X hits on this document

776 views

0 shares

0 downloads

0 comments

77 / 171

CITY OF MYRTLE BEACH, SOUTH CAROLINA NOTES TO FINANCIAL STATEMENTS June 30, 2010

E. Debt Defeasance

On June 30, 2006, the City used a portion of the proceeds received in conjunction with the sale of its water and wastewater plant along with other resources to purchase U.S. government securities. These securities were deposited into an irrevocable trust to provide for all future debt service on the then outstanding waterworks and sewer system revenue bonds, series 2003 in the amount of $16,320,000. As a result, the waterworks and sewer system revenue bonds, series 2003 are considered defeased and the City has removed the liabilities from its accounts. The unmatured and outstanding principal balance on the defeased bonds at June 30, 2010 is $11,605,000.

On May 5, 2010, the City issued $9,820,000 in refunding certificates of participation, series 2010 with interest rates ranging from 2.5% to 4.0%. The City issued the refunding certificates of participation, series 2010 to advance refund $10,920,000 of the outstanding refunding certificates of participation, series 1998, with interest rates ranging from 3.6% to 5.0%. The City used the net proceeds along with other resources to purchase U.S. government securities. These securities were deposited in an irrevocable trust to provide for all future debt service on the refunding certificates of participation, series 1998. As a result, the refunding certificates of participation, series 1998 are considered defeased and the City has removed the liabilities from its accounts. The advance refunding reduced the City’s total debt service requirements by $554,292. This results in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $534,276. The unmatured and outstanding principal balance on the defeased bonds at June 30, 2010 is $10,920,000.

Note 13 - OPERATING LEASES

The City is the lessor of land under lease arrangements classified as operating leases. The leases expire in various years though the year 2020. At June 30, 2010, the cost and carrying amount of the land totals $100,000. Minimum future rentals to be received on the non-cancelable leases as of June 30, 2010 are shown below.

Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020

$

$

240,000 240,000 240,000 240,000 240,000 1,080,000 2,280,000

Minimum future rentals do not include contingent rentals that may be received under the land leases. Contingent rentals during the year ended June 30, 2010 amounted to $2,063,178. In accordance with an agreement entered into on May 5, 2004, the City is required to remit 75% of the proceeds from these leases to Horry County, South Carolina.

The City is also the lessor of a baseball stadium facility under a lease agreement, which is classified as an operating lease. The activity of the lease is accounted for in the Baseball Stadium Fund. The lease expires in 2018 and requires annual rental payments equal to 4.0% of adjusted gross revenues in excess of $3,250,000 on December 31 of each year. During the year ended June 30, 2010, rental income from this lease amounted to $29,471.

The following is an analysis of the property being leased by the Baseball Stadium Fund at June 30, 2010:

Land Land Improvements Buildings Equipment Accumulated Depreciation

$

$

5,600,000 680,000 7,858,273 928,535 (4,741,205) 10,325,603

  • -

    63 -

Document info
Document views776
Page views779
Page last viewedSun Dec 11 10:53:42 UTC 2016
Pages171
Paragraphs8630
Words35233

Comments