and matures on November 1, 2028. During the year ended June 30, 2025, the City paid principal of $28,104 and interest of $1,924 on the loan. The outstanding principal balance at June 30, 2025, was $101,896. On January 15, 2025, the City entered into a financed purchase agreement for a sewer cleaner. The loan bears interest at 7.2% per annum and matures on July 1, 2029. During the year ended June 30, 2025, the City paid principal of $0 and interest of $0 on the loan. The outstanding principal balance at June 30, 2025, was $175,000. 23