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Page Four November 30, 1987 Mr. Bennett & Water Commissioners who in turn remitted the funds to Watson Electrical Company. The amount of the damages paid to Watson Electrical company was $60,000. If you will refer to the audit report for the fiscal year ended June 30, 1980, the Statement of Cash Receipts and Disbursements, you will see that there is a cash receipt for damages settlements for $60,000 and there is also a cash disbursement for damages settlement for $60,000. This was a wash transaction with the Rocky River Fund serving only as a pass through agency for the settlement funds. Neither cabarrus County nor any of the other local participants in any way shared any costs connected with the settlement of the lawsuits. Question: Discuss the disposition of the fund balance which accumulated in the Rocky River Fund over the life of the project. Response: As you will see from the table, shown as Exhibit A, except for the first two years of the Rocky River project, fiscal year ended June 30, 1976 and 1977, the Rocky River Fund carried a net receivable from Cabarrus County. Over the same period of time, the Rocky River Fund owed money to the city of Concord. This is due to the fact that the Board of Light and Water Commissioners found it necessary to advance large sums of money to the Rocky River Fund in order that all contractor payments be made on time. This is in addition to other short term borrowings and the grant anticipation notes discused earlier. As recommended by Dixon, Odom & Co., the available funds in the Rocky Ri,;er Fund should have been repaid to the Board of Light & Water Commissioners much earlier than they were. Had the payable to the Board of Light & Water Commissioners from the Rocky River Fund been repaid as soon as cash was available in the Fund to make repayment, no fund balance would have ever accumulated. Consequently, the Board of Light & Water Commissioners would have had their money available for investment and earnings. The net effect is that the Board's money accumulated earnings in the Rocky River Fund. In addition, please note that as shown on the accompanying schedule, the County has had an average balance payable to the Rocky River Fund of $113,878 for eleven years. The Fund has never made any attempt to charge the County interest on these amounts. Question: Is the sales tax allocation proper and was Cabarrus County given full credit for all sales tax related to the total interceptor sewer project?