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<br />CITY OF LA PORTE, TEXAS
<br />Notes to the Financial Statements
<br />September 30,2008
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<br />5. Long Term Liabilities - Continued
<br />
<br />Changes in Outstanding Debt -
<br />Transactions for the year ended September 30, 2008 are summarized as follows:
<br />
<br /> Balance Issues Balance
<br /> October 1 , or Payments or September 30, Due within
<br /> 2007 Additions Expenditures 2008 one year
<br />Governmental Type Activities
<br />General Obligation Bonds $ 16,930,000 $ $ 865,000 $ 16,065,000 $ 875,000
<br />Certificates of Obligation 24,055,000 790,000 23,265,000 820,000
<br />Premium on debt issues 326,022 12,009 314,013
<br />Compensated Absences 2,798,476 172,252 119,441 2,851,287 149,000
<br />Arbitrage Allowance 304,474 304,474
<br />Total governmental type activities 44,109,498 476,726 1,786,450 42,799,774 1,844,000
<br />Business Type Activities
<br />Revenue Bonds Payable 5,845,000 610,000 5,235,000 630,000
<br />Public Property Finance
<br />Contractual Obligation 2,362,500 262,500 2,100,000 262,500
<br />Com pensated absences 399,842 31,494 22,255 409,081 30,000
<br />Total business type activities 8,607,342 31,494 894,755 7,744,081 922,500
<br />Total of all activities $ 52,716,840 $ 508,220 $ 2,681,205 $ 50,543,855 $ 2,766,500
<br />General Obligation Bonds and Certificates of Obligation -
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<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 with
<br />this requirement.
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<br />Arbitrage provisions of the Internal Revenue Tax Act of 1986 require the City to rebate excess arbitrage
<br />earnings from bond proceeds to the federal government. Although the city has not incurred any liability for
<br />arbitrage, an allowance has been created as a safe harbor in anticipation of future rebate calculations. As
<br />provided for by the bond indentures, this amount has been recorded as a liability in the governmental
<br />activities for the benefit of the federal government and will be paid as required by applicable regulations.
<br />
<br />Certain General Obligation Bonds and Certificate of Obligations Bonds are to be repaid by revenues of the
<br />proprietary funds.
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<br />Also, for the governmental activities, compensated absences are generally liquidated by the general fund
<br />and for business-type, compensated absences are paid from the utility fund.
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