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CITY OF LA PORTE, TEXAS <br />NOTES TO THE FINANCIAL STATEMENTS (continued) <br />Note 6 - Long-Term Debt <br />September 30, 2011 <br />During the year ended , the following changes occurred in long-term liabilities: <br />Long-term liabilities applicable to the City's governmental activities are not due and payable in the <br />current period and, accordingly, are not reported as fund liabilities in the governmental funds. <br />Compensated absences generally are paid by the General Fund for the governmental activities. Net <br />pension obligation is liquidated by the general fund. Interest on long-term debt is not accrued in <br />governmental funds, but rather is recognized as an expenditure when due. <br />General Obligation Bonds and Certificates of Obligations <br />General Obligation Bonds are direct obligations issued on a pledge of the general taxing power for the <br />payment of the debt obligations of the City. General Obligations Bonds and Certificates of Obligation <br />require the City to compute, at the time other taxes are levied, the rate of tax required to provide (in each <br />years bonds are outstanding) a fund to pay interest and principal at maturity. The City is in compliance <br />with this requirement. <br />42 <br /> <br />