Item 4D: Resolution Acknowledging Receipt of CAFR

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J)Noncurrent Liabilities, continued Notes Payable, continued The ODEQ note in governmental activities will be repaid from system development receipts collected in the System Development Capital Projects Fund. The ODEQ note includes a coverage requirement to maintain sewer rates sufficient to generate net revenues that maintain a debt service coverage factor of 1.05. At June 30, 2007, the coverage factor for the Barger- Greenhill Pump Station and Force Main note was 3.88. Assessment Deferral Loans The City of Eugene has entered into loan agreements under the Oregon Department of Environmental Quality Assessment Deferral Loan Program. Under this program, deferral loans are granted to assist property owners who will experience extreme financial hardship from payment of mandated sewer assessments. Each sewer assessment deferral is evidenced by a contract between the City and the property owner. The sewer assessment deferral loans are repaid to the ODEQ in quarterly installments equaling the amounts collected from the qualifying property owners. As of June 30, 2007, the City has drawn advances of $632,311 from the ODEQ for purposes of deferring sewer assessments, of which $619,864 had been repaid by year-end. ODEQ . assessment deferral loans are liabilities of the Special Assessment Management Special Revenue Fund Rebatable Arbitrage The City rebates interest earned on arbitrage as required by the federal tax code. Arbitrage reviews are performed periodically on all City tax-exempt bonds and obligations, and material liabilities are recorded in proprietary funds when incurred. The City had an estimated rebatable arbitrage of $291,102 at June 30, 2007 which will be liquidated when due with existing reserves, accumulated from excess interest revenues in the General Capital Projects Fund and the Library Debt Service Fund. Compensated Absences At June 30, 2007, the City had compensated absences of $7,896,587 included in governmental activities. The General Fund, internal service funds, and other governmental funds are typically used to liquidate these liabilities. Internal Service Fund Debt Based on an analysis of billings, governmental activities have been determined to be the predominant source of revenue for all internal service funds. Therefore, noncurrent liabilities in governmental activities include those in internal service funds. As of June 30, 2007, internal service fund debt included the Atrium Obligations of $1,650,000, Limited Tax Pension Bonds of $63,952,884, deferred bond discounts net of premiums of $158,290, and $883,071 in compensated absences. continued êì