DEBT INFORMATION Legal Debt Limit Article V, Sec. 4 of the State Constitution provides, among other things, that no unit of local government may contract debts (debt being defined by the Constitution as the borrowing of money) secured by a pledge of its faith and credit in an amount exceeding two-thirds of the amount by which the unit's outstanding indebtedness shall have been reduced during the preceding fiscal year unless the debt is approved by a majority of the qualified voters of the unit who vote thereon at a referendum. In addition, The Local Government Bond Act, as amended, provides that, subject to certain exceptions, no bond order may be adopted by the governing body of a unit of local government unless it appears from the sworn statement of debt filed in connection therewith that the net debt of the unit does not exceed 8% of the appraised value of property subject to taxation by the issuing unit before the application of any assessment ratio. Said limitation does not apply to funding and refunding bonds, bonds issued for water, gas or electric power purposes, or two or more of such purposes, certain sanitary sewer, sewage disposal or sewage purification plant bonds, bonds or notes issued for erosion control purposes, and bonds or notes issued for the purposes of erecting jetties or other protection works to prevent encroachment by certain bodies of water. As of December 31, 1975, the City had the statutory capacity to incur additional debt in an amount exceeding $270,000,000. Tax Anticipation Notes Units of local government are authorized by the Constitution and Article 9, as amended, of Chapter 159 of the General Statutes of North Carolina to borrow money for the purpose of paying appropriations made for the current fiscal year in anticipation of the collection of taxes due and payable within the current fiscal year to an amount not exceeding 50% of such taxes uncollected as of the date of the proposed loan authorization. The City has not borrowed in anticipation of taxes since fiscal 1970. -Revenue Anticipation Notes Said Article 9, as amended, authorizes units of local government to borrow money for the purpose of paying appropriations made for the current fiscal year in the amount of receipts of revenues, other than taxes, estimated in its budget to be realized in cash during such fiscal year, and to issue negotiable notes in evidence thereof. A revenue anticipation note may not mature later than 30 days after the close of the fiscal year in which it is issued and may not be renewed beyond that time. No revenue anticipation loan may be made if the amount thereof, together with the amount of all revenue anticipation notes authorized or outstanding on the date the loan is authorized, would exceed 80% of the revenues of the issuing unit, other than taxes, estimated in its budget to be realized in cash during such fiscal year. The City has never issued such notes. Grant Anticipation Notes Said Article 9, as amended, authorizes units of local government to borrow money for the purpose of paying appropriations made for a capital project in anticipation of the receipt of moneys from grant commitments for such capital project from the State or the United States or any agencies of either, and to issue its negotiable notes in evidence thereof. Such note may not mature later than 12 months after the estimated completion date of such capital project and may be renewed from time to time, but no renewal shall mature later than 12 months after such estimated completion date. No such note may be issued if the amount thereof, together with the amount of all other notes authorized or issued in anticipation of the same grant commitment, shall exceed 90% of the unpaid amount of said grant commitment. The City has never issued such notes. 1974 $21,500,000 ($8 845,000 Street Bonds, Series A, $7.400,000 Sanitary Sewer Bonds, Series A, $3,100,000 Public Improvement Bonds, and $2,155,000 Water Bonds, Series A) 13.88 years average maturity, 4.9590% net interest cost. 1975 $26,000.000 ($9.535 000 Street Bonds, Series B, $6,250,000 Airport Bonds, $6,220,000 Sanitary Sewer, Series B, $3,845,000 Water Bonds, Series B and $150,000 Sidewalk Bonds) 12.99 years average maturity, 5.7190% net interest cost. Note: Outstanding Bonded Debt shown above does not include outstanding balance of $3,400,000 Airport Revenue Bonds, Series A, which are payable solely from net revenues of the Airport. Lease Purchase Agreements and Other Commitments The City is a party to the following lease purchase agreements: Lease purchase agreement between the City and Queens Properties, Inc., a North Carolina corporation, for the building utilized by the City-County Utility Department as office and administrative quarters. The lease commenced on October 1, 1973 and ends on November 