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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2012
<br />between the reacquisition price and the net carrying amount of the old (refunded) bonds was deferred by $958,846
<br />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 $573,858.
<br />On September 22, 2010 the Cabarrus County Development Corporation issued $18,920,000 of refunding
<br />Certificates of Participation to provide resources to purchase U.S. government securities that were placed into an
<br />irrevocable trust for the purpose of generating resources for all future debt service payments of refunded debt. The
<br />refunded debt consists of the County's series 2001 Certificates of Participation (COPS) dated March 1, 2001 and
<br />stated to mature on April 1st in the years 2001 through 2021. The refunding debt was issued at a net interest cost
<br />of 2.449267 %. As a result, the refunded bonds are considered to be defeased and the liability has been removed
<br />from the Governmental activities column of the statement of net assets. The amount of defeased debt that remains
<br />outstanding as of June 30, 2011 is $0. This refunding was undertaken to reduce total debt service payments over
<br />the following 11 years by approximately $215,123 annually and resulted in total cash flow savings of $2,366,350
<br />which on a net present value basis is $261,808 (.1794089% of the bonds refunded). As required by GASB
<br />Statement 23, the difference between the reacquisition price and the net carrying amount of the old (refunded)
<br />bonds was deferred by $902,811 and amortized as a component of interest expense over the remaining life of the
<br />refunding bonds. The unamortized deferred amount as of June 30, 2012 was $738,666.
<br />On August 31, 2011 the Cabarrus County Development Corporation issued $11,735,000 of refunding Limited
<br />Obligation Bonds (LOBS) to provide resources to purchase U.S. government securities that were placed into an
<br />irrevocable trust of the purpose of generating resources for all future debt service payments of refunded debt. The
<br />refunded debt consists of a portion of the County's series 2002 Certificates of Participation (COPS) dated August
<br />15, 2002 and stated to mature on February 1, 2022. The refunding debt was issued at a net interest cost of
<br />2.810781%. As a result, the refunded bonds are considered to be defeased and the liability has been removed
<br />from the Government activities column of the statement of net assets. The amount of defeased debt that remains
<br />outstanding as of June 30, 2012 is $11,970,000. This refunding was undertaken to reduce total debt service
<br />payments over the following 11 years by $971,244 resulted in a present value cash flow savings of $850,233. As
<br />required by GASB Statement 23, the difference between the reacquisition price and the net carrying amount of the
<br />old (refunded) bonds was deferred by $734,611 and amortized as a component of interest expense over the
<br />remaining life of the refunding bonds. The unamortized deferred amount as of June 30, 2012 was $667,830.
<br />On August 31, 2011 the Cabarrus County Development Corporation issued $21,780,000 of refunding Limited
<br />Obligation Bonds (LOBS) to provide resources to purchase U.S. government securities that were placed into an
<br />irrevocable trust of the purpose of generating resources for all future debt service payments of refunded debt. The
<br />refunded debt consists of a portion ($22,425,000) of the County's series 2003 Certificates of Participation (COPS)
<br />dated July 15, 2003 and stated to mature on February 1, 2024. The refunding debt was issued at a net interest
<br />cost of 3.214133 %. As a result, the refunded bonds are considered to be defeased and the liability has been
<br />removed from the Governmental activities column of the statement of net assets. The amount of defeased debt
<br />that remains outstanding as of June 30, 2012 is $22,425,000. This refunding was undertaken to reduce total debt
<br />service payments over the following 13 years by 1,006,031 resulted in a present value cash flow savings of
<br />$846,417. As required by GASB Statement 23, the difference between the reacquisition price and the net carrying
<br />amount of the old (refunded) bonds was deferred by $1,752,985 and amortized as a component of interest expense
<br />over the remaining life of the refunding bonds. The unamortized deferred amount as of June 30, 2012 was
<br />$1,618,140.
<br />K. Conduit Debt Obligations
<br />Cabarrus County Industrial Facility and Pollution Control Authority has issued industrial revenue bonds to provide
<br />financial assistance to private businesses for economic development purposes. These bonds are secured by the
<br />properties financed as well as by letters of credit and are payable solely from payments received from the private
<br />businesses involved. Ownership of the acquired facilities is in the name of the private business served by the bond
<br />issuance. Neither the County, the Authority, the State, nor any political subdivision thereof is obligated in any
<br />manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying
<br />financial statements. As of June 30, 2012, there were one series of industrial revenue bond outstanding, with an
<br />aggregate principal amount of $6,500,000.
<br />63 Attachment number 1
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