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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2018 <br />I NOTE 12 -COMMITMENTS AND CONTINGENCIES (Continued) <br />A. Sales Tax Reimbursement Agreement <br />The City has entered into a sales tax reimbursement agreement in order to encourage construction and <br />improvement of property sites within the City. In return, the City is expected to make annual <br />reimbursement payments until the full amount of assistance has been remitted or over a twenty (20) year <br />period, whichever comes sooner. The annual cost of each reimbursement payment commitment is equal <br />to 50% of the net sales tax generated and received by the City above a base amount of $277,000 as <br />stipulated in the approved agreements. <br />For financial reporting purposes, the GASB Statement No. 77 defines a tax abatement as resulting from <br />an agreement between a government and an individual or entity in which the government promises to <br />forgo tax revenues and the individual or entity promises to subsequently take a specific action that <br />contributes to economic development or otherwise benefits the government or its citizens. According to <br />GASB Statement No. 77, the substance of this sales-tax reimbursement agreement meets the definition of <br />"tax abatements." <br />For the fiscal year ended June 30, 2018, under this sales-tax reimbursement agreement, the City has <br />abatements totaling $183,309. <br />Pursuant to the Sales and Use Tax law (chapter 8 Article 1 -section 7056), in order to protect the <br />confidential information of the sales taxes collected and abatements provided to each of the specific <br />agencies, the City has presented the aggregate amount abated during the current fiscal year. <br />I NOTE 13 -PENSIONS PLAN I <br />For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to <br />pensions, and pension expense, information about the fiduciary net position of the City's California <br />Public Employees' Retirement System (CalPERS) plans (Plans) and additions to/deductions from the <br />Plans' fiduciary net position have been determined on the same basis as they are reported by CalPERS. <br />For this purpose, benefit payments (including refunds of employee contributions) are recognized when <br />due and payable in accordance with the benefit terms. Investments are reported at fair value. <br />A. Plan Descriptions and Summary of Balances by Plan <br />All qualified permanent employees are eligible to participate in the City's defined benefit pension <br />plans: <br />• Miscellaneous (all other) agent multiple-employer plan <br />• Safety cost-sharing multiple-employer plan <br />These plans are administered by the California Public Employees' Retirement System (CalPERS), which <br />acts as a common investment and administrative agent for its participating member employers. Benefit <br />provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly <br />available reports that include a full description of the pension plans regarding benefit provisions, <br />assumptions and membership information that can be found on the CalPERS website. <br />74 539