BOROUGH OF IRWIN IRWIN, PENNSYLVANIA FINANCIAL STATEMENTS - CASH BASIS YEAR ENDED DECEMBER 31, 2023 BOROUGH OF IRWIN YEAR ENDED DECEMBER 31, 2023 CONTENTS Page Independent Auditor's Report 1-3 2023 DCED Municipal Annual Audit and Financial Report 4-18 Notes to the Financial Statements 19-30 Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance- Cash Basis = Budget and Actual - General Fund 32 Schedule of Revenues, Expenditures, and Changes in Fund Balance- Cash Basis - Budget and Actual - Liquid Fuels Fund 33 Combined Statement of Assets, Liabilities, and Fund Balance = Cash Basis - Special Revenue Funds 34 Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Cash Basis Special Revenue Funds 35 Statement of Net Position Cash Basis = Proprietary Funds 36 Statement of Revenues, Expenses, and Changes in Net Position - Cash Basis Proprietary Funds 37 Combined Statement of Assets, Liabilities, and Net Position - Cash Basis - Fiduciary Fund Types 38 Combined Statement of Revenues, Expenses, and Changes in Net Position - Cash Basis - Fiduciary Fund Types 39 Zelenkofske Axelrod LLC CERTIFIED PUBLIC ACCOUNTANTS AA EXPERIENCE I EXPERTISE I ACCOUNTABILITY INDEPENDENT AUDITOR'S REPORT To the Members of Council Borough of Irwin Irwin, Pennsylvania 15642 Report on the Audit of the Financial Statements Opinions We have audited the accompanying cash basis balance sheet, statement of revenues and expenditures and statement of capital expenditures and employee compensation, and the related notes to the financial statements (the "financial statements"), of the Borough of Irwin, which are included in the Pennsylvania Department of Community and Economic Development's (DCED) prescribed form as of December 31, 2023, for the year then. ended. In our opinion, the financial statements referred to above present fairly, in all material respects, the cash basis assets, liabilities, and fund balances of the Borough of Irwin, as of December 31, 2023, and the revenues it received and expenditures it paid for the year then ended, in accordance with the financial reporting provisions of the Pennsylvania Department of Community and Economic Development's prescribed form as described in Note 1. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Borough of Irwin and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter Basis of Accounting We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the cash basis of accounting in the Pennsylvania Department of Community and Economic Development's (DCED) prescribed form, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. 8305 Sir Thomas Court, Suite 100, Harrisburg, PA 17109 2370 York Road,S SuiteA-5, Jamison, PA 18929 3800 McKnight East Drive, Suite 3805, Pittsburgh, PA 15237 420 Chinquapin Round Road, Suite 2-i, Annapolis, MD: 21401 34745 Burbage Road, Frankford, DE 19945 2101 Tollgate Hill Road, Greensburg, PA 15601 wwwrdlc.ory Zelenkofske Axelrod LLC CERTIFIED PUBLIC ACCOUNTANTS A EXPERIENCE I EXPERTISE I ACCOUNTABILITY Members of Council Borough of Irwin Page 2 Responsibilities of Management for the Financial Statements Borough of Irwin's management is responsible for the preparation and fair presentation of the financial statements in accordance with the cash basis of accounting described in Note 1, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Borough of Irwin's internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Borough of Irwin's ability to continue as a going concern for ar reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Zelenkofske Axelrod LLC CERTIFIED PUBLIC ACCOUNTANTS A EXPERIENCE I EXPERTISE I ACCOUNTABILITY Members of Council Borough of Irwin Page 3 Supplementary Information Our audit was conducted for the purpose of forming opinion on the financial statements that collectively comprise the Borough's financial statements. The Schedule of Revenues, Expenditures, and Changes in Fund Balance- Cash Basis Budget and Actual = General Fund on page 32, Schedule of Revenues, Expenditures, and Changes in Fund Balance-Cash Basis-Budget and Actual-Liquid