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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2024
<br />NOTE 13 – INSURANCE (Continued)
<br />The following provides a reconciliation of claims and judgments:
<br />Current Year Claims for
<br />Liability Claims and Payments in Liability Liability
<br />Balance Changes in Current and Prior Balance Due in
<br />July 1 Estimates Fiscal Years June 30 One Year
<br />2021-2022 7,051,634$ 2,241,399$ (2,223,164)$ 7,069,869$ 4,251,981$
<br />2022-2023 7,069,869 3,527,339 (2,487,830) 8,109,378 4,865,627
<br />2023-2024 8,109,378 8,451,263 (4,992,198) 11,568,443 5,499,279
<br />NOTE 14 – COMMITMENTS AND CONTINGENCIES
<br />A.Federal and State Grants
<br />The City participates in several Federal and State grant programs. These programs have been audited by
<br />the City’s independent accountants in accordance with the provisions of the Federal Single Audit Act as
<br />amended and applicable State requirements. No cost disallowances were proposed as a result of these
<br />audits. However, these programs are still subject to further examination by the grantors and the amount, if
<br />any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time.
<br />The City expects such amounts, if any, to be immaterial.
<br />B.Self-Insurance Reserves
<br />The City is a defendant in a number of lawsuits which have arisen in the normal course of business.
<br />While substantial damages are alleged in some of these actions, their outcome cannot be predicted with
<br />certainty. In the opinion of the City Attorney, these actions when finally adjudicated will not have a
<br />material adverse effect on the financial position of the City. As discussed in Note 13 to the Financial
<br />Statements, the City maintains a Self-Insurance Fund which has reserves of $3,081,369 at the end of June
<br />30, 2024. These reserves are available to satisfy any future liability.
<br />C.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, GASB Statement No. 77 defines a tax abatement as resulting from an
<br />agreement between a government and an individual or entity in which the government promises to forgo
<br />tax revenues and the individual or entity promises to subsequently take a specific action that contributes
<br />to economic development or otherwise benefits the government or its citizens. According to GASB
<br />Statement No. 77, the substance of this sales-tax reimbursement agreement meets the definition of “tax
<br />abatements.”
<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.
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