C.A.F.R., FY 2005-06 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2006 V. Other Information (Continued) C. Water Storage Commitments (Continued) Allocated cost for future water storage (60%) is $1,925,722 and the amount to be paid including accumulated interest mentioned below is to be on a pro rata basis as more storage is acquired by the City. Interest at 3.137% has been accumulating on this allocated cost since September 30, 1977, and amounts to $2,815,064 at September 30, 2006. The City may, at its option, pay the interest as it becomes due or allow the interest to continue to accumulate until the storage is used. D. Water Sales The City has contracts extending for several years to sell treated and untreated water to five entities. Total water sales under these contracts to these entities during the year ended September 30, 2006, were approximately $2,896,000. E. Civic Center Contract The City is a party to a contract with the Chamber of Commerce of Lamar County, Inc. whereby three-sevenths of the hotel/motel tax is to be dedicated to a fund to be used for improving, enlarging, equipping, repairing, operating, or maintaining a civic center. The contract provides that the Chamber of Commerce of Lamar County, Inc. will operate the civic center through September 30,2006, and may be automatically extended for four additional one-year terms ending September 30, 2010. Either party may terminate this contract at the end of the current term by giving thirty days notice in advance of the automatic renewal. F. Contingent Liabilities and Commitments Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. In the past, the City operated a landfill, which was closed several years ago however, the property is still owned. The City is responsible for post-closure care and maintenance, which is not expected to be significant for any future year. Post-closure care is an estimate and subject to changes resulting from inflation, deflation, technology, and changes in applicable laws and regulations. PEDC had no outstanding incentive agreements related to economic development except the one related to a note receivable (Note IV.B.). 47