Fuels Fund on page 33, the combining special revenue fund financial statements on pages 34 through 35, the proprietary fund financial states on pages 36 through 37, and the combining fiduciary fund statements on pages 38 through 39, are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Zalank hefae Lo L64 ZELENKOFSKE AXELROD LLC January 20, 2025 Greensburg, Pennsylvania Page 4 5 & - 5 t € - E I 5 8 3 - S de 8 8 3 8 8 6 8 8 : 8 - - 5 - - e - 8 - - I 8 8 0 3 ) ) a o (4 8 3 0 J 2 8 8 C a - - - 8 1 : C 3 Page 19 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES The Borough of Irwin is incorporated under the laws of the Commonwealth of Pennsylvania. The Borough operates under a Mayor-Council form of government. The Borough provides the following services: public safety, streets, health and social services, sanitation, culture-recreation, public improvements, planning and zoning and general administrative services. The Borough regularly maintains its books on the cash receipts and disbursements method. The Borough has not made any provisions for uncollectible taxes, as all real estate taxes unpaid by the due date are liened and will be collected. A. Reporting Entity Consistent with the guidance contained in GASB Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34", the criteria used by the Borough to evaluate the possible inclusion of related entities within its reporting entity are financial accountabilty and the nature and significance of the relationship. In determining financial accountability in a given case, the Borough reviews the applicability of the following criteria. The Borough is financially accountable for: a. Organizations that make up the legal Borough entity. b. Legally separate organizations if the Borough's officials appoint a voting majority of the organization's governing body and the Borough is able to impose its will on the organization or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the Borough as defined below: Impose Its Will If the Borough can significantly influence the programs, projects, or activities of, or the level of services performed or provided by the organization. Financial Benefit or Burden Exists if the Borough (1) is entitled to the organization's resources or (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to, the organization or (3) is obligated in some manner for the debt of the organization. C. Organizations that are fiscally dependent on the Borough. Fiscal dependency is established if the organization is unable to adopt its budget, levy taxes or set rates or charges, or issued bonded debt without approval by the Borough. Based upon the application of these criteria, the Borough of Irwin has no component units, and the reporting entity is all inclusive. Page 20 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED) B. Basis of Presentation Governmental Fund Types General Fund - The General Fund is the general operating fund of the Borough. It is used to account for all activities except those required to be accounted for in another fund. Capital Projects Fund - Capital Projects funds are used to account for financial resources to be used for the acquisition of capital assets other than those financed by proprietary fund types. Debt Service Fund - Debt Service funds are used to account for resources set aside to pay interest and principal on long-term debt. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than capital projects) requiring separate accounting because of legal or regulatory provisions or administrative actions. Fund Description Liquid Fuels Liquid Fuels funds are used to account for revenues and expenditures of state liquid fuels grant funds. Neighborhood Association Accounts for revenues and expenditures used for And Recreation Board recreation program in the Borough Phase I Combined Sewer Accounts for expenditures used for sewer repairs Separation Project and replacement. Phase II and III Combined Accounts for expenditures used for sewer repairs Sewer Separation Project and replacement. CARES Act Fund Accounts for revenues