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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2010
<br />5. Capital Assets, Net of Related Debt
<br />Governmental Activity capital assets, net of related debt at June 30, 2010, are computed as follows:
<br />Capital assets, net of accumulated depreciation $ 219,001,854
<br />Less: capital debt
<br />Gross debt 432,996,785
<br />Less:
<br />School debt related to assets to which the County does not capitalize (316,147,431)
<br />Net capital debt 110,090.761
<br />Capital assets, net of related debt $ 108 911 093
<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, 2010, 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, 2010 was $2,047,088.
<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, 2010 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
<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, 2010 was $748,192.
<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, 2010, there were two series of industrial revenue bonds outstanding, with an
<br />aggregate principal amount of $14,200,000.
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