30, 1999 or such earlier date as the City may have exercised its rights to prepay the purchase price in accordance with the terms of the agreement. The rent for the facility is $89,822.30 payable annually. Such rent is payable solely from revenues generated by the water and sewer system. The agreement was approved by the Local Government Commission in accordance with and under the provisions of Article 8, Chapter 159, of the General Statutes of North Carolina. If the City does not exercise its option to prepurchase the facility, the title to the facilities will be vested in the City at the end of the lease period. Lease purchase agreement between the City and McGuire Properties, Inc., a North Carolina corporation, for the lease of a 51⁄2 story parking garage facility. The term of the lease is for an eleven year period commencing on December 23, 1974, and ending on December 23, 1985. The annual rental for the parking garage facility is $250,300 payable from the City's Municipal Debt Service Fund. This agreement was approved by the Local Government Commission pursuant to and in accordance with Article 8, Chapter 159, of the General Statutes of North Carolina. An agreement between the City and the County dated January 17, 1972, consolidated and merged the separate water and sewer utility operations of the two governments into a single department to function on a countywide basis under the administrative direction of the City. As part of the agreement, the County leased all real and personal property used and owned by the County for water and sewer purposes to the City in consideration of the City's payment to the County of amounts on a semiannual basis equal to the County's outstanding net debt service cost for water and sewer general obligation bonds. The City's payment pursuant to such agreement for fiscal 1976 is $1,381,085 and, for fiscal years 1977 to 1997, inclusive, will average $1,373,175. Such amounts are payable from the revenues generated by the water and sewer system. Upon the payment of the debt service, the County is obligated to convey title to all real and personal property to the City. The City has entered into an agreement for the use of certain computer equipment. This agreement, which may be terminated by the City upon proper notice, requires payments of $272,000 for fiscal 1976, $341,000 in fiscal 1977 to 1981, inclusive, and $171,000 in fiscal 1982. Payments for fiscal 1975 were approximately $90,000. Such payments have been made from the City's General Fund. Certain developers have contracts with the City for construction of water and sewer lines. Under terms of these contracts, the developers are required to deposit with the City an amount equal to the estimated cost of constructing the lines, which lines when completed and accepted, become the property of the City. Refunds of deposits, which may be either wholly or partially refundable depending upon terms of the contracts, are based upon revenues collected from the use of the lines, and are paid principally over periods not exceeding fifteen years and twenty years for water and sewer lines, respectively. Refundable water and sewer construction deposits totaled $6,474,316 at June 30, 1975. Amounts to be refunded are not presently determinable as to the year of maturity. The City has entered into installment purchase contracts principally for privately-owned sewer systems acquired by annexation (see "The City-General Description") which totaled $3,132,269 at June 30, 1975. Such amounts are payable annually over a four-year period including interest based on semi-annual prime interest rates. Mecklenburg County Debt Fiscal year ended June 30, 1976 Assessed Valuation $6,837,951,526 as of January 12, 1976; Rate $.79 per $100; Outstanding Debt at December 31, 1975 $97,350,000; Population 1970 U. S. Census 354,656; Bonds Authorized and Unissued--None. On May 18, 1976, a referendum will be held in the County on the questions of issuing $10,000,000 County Hospital Bonds and $400,000 Ambulance Facilities Station Bonds. Note: The assessed property valuation as of January 12, 1976 for the County totaled $6,837,951,526, which includes the City's valuation of $4,436,863,417 resulting in a City/County ratio of approximately 65 percent. City Bonds Authorized and Unissued 67,283,000 12,733,000 80,016,000 2,661,807 2,661,807 69,944,807 12,733,000 82,677,807 $ 64,148,193 $50,544,500 $114,692,693 Approved by the voters at an election on September 2, 1972. Approved by the voters at an election on April 10, 1973. **Approved by the voters at a referendum on April 8, 1975. Offering of the remaining authorization has not been scheduled at this time. Miscellaneous Debt Information The City has not defaulted on the payment of any bonds or notes and has not issued any refunding bonds. |