and expenditures of CARES Act funding. Irwin VFD Real Estate Fund Accounts for the collection of real estate taxes collected for the purpose of supporting the volunteer fire department. Proprietary Fund Types Enterprise Funds Enterprise Funds are used to account for activities in which the governing body intends that the costs of providing goods or services will be recovered primarily through user charges or where the governing body has decided that periodic determination of revenue earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, managerial control, accountability, or other purposes. Page 21 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED) B. Basis of Presentation (Continued) Fiduciary Fund Types The Fiduciary Funds function to account for the activities related to the Police and Employees' Pension Funds which are held for the benefit of employees and retirees. These funds are restricted as to their use and are not available to the Borough to finance its operations. C. Basis of Accounting All governmental, proprietary, and fiduciary funds of the Borough demonstrate compliance with the cash basis and budget laws of Pennsylvania. The cash basis method of accounting, which is another comprehensive basis of accounting, recognizes receipts as revenues when cash or its equivalent is actually received rather than when earned, and recognizes a purchase for goods acquired or a service rendered to the Borough as an expenditure when the goods or services are actually paid for rather than when incurred. Accordingly, the accounting policies of the Borough do not conform to generally accepted accounting principles as applicable to governments and as promulgated by the Governmental Accounting Standards Board and the American Institute of Certified Public Accountants. The Borough did not adopt the accounting and recording model under GASB 34. In the future, implementation of GASB 34 will require prior period adjustments and the effect could be material. D. Assets, Liabilities, and Net Position or Fund Balance Cash and Cash Equivalents The Borough of Irwin maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pooi is displayed on the combined balance sheet as "Cash and Investments" under each fund's caption. For deposits, custodial credit risk is the risk that, in the event of bank failure, the Borough's deposits may not be returned to it. The Borough's deposits are in two financial institutions and are carried at cost plus accrued interest. Page 22 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED) D. Assets, Liabilities, and Net Position or Fund Balance (CONTINUED) Cash and Cash Equivalents (Continued) Custodial Credit Risk - For deposits custodial credit risk is the risk that in the event of the failure of the counterparty, the Borough will be able to recover the value of its investment or collateral securities that are in the possession of an outside party. As of December 31, 2023, the Borough's cash balances were $2,677,775 and its bank balances were $2,843,255. Of these bank balances, $250,000 was insured by the FDIC, $78,809 was in an external investment pool through PLGIT, and 2,514,446 was collateralized with securities held by the pledging financial institutions, or by their trust departments or agents, but not in the Borough's name. The Borough uses an external investment pool to ensure safety and to maximize efficiency, liquidity, and yield for Borough funds. At December 31, 2023, PLGIT carried an AAA rating with an average maturity of less than one year. PLGIT separately issues audited financial statements that are available to the public. The fair value of the Borough's position in the external investment pool is equivalent to the value of the pool shares and amounted to $78,809 as of December 31, 2023. The Commonwealth of Pennsylvania provides external regulatory oversight of the external investment pool. Investments Custodial Credit Risk Investments: Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Borough will not be able to recover the value of its investments or