C.A.F.R., FY 2006-07 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2007 V. Other Information (Continued) B. Related Party The City Council appoints the governing board of an entity which is legally separate from the City. The City is not able to impose its will on this entity, and a financial benefit/burden relationship is not present; therefore, it is considered a related organization. C. Water Storage Commitments A contract with the United States of America for water storage space in Pat Mayse Lake entitles the City to utilize one hundred percent of the storage space between elevations 451.0 and 415.0 feet above sea level. Forty percent (43,800 acre-feet) is for present storage .and the remaining sixty percent (65,800 acre-feet) is for future water storage. The City is to repay the government the entire amount of construction costs allocated to the water storage right acquired by the City. The City is obligated to pay 9.46% of the ordinary operation and maintenance cost of the project annually and 4.22% of major capital replacements when incurred. 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. The City has been advised than an offer to purchase the remaining storage has been approved as part of the Water Resources Development Act. For a payment of $3,461,432 including interest, the City will acquire the remaining storage rights. The City expects to fund this acquisition from unused bond proceeds and assets accumulated for this purpose. 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, 2007, were approximately $3,190,000. 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 hoteUmotel 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, 2007, and may be automatically extended for 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. 47