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CITY OF EUGENE, OREGON <br />Notes to Basic.Financial Statements <br />(5) Other Information, continued <br />(E) Continaencies <br />The City is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its <br />operations. Claims covered by the City's self-insurance internal service fund are reviewed and losses are <br />accrued based upon the judgment of City management. Based upon the advice of legal counsel with respect to <br />such litigation and claims, City management cannot determine what effect the ultimate disposition of these <br />matters will have on the financial position or results of operations of City funds. <br />(F) Outstandina Encumbrances <br />At June 30, 2008, the City has encumbered the following significant commitments: <br />Fund Amount <br />General $ 2,184,904 <br />Community Development Special Revenue 285,401 <br />General Capital Projects 1,526,157 <br />Road Capital Projects 51,810 <br />Systems Development Capital Projects 1,370,310 <br />Municipal Airport 2,889,731 <br />Parking Services 274,875 <br />Stormwater Utility 1,255,241 <br />Wastewater Utility 1,941,857 <br />Internal service funds 907,058 <br />Other governmental funds 1,092,735 <br />Total outstanding encumbrances $ 13,780,079 <br />(G) Subseauent Events <br />In July 2008, the Urban Renewal Agency (URA) entered into a contract with BEAM Development for the <br />renovation of the historic Centre Court building in downtown Eugene. To assist with the redevelopment, the <br />City borrowed $2,706,000 from the U.S. Department of Housing and Urban Development (HUD) to help finance <br />the project. The City and the URA entered- into an intergovernmental agreement in which the City would loan <br />the URA the proceeds from the HUD loan and the URA would repay the City. <br />In October 2008, the City issued $5,600,000 in General Obligation Bonds to refinance a portion of the General <br />Obligation Bond and Revolving Credit Facility obligation. <br />The City's investment in the Local Government Investment Pool through the Oregon Short-Term Fund (OSTF) <br />has exposure to the current crisis in the world's financial market, in particular the bankruptcy filing by Lehman <br />Brothers Holdings, Inc. The OSTF has exposure to Lehman bonds representing about 2% of the total fund. <br />The OSTF expects to amortize the Lehman bonds at a recovery value to their respective maturity dates based. <br />on current expected recovery information, resulting in a rate reduction .adjustment to the OSTF. The OSTF <br />expects to adjust rates based on general market conditions. <br />continued <br />75 <br />