collateral security that are in the possession of an outside party. The Borough has no investments subject to custodial credit risk. Credit Risk - The Borough has no investment policy that would limit its choices to certain credit ratings. As of December 31, 2023, the Borough had investments concerning the Fiduciary Fund. Concentration of Credit Risk - Investments: Investments totaling $2,193,658 are reported by the Borough in the Fiduciary Funds. These investments are held in a trust at the Pennsylvania State Association of Borough's Municipal Retirement Trust for the Borough of Irwin Employees' and Police Retirement Plan. For further information concerning these investments, see Note 7. Property Taxes Taxes are levied on March 1 and are due and payable at that time. All unpaid taxes levied on March 1 become delinquent December 31 of the same year. Borough property tax revenues are recognized when received. Property taxes delinquent as of December 31 are passed on to Westmoreland County for collection. Page 23 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED) D. Assets, Liabilities, and Net Position or Fund Balance (CONTINUED) Compensated Absences As of December 31, 2023, the Borough's policy on compensated absences is that unused sick and vacation time do not accumulate. Consequently, sick and vacation time are expensed when used by employees and the Borough has not established an accrual for compensated absences. Budgets The Borough budget must be officially enacted before December 31 preceding the new year. The proposed budget shall be made available for public inspection for a period of ten days. The Council in its reasonable discretion may, in any year, by motion, modify the budget after its final adoption. New appropriations, supplementary appropriations, and transfers from one appropriation to another may be made during the fiscal year, either before or after the expenditure is authorized or ratified after the expenditure is made, provided it is within the current year's revenues, or the money, therefore promptly made available through borrowing, as allowed by law. The Borough budget is prepared and presented on the cash basis. General funds expenditures for public safety, sanitation, highways and streets, other public works, enterprises, and debt services exceeded the budgeted amount; however, these overages were absorbed by surpluses in other areas and higher than expected tax, fines and forfeits, interest, rents and royalties, and charges for services revenues. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Page 24 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 2: CAPITAL ASSETS Capital asset purchases are expensed when paid and retirements are recorded as revenue to the extent cash is received upon disposition. The following is a schedule of capital assets of the Borough of Irwin. The capital assets acquired prior to 2003 are valued at appraisal value as determined by Industrial Appraisals for 2002. Capital assets acquired after 2002 are recorded at cost. Balance Balance December 31, December 31, 2022 Additions Disposals 2023 Buildings $ 2,058,872 $ $ $ 2,058,872 Equipment 836,751 192,324 1,029,075 Infrastructure 7,238,086 7,238,086 Total $ 10.133.709 $ 192.324 $ $ 10.326.033 NOTE 3: SHORT TERM DEBT In December 2022, the Borough Council authorized the Borough to enter into a loan agreement with S&T Bank for a tax anticipation note for the year ended December 31, 2023. The note has an interest rate of 5%, and the final payment is due on December 31, 2023. The following schedule represents activity affecting short term debt during 2023: Balance Balance January 1, New Principal December 31, 2023 Issues Repaid 2023 Note Payable S&T Bank-2023 $ $ 150,000 $ 150,000 $ Total $ $ 150.000 $ 150.000 $ Page 25 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 4: LONG TERM DEBT The following schedule represents activity affecting long term debt during 2023:: Balance Balance Amounts January 1, New Principal December 31, Due Within 2023 Issues Repaid 2023 One Year PennVest Loan #74133 $ 220,784 $ $ 42,525 $ 178,259 $ 43,531 PennVest Loan #P33000770-102 2,018,432 225,084 1,793,348 233,647 Total $2.239.216 $ $ 267.609 $ 1.971.607 $ 277.179 The following represents the Borough's future debt service requirements. Year Ended December 31, Principal Interest Total 2024 $ 277,179 $ 47,008 $ 324,187 2025 284,326 39,861 324,187 2026 291,656 32,531 324,187 2027 299,177 25,010 324,187 2028 258,678 17,859 276,537 2029-2030 560,591 15,597 576,189 Total Debt $ 1,971.607 $ 177.869 $ 2.149.474 General long-term debt of the Borough of Irwin consists of the following: On September 13, 2006, the Borough entered into loan agreement Number 74133 with the Pennsylvania Infrastructure Investment Authority (PENNVEST) for the sum of $768,000. The terms of the loan call for 240 consecutive monthly installments. Sixty principal and interest installments beginning January 1, 2008, of $3,628.06 through December 31, 2012, at an annual interest rate of 1.278 percent. The remaining one hundred eighty (180) installments will bear interest at 2.556 percent. At December 31, 2023, the outstanding balance was: $ 178,259 On August 13, 2008, the Borough Council authorized the Borough to enter into a loan agreement with the Pennsylvania Infrastructure Investment Authority (PENNVEST) for the sum of $5,250,000. The terms of the loan will call for 240 consecutive payments. The first sixty (60) installments will bear interest at 1.274 percent and the remaining installments will bear interest at 2.547 percent. At December 31, 2023, the outstanding balance was: 1,793,348 $ 1.971.607 Page 26 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 5: INTERFUND OPERATING TRANSFERS Transfers In Transfers Out Governmental Fund Types General Fund $ 112,667 $ 919,327 Capital Projects Fund 595,709 146,744 Liquid Fuels Fund 14,411 Phase I Combined Sewer Project Fund 51,621 Phase II and III Combined Sewer Project Fund 299,581 Irwin VFD Real Tax Fund 3,349 Second Street Fund 91,400 80,505 Street Light Fund 20.000 Total Governmental Funds $ 1,188.768 $ 1,146.526 Proprietary Fund Types Sewer Project Fund $ 308,960 $ 351,202 Total Proprietary Funds $ 308.960 $ 351.202 Total Interfund Transfers $ 1,497.728 $ 1.497.728 NOTE 6: LEGAL MATTERS The Borough of Irwin is involved in various legal matters in the normal course of business of a local municipality. None of the aforementioned legal matters require contingency disclosure in the December 31, 2023, financial statements. NOTE 7: PENSION PLANS Plan Description The Borough has two single-employer defined benefit pension plans: The Police Pension Plan and the Employee Pension Plan. The Police Pension Plan was established by Ordinance No. 3-1958, effective May 12, 1958, (adopted pursuant to Act 600 of 1956) and entered into a Joinder Agreement with Pennsylvania State Association of Borough's Municipal Retirement Trust (PSABMRT) dated June 2, 1986. The Employee Pension Plan was established January 1, 1984, and entered into a Joinder Agreement with PSABMRT dated December 28, 1990. Both plans are governed by Borough Council of the Borough of Irwin which may amend plan provisions, and which is responsible for the management of each plan's assets. The Borough Council has delegated the Authority to manage certain Plan assets to the PSABMRT for both plans. The Plans are administered by the Pennsylvania State Association of Borough's Municipal Retirement Trust and are not considered Pension Trust Funds of the Borough of Irwin. Accordingly, these plans are not presented in the Borough's financial statements as Pension Trust Funds. As a result of the Borough's cash basis method of accounting, the new accounting and reporting model for pensions, GASB Statements 67 and 68 were not adopted. In the future, implementation of GASB 67 and 68 will require prior period adjustments and the effect could be material. Page 27 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 7: PENSION PLANS (CONTINUED) Plan Memberships As of December 31, 2023, the date of the most recent actuarial report, membership in the plans