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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2012
<br />For governmental activities, compensated absences, OPEB and unfunded pension cost are liquidated by the
<br />general fund. For business-type activities, compensated absences and OPEB are liquidated by the business-type
<br />activity. Compensated absences are accounted for on the LIFO basis, assuming employees are taking leave time
<br />as it is earned.
<br />5. Capital Assets, Net of Related Debt
<br />Governmental Activity capital assets, net of related debt at June 30, 2012, are computed as follows:
<br />Capital assets, net of accumulated depreciation$217,058,330
<br />Less: capital debt
<br />Gross debt(389,480,648)
<br />School debt related to assets to which the County does not capitalize296,402,561
<br />Unspent debt proceeds, non school related debt59(93,078,028)
<br />Capital assets, net of related debt$123,980,302
<br />6.Advance Refundings
<br />On March 15, 2004, the County issued $32,855,000 of general obligation advance refunding revenue bonds to
<br />provide resources to purchase U.S. government securities that were placed into an irrevocable trust for the purpose
<br />of generating resources for all future debt service payments of refunded debt. The refunded debt consists of the
<br />County’s series 1997 School Bonds dated February 1, 1997 and stated to mature on February 1 in the years 2008
<br />to 2018 inclusive. The refunding debt was issued at a net interest cost of 3.276524%. As a result, the refunded
<br />bonds are considered to be defeased and the liability has been removed from the Governmental activities column
<br />of the statement of net assets. The amount of defeased debt that remains outstanding as of June 30, 2011, is $0.
<br />This advance refunding was undertaken to reduce total debt service payments over the following 14 years by
<br />$1,588,396 and resulted in an economic loss of $436,981. As required by GASB Statement 23, the difference
<br />between the reacquisition price and the net carrying amount of the old (refunded) bonds was deferred by
<br />$3,756,746 and amortized as a component of interest expense over the remaining life of the refunding bonds. The
<br />unamortized deferred amount as of June 30, 2012 was $1,507,196.
<br />On January 31, 2008, the Cabarrus County Development Corporation issued Refunding Certificates of
<br />Participation, Series 2008B in the aggregate principal amount of $18,745,000. A portion of the proceeds of the
<br />2008B Certificates are to be applied to advance refund the Refunded Obligations. The refunded debt consists of
<br />the County’s series 1999 Installment Payment Revenue Bonds dated June 16, 1999 and stated to mature on June
<br />30, 2019. The refunding debt was issued at a net interest cost of 3.241996%. As a result, the refunded bonds are
<br />considered to be defeased and the liability has been removed from the Governmental activities column of the
<br />statement of net assets. The amount of defeased debt that remains outstanding as of June 30, 2011 is $0. This
<br />advance refunding was undertaken to reduce total debt service payments over the following 11 years by
<br />$1,143,169 and resulted in an economic gain of $428,256. As required by GASB Statement 23, the difference
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