C.A.F.R., FY 2011-12 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2012 V. Other Information (Continued) D. Water Sales The City has contracts extending for several years to sell treated and untreated water to six entities. Total water sales under these contracts to these entities during the year ended September 30, 2012, were approximately $3,449,000. 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, 2012, and may be reviewed for four additional one year terms upon written agreement of the parties. Either party may terminate this contract at the end of the current term by giving thirty days notice. F. Contingent Liabilities, Commitments and Subsequent Events 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 akeady 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. Subsequent to September 30, 2012, the City Council approved an ordinance which establishes payment obligations to the Sulphur River Regional Mobility Authority. The City's payments are to assist in funding completion of approximately 10.4 miles of four-lane divided highway in Delta County, Texas. Annual payments of $100,827 include principal and interest at 3.68% beginning March 29, 2013, through March 29, 2032. The City is required to establish a sinking fund and to levy and collect ad valorem tax. In addition, the City Council approved two ordinances authorizing the issuance of General Obligation Refunding Bonds, Series 2012 not exceed $4,750,000, to defease Combination Tax and Revenue Certificates of Obligation, Series 2002 and General Obligation Refunding Bonds, Series 2003 and Combination Tax and Surplus Revenue Certificates of Obligation, Series 2013, not to exceed $2,900,000 for water line replacements and related costs. The ordinances also require the levy of ad valorem tax sufficient to pay the interest and principal as they become due and contain a pledge of the surplus net revenues of the water and sewer systems. 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. Management has evaluated subsequent events through the date of the report, the date on which the financial statements were available to be issued. 46