consisted of the following: Police Plan Employee Plan Active employees 6 3 Retirees and beneficiaries currently receiving benefits 2 7 Terminated employees entitled to benefits but not yet receiving them 3 10 Benefit Provisions The Plans pay benefits in the event of death, disability or retirement of participants who meet the eligibility requirements. Police Pension benefits are calculated as 50 percent of final monthly average salary averaged over the last 36 months of employment. Participants hired after June 1, 1998, also receive a service increment equal to $100 per month for service in excess of 25 years, up to a maximum of $500 per month. Killed in Service benefits are calculated at 50% of retirement benefit. Disability benefits are calculated as the greater of 50% of the members salary at the date of disability less Social Security disability benefit for the same injury or 50% of the final monthly average salary less Social Security disability benefit for the same injury. Employee pension benefits are calculated as 1.8 percent of compensation averaged over the last 36 months of employment, multiplied by years of credited service. Years of credited service are limited to a maximum of 25 years. Summary of Significant Accounting Policies 1. Basis of Accounting Both plans' statements have been prepared on the accrual basis of accounting. Contributions and pension payments are recognized in the period when they are due. 2. Valuation of Investments Plan investments are listed at fair value as reported by the PSABMRT. 3. Contributions Act 205 requires that annual contributions be based upon the Plan's minimum municipal obligation (MMO). The MMO is based upon the Plan's biennial actuarial valuation. Employees covered under the Employee Pension Plan are required to contribute 5.0 percent of covered payroll to the Plan, which is currently eliminated. The contribution is governed by the Plan's governing ordinances and collective bargaining. Active members may elect to contribute up to 10 percent of wages. Page 28 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 7: PENSION PLANS (CONTINUED) Employees covered under the Police Pension Plan are required to contribute 5.0 percent of covered payroll to the Plan. This contribution is governed by the Plan's governing ordinances and collective bargaining. Full-time employees are currently not required to contribute to the plan. Both plans may also be eligible to receive an allocation of state aid from the General Municipal Pension System State Aid Program which must be used for pension funding. Any funding requirements established by the MMO are excess of employee contributions and State Aid must be funded by the Borough. Administrative fees which may include, but are not limited to, investment management fees and actuarial services are charged to the Plan and funded through the MMO and/or Plan earnings. Contributions Required and Contributions Made The actuarial computed minimum municipal obligation of contributions required to the pension plans for 2023 was $65,061 for the Police Pension Plan and $20,258 for the Employee Pension Plan Actual contributions made for the year ended December 31, 2023, were as follows: Police Employee Pension Plan Pension Plan Employee $ $ 16,787 Borough of Irwin State 58,597 20,258 Total Contributions to the Plans $ 58.597 $ 37.045 Police Pension Plan Schedule of Funding Progress Actuarial Unfunded UAAL as a Accrued Liability Percentage Actual Value of (UAAL) AAL- Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (bla) (c) (b-a/c) 1/1/2011 $ 1,065,345 $ 1,143,393 $ 87,048 92.40% $ 124,323 70.00% 1/1/2013 927,083 1,081,218 154,135 85.70% 117,298 131.40% 1/1/2015 931,416 1,067,973 136,557 87.20% 153,393 89.02% 1/1/2017 969,084 1,213,588 244,504 79.90% 197,031 124.10% 1/1/2019 979,342 1,309,445 330,103 74.80% 223,530 147.70% 1/1/2021 1,203,390 1,072,019 (131,371) 112.30% 145,431 (90.30)% 1/1/2023 1,246,403 1,206,339 (40,064) 103.30% 410,322 (9.8)% Note: Cash value of life insurance is not reflected in Actuarial Value of Assets