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Cabarrus County, North Carolina <br />Notes to the Financial Statements <br />For the Year Ended June 30, 2012 <br />On July 1, 2011 the County entered into a lease agreement as lessee for financing the acquisition of 911 <br />Equipment. Payments consist of $136,623 annually with an effective rate of 3.00 %. This lease agreement <br />qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of <br />their future minimum lease payments as of the date of inception. <br />The assets acquired through a capital lease are as follows: <br />Governmental <br />Activities <br />County owned Asset: <br />Equipment $ 603,312 <br />Land 3,421,394 <br />Less: Accumulated depreciation (4,058) <br />Total $ 4.020.648 <br />The future minimum lease obligation and the net present value of these minimum lease payments as of June <br />30, 2012, were as follows: <br />2. Operating Leases <br />The County leases building, equipment and office facilities under non - cancelable operating leases. Total costs <br />for the leases were $971,227 for the year ended June 30, 2012. The future minimum lease payments for this <br />lease are as follows: <br />Year Ending June 30 <br />Governmental <br />Year Ending June 30 <br />Activities <br />2013 <br />$ 326,623 <br />2014 <br />326,623 <br />2015 <br />326,623 <br />2016 <br />326,623 <br />2017 <br />190,000 <br />2018 <br />190,000 <br />2019 <br />190,000 <br />2020 <br />190,000 <br />2021 <br />190,000 <br />Next 5 Years <br />950,000 <br />To Maturity <br />2,280,000 <br />Total minimum lease payments <br />5,486,492 <br />Less: amount representing interest <br />(1,955,385) <br />Present value of minimum lease payments <br />$3.531.107 <br />2. Operating Leases <br />The County leases building, equipment and office facilities under non - cancelable operating leases. Total costs <br />for the leases were $971,227 for the year ended June 30, 2012. The future minimum lease payments for this <br />lease are as follows: <br />Year Ending June 30 <br />Amount <br />2013 <br />$ 1,996,638 <br />2014 <br />1,086,221 <br />2015 <br />983,386 <br />2016 <br />983,386 <br />2017 <br />901,437 <br />Total <br />$ 5,951,068 <br />J. Long -term Obligations <br />1. General Obligation Indebtedness <br />General obligation bonds are issued to provide funding for the construction of capital facilities used for general <br />government activities. All general obligation bonds are collateralized by the full faith, credit, and taxing power of <br />57 Attachment number 1 <br />1 -3 Page 313 <br />