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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2010
<br />financial statements for the Internal Revenue Code Section 401(k) plan that includes the Supplemental Retirement
<br />Income Plan for Law Enforcement Officers. That report may be obtained in writing to the Office of the State
<br />Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699 -1410, or by calling (919) 981 -5454.
<br />Funding Policy. Article 12E of G.S. Chapter 143 requires the County to contribute each month an amount equal to
<br />five percent of each law enforcement officer's salary, and all amounts contributed are vested immediately. Also, the
<br />law enforcement officers may make voluntary contributions to the plan. The County has chosen to extend this
<br />benefit to all its full and part-time (who are eligible for North Carolina Local Governmental Employees' Retirement
<br />System) employees. Contributions by Cabarrus County for the year ended June 30, 2010 were $2,546,419 which
<br />consisted of $1,865,012 from the County and $681,407 from the employees. In February 2009, the Alliance
<br />decided to discontinue the employer's contribution to the 401(k) plan. Participating Alliance employees made
<br />contributions of $300,870 for the year ended June 30, 2010.
<br />d. Register of Deeds' Supplemental Pension Fund
<br />Plan Description. Cabarrus County also contributes to the Registers of Deeds' Supplemental Pension Fund (Fund),
<br />a noncontributory, defined contribution plan administered by the North Carolina Department of State Treasurer. The
<br />Fund provides supplemental pension benefits to any eligible county register of deeds who is retired under the Local
<br />Government Employees' Retirement System (LGERS) or an equivalent locally sponsored plan. Article 3 of G. S.
<br />Chapter 161 assigns the authority to establish and amend benefit provisions to the North Carolina General
<br />Assembly. The Register of Deeds' Supplemental Pension Fund is included in the Comprehensive Annual Financial
<br />Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required
<br />supplementary information for the Registers of Deeds' Supplemental Pension Fund. That report may be obtained
<br />by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699 -1410, or by
<br />calling (919) 981 -5454.
<br />Funding Policy. On a monthly basis, the County remits to the Department of State Treasurer an amount equal to
<br />one and one -half percent (1.5 %) of the monthly receipts collected pursuant to Article 3 of G.S. 161. Immediately
<br />following January 1 of each year, the Department of State Treasurer divides ninety -three percent (93 %) of the
<br />amount in the Fund at the end of the preceding calendar year into equal shares to be disbursed as monthly
<br />benefits. The remaining seven percent (7 %) of the Fund's assets may be used by the State Treasurer in
<br />administering the Fund. For the fiscal year ended June 30, 2010, the County's required and actual contributions
<br />were $15,419.
<br />8. Special Item
<br />On December 31, 2009, the Cabarrus Health Alliance sold its home health services to an unrelated third party for
<br />$3 million. The Alliance has received $2.5 million and the balance of the proceeds was placed in an escrow
<br />account in the name of the agency's law firm until all business and financial proceedings are finalized. The sale
<br />proceeds of $3 million included $228,477 allocated to the capital assets of the home health services. These capital
<br />assets had a net book value of $140,892 upon disposition. The gain recognized under full accrual related to this
<br />special item is $2,859,108.
<br />9. Effects of Subsequent Events
<br />On September 22, 2010, the County refinanced all of the callable 2001 Certificates of Participation debt. The
<br />savings over the remaining 11 years totals $2,366,350 or 10.47 %. The overall yield is now 2.390 %. Rates have not
<br />been this low since May of 1967. The County will experience this savings over the next 10 years at an amount of
<br />approximately $235,000 per year.
<br />On October 5, 2010, the County had two applications with the Local Government Commission for approval of a
<br />refinancing in an amount not to exceed $45,000,000 and Qualified School Construction Bonds (QSCB) in an
<br />amount of $14,637,160. The County intends to refund $34,395,000 of the callable 2002/2003 Certificates of
<br />Participation when market conditions are favorable. The QSCB's will be placed with BB &T with a 5 year deferral of
<br />principal and an estimated term of 14 years and zero interest. These bonds will be sold when the fed rate is equal
<br />to or less than the BB &T loan rate.
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