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Cabarrus County, North Carolina Notes to the Financial Statements For the Year Ended June 30, 2011 been granted, but the County cannot predict whether its appeal ultimately will be successful or, even if its appeal were to be successful, whether it would prevail if these cases were remanded to the trial court. In a separate lawsuit currently pending in Cabarrus County Superior Court but stayed by court order pending the outcome of the above cases, certain developers have demanded that the County refund all fees paid by the plaintiffs pursuant to the APFO, including but not limited to VMPs. Although the County has a number of defenses to such claims, including the fact that each developer agreed to pay the VMP in order to proceed immediately with their projects, if the County does not prevail in this lawsuit, the County cannot predict whether it will be required to refund all or a portion of the approximately $7.5 million in VMPs collected since the adoption of the APFO, plus interest, to the affected developers and other interested parties. Although the County has not expressly budgeted funds to make this payment, a portion of the County's current undesignated fund balance could be used if such a payment were necessary. The County does not believe that use of such undesignated fund balance monies would have a material adverse impact on its condition, financial or otherwise. 3. Joint Ventures The County participates in a joint venture to operate Piedmont Behavioral Health (PBH) with four other local governments. Each participating government appoints four board members to the twenty- member board. The County has an ongoing financial responsibility for the joint venture because PBH's continued existence depends on the participating governments' continued funding. None of the participating governments have any equity interest in PBH, so no equity interest has been reflected in the financial statements at June 30, 2011. In accordance with the intergovernmental agreement between the participating governments, the County appropriated $614,021 to PBH to supplement its activities. Complete financial statements for PBH can be obtained from PBH's offices at 245 LePhillip Court, Concord, NC 28025. The County, in conjunction with the State of North Carolina, Rowan Cabarrus Community College and Rowan County participates in a joint venture to operate the Rowan Cabarrus Community College. Each of the four participants, except the County who only appoints two members, appoints four members of the fifteen - member board of trustees of the community college. The president of the community college's student government serves as an ex- officio nonvoting member of the community college's board of trustees. The community college is included as a component unit of the State. The County has the basic responsibility for providing funding for the facilities of the community college and also provides some financial support for the community college's operations. In addition to providing annual appropriations for the facilities, the County periodically issues general obligation bonds to provide financing for new and restructured facilities. Of the 2003 Refunded general obligation bonds issued, $12,405 in debt is still outstanding. Of the 2006 General Obligation bonds issued, $2,764,167 in debt is still outstanding. In March 2005, the County issued installment financing for the up fit of the old school administration building which will house the new RCCC Business Center. The total financed cost of the up fit totaled $4,358,000. The County has leased this facility to RCCC for $1 per year. At fiscal year end $622,571 in debt is still outstanding. The County has an ongoing financial responsibility for the community college because of the statutory responsibilities to provide funding for the community college's facilities. The County contributed $1,852,210 to the community college for operating purposes and $150,000 for capital outlay during the fiscal year ended June 30, 2011. In addition, the County made debt service payments of $898,539 during the fiscal year on general obligation bonds and installment financing issued for community college capital facilities. The participating governments do not have any equity interest in the joint venture; therefore, no equity interest has been reflected in the County's financial statements at June 30, 2011. Complete financial statements for the community college may be obtained from the community college's administrative offices at 1 -85 at Jake Alexander Boulevard South, Salisbury, NC 28145. 4. Jointly Governed Organization The County in conjunction with the Cities of Concord and Kannapolis and the Towns of Harrisburg and Mount Pleasant organized the Water and Sewer Authority of Cabarrus County in order to operate and maintain a regional interceptor sewer system and wastewater treatment system. Although not a user of the wastewater treatment services, the County is a related party by virtue of joint governance of the Water and Sewer Authority of Cabarrus County. Cabarrus County in conjunction with Rowan County have organized the Carolina Governmental Alliance to establish an excess liability, property and workers compensation deductible fund for member agencies and 68 Attachment number 1 1 -3 Page 190