FY 2008 Comprehensive Annual Financial Report

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (I) Noncurrent Liabilities, continued Notes Payable The City issues notes to finance major construction projects in governmental and business-type activities. The Oregon Department of Environmental Quality (ODEO) note pays interest at 4.07% and is secured by a pledge of available net sewer revenues. Governmental activities Notes payable:. Oregon Department of Environmental Quality - Barger-Greenhill Pump Station and Force Main Loan Interest .Ending amount rate balance $ 2,962,344 4.070% 513,838 Annual debt service requirements to maturity for notes payable are as follows: Governmental activites Fiscal year ending June 30 Principal Interest 2009 $ 339,520 17,069 2010 174,318 3,112 $ 513,838 20,181 The ODEO 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, 2008, 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, 2008, the City's advances of $632,311 had been paid off in full continued 65