or Actuarial Accrued Liability Page 29 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 (CONTINUED) NOTE 7: PENSION PLANS (CONTINUED) Police Pension Plan Schedule of Contributions from Employer and Other Contributing Entities Year Ended Annual Required Percentage December 31, Contribution Contributed 2014 $ 36,984 112% 2015 59,870 100% 2016 60,371 100% 2017 63,089 100% 2018 78,028 100% 2019 85,602 100% 2020 98,872 100% 2021 106,956 100% 2022 53,751 100% 2023 58,597 100% Employee Pension Plan Schedule of Funding Progress Actuarial Unfunded UAAL as a Accrued Liability Percentage Actual Value of (UAAL) AAL- Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (bla) (c) (b-a/c) 1/1/2011 $ 444,325 $ 503,940 $ 59,705 88.20% $ 162,917 33.60% 1/1/2013 478,609 511,847 33,238 93.50% 190,599 17.40% 1/1/2015 570,796 548,736 (22,060) 104.00% 199,201 (11.10)% 1/1/2017 655,035 634,501 (20,534) 103.20% 174,978 (11.70)% 1/1/2019 657,203 658,631 1,428 99.80% 207,168 00.70% 1/1/2021 740,937 682,205 (58,732) 108.60% 251,215 (23.40)% 1/1/2023 693,276 723,543 30,267 95.8% 310,569 9.7% Page 30 BOROUGH OF IRWIN NOTES TO THE FINANCIAL STATEMENTS DECEMBER: 31, 2023 (CONTINUED) NOTE 7: PENSION PLANS (CONTINUED) Employee Pension Plan Schedule of Contributions from Employer and Other Contributing Entities Year Ended Annual Required Percentage December 31, Contribution Contributed 2013 $ 23,564 100% 2014 21,617 100% 2015 22,130 100% 2016 11,976 100% 2017 11,749 100% 2018 21,763 185% 2019 12,248 100% 2020 19,811 100% 2021 25,625 100% 2022 20,085 100% 2023 20,258 100% 4. Actuarial Valuations and Other Inputs Police Pension Plan Employee Pension Plan Actuarial valuation date January 1, 2023 January 1, 2023 Actuarial cost method Entry age normal Entry age normal Amortization method Level dollar, closed Level dollar, closed Remaining amortization period N/A 20 years Asset valuation method Market Value Market Value Actuarial assumptions: Investment rate of return 6.75 percent 6.75 percent Projected salary increases 4.50 percent 4.50 percent Includes inflation at 2.75 percent 2.75 percent Mortality rates were based on the PUBS-2010 Mortality projected to 2026 using MP-2020.. NOTE 8 SUBSEQUENT EVENTS Management has evaluated subsequent events through the report date, January 20, 2025. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. SUPPLEMENTARY INFORMATION Page 32 30ROUGH OF IRWIN SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CASHI BASIS BUDGET. AND ACTUAL - GENERAL FUND FOR THE YEARI ENDED DECEMBER 31, 2023 Variance With Final Budget Budgeted Amounts Actual Positive Original Final (Cash Basis) (Negative) Revenue: Taxes $ 1,419,600 $ 1,419,600 $ 1,512,632 $ 93,032 Licenses and Permits 94,300 94,300 84,529 (9,771) Fines and Forfeits 24,100 24,100 37,294 13,194 Interest, Rents and Royalties 21,150 21,150 32,589 11,439 Intergovernmental Revenues 113,751 113,751 76,625 (37,126) Charges for Services 2,444,377 2,444,377 2,594,573 150,196 Miscellaneous Revenues 171,500 171,500 20,200 (151,300) Total Revenue 4,288,778 4,288,778 4,358,442 69,664 Expenditures: General Government 701,709 701,709 467,252 234,457 Public Safety 671,534 671,534 803,144 (131,610) Public Works: Sanitation 1,504,650 1,504,650 1,517,994 (13,344) Highways and Streets 470,847 470,847 496,126 (25,279) Other Public' Works Enterprises 31,534 31,534 98,672 (67,138) Culture and Recreation 38,900 38,900 25,120 13,780 Insurance 184,800 184,800 105,396 79,404 Employer Paid Withholding Taxes and Unemployed Compensation 1,229 (1,229) Debt Service: Principal 150,000 (150,000) Interest 1,643 (1,643) Total Expenditures 3,603,974 3,603,974 3,666,576 (62,602) Excess Revenue Over Expenditures 684,804 684,804 691,866 7,062 Other Financing Sources (Uses): Refund of Prior Year Expenses 32,939 32,939 Proceeds of General Fixed Asset Disposition 38,938 38,938 TaxA Anticipation Note Proceeds 152,100 152,100 150,000 (2,100) Refund of Prior Year Revenues (1,000) (1,000) (50) 950 Operating Transfers In 112,667 112,667 Operating Transfers Out (531,703) (531,703) (919,277) (387,574) Total Other Financing Sources (Uses) (380,603) (380,603) (584,783) (204,180) Excess of Revenue and Other Financing Sources Over (Under) Expenditures and Other Uses 304,201 304,201 107,083 (197,118) Fund Balance, January 1, 2023 762,745 762,745 955,444 Fund Balance, December 31, 2023 $ 1,066,946 $ 1,066,946 $ 1,062,527 $ (197,118) Page 33 BOROUGH OF IRWIN SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CASH BASIS BUDGET. AND ACTUAL - LIQUID FUELS FUND FOR THE YEAR ENDED DECEMBER 31, 2023 Variance With Final Budget Budgeted Amounts Actual Positive Original Final (Cash Basis) (Negative) Revenue: Interest, Rents and Royalties $ 30 $ 30 $ 1,826 $ 1,796 Intergovernmental Revenues 122,396 122,396 124,022 1,626 Total Revenue 122,426 122,426 125,848 3,422 Expenditures: General Government 1,000 1,000 1,000 Public Works: Highways and Streets 122,396 122,396 137,093 (14,697) Total Expenditures 123,396 123,396 137,093 (13,697) Excess Expenditures Over Revenues (970) (970) (11,245) (10,275) Other Financing Sources (Uses): Operating Transfers In 14,441 14,441 Total Other Financing Sources (Uses) 14,441 14,441 Excess of Revenue and Other Financing Sources Over (Under) Expenditures and Other Uses (970) (970) 3,196 4,166 Fund Balance, January 1, 2023 94,371 94,371 1,002 (93,369) Fund Balance, December 31, 2023 $ 93,401 $ 93,401 $ 4,198 $ (89,203) A 2 Page 36 BOROUGH OF IRWIN STATEMENT OF NET POSITION - CASH BASIS PROPRIETARY FUNDS DECEMBER 31, 2023 H. Allshouse Civic Recreation Activities Sewer Project Fund Committee Fund Total Assets: Cash $ 60,989 $ 3,932 $ 242,273 $ 307,194 Total Assets 60,989 3,932 242,273 307,194 Net Position: Unrestricted 3,932 3,932 Restricted 60,989 242,273 303,262 Total Net Position $ 60,989 $ 3,932 $ 242,273 $ 307,194 Page 37 BOROUGHOF IRWIN STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - CASH BASIS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2023 H. Allshouse Civic Recreation Activities Sewer Project Fund Committee Fund Total Operating Revenue: Charges for Service $ $ 4,663 $ $ 4,663 Total Operating Revenues 4,663 4,663 Operating Expenses: General Government 430 430 Culture and Recreation 20,724 20,724 Public Works 5,217 5,217 Total Operating Expenses 21,154 5,217 26,371 Operating Income (Loss) (16,491) (5,217) (21,708) Nonoperating Revenue (Expenses): Interest 610 1,286 2,793 4,689 Operating Transfers In 308,960 308,960 Operating Transfers Out (351,202) (351,202) Total Nonoperating Revenue (Expenses) 610 1,286 (39,449) (37,553) Changes in Net Position 610 (15,205) (44,666) (59,261) Net Position, January 1, 2023 60,379 19,137 286,939 366,455 Net Position, December 31, 2023 $ 60,989 $ 3,932 $ 242,273 $ 307,194 Page 38 BOROUGH OF IRWIN COMBINED STATEMENT OF ASSETS, LIABILITIES, AND NET POSITION - CASH BASIS FIDUCIARY FUND TYPES DECEMBER 31, 2023 Employee Police Pension Fund Pension Fund Total Assets Investments $ 761,931 $ 1,431,727 / $ 2,193,658 Receivables 549 549 Total Assets 762,480 1,431,727 2,194,207 Net Position Held in Trust For Pension Benefits 762,480 1,431,727 2,194,207 Total Net Position $ 762,480 $ 1,431,727 $ 2,194,207 Page 39 BOROUGH OF IRWIN COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - CASH BASIS FIDUCIARY FUND TYPES FOR THE YEAR ENDED DECEMBER: 31, 2023 Employee Police Pension Fund Pension Fund Total Operating Revenues: Intergovernmental Revenues: State Shared Revenues $ 20,258 $ 65,061 $ 85,319 Other Revenues: Member Contributions 16,787 16,787 Municipal Contributions Total Revenues 37,045 65,061 102,106 Operating Expenses: Benefits 51,196 40,100 91,296 Administration Fees 11,448 14,748 26,196 Total Expenses 62,644 54,848 117,492 Operating Income (Loss) (25,599) 10,213 (15,386) Nonoperating Revenues (Loss): Interest 3,561 6,501 10,062 Dividends 8,620 15,765 24,385 Unrealized Gain (Loss) 82,622 152,845 235,467 Total Nonoperating Revenues (Loss) 94,803 175,111 269,914 Changes in Net Position 69,204 185,324 254,528 Net Position, January 1, 2023 $ 693,276 $ 1,246,403 $ 1,939,679 Net Position, December 31, 2023 $ 762,480 $ 1,431,727 $ 2,194,207