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<br />-45- <br />NOTE 10 – COMMITMENTS AND CONTINGENCIES (CONTINUED) <br /> <br />E. Lake Johanna Volunteer Fire Department, Inc. <br /> <br />The City receives fire protection under a contract with the Lake Johanna Volunteer Fire Department, Inc . <br />The contract calls for annual payments and expires December 31, 2023, with an extension option through <br />December 31, 2038. The contract cost will be based on the budget submitted by the fire department and <br />approved by the City. Capital costs are billed separately in addition to the contract rate. The amount <br />expended under the contract was $573,680 in 2019. <br /> <br /> <br />NOTE 11 – CONDUIT DEBT OBLIGATION <br /> <br />The City has issued private activity bonds to provide financial assistance to private sector entities for the <br />acquisition and construction of industrial and commercial facilities deemed to be in the public interest. <br />The bonds constitute special obligations of the City, payable solely from revenues of the projects pledged <br />to the payment thereof. The bonds do not constitute a debt of the City and the City has no obligation for <br />repayment. Accordingly, the bonds are not reported as liabilities in the City’s financial statements. Bonds <br />outstanding at December 31, 2019 are as follows: <br /> <br />Amount <br />Bond Description Outstanding <br />Commercial Facilities Revenue Note, Series 2008 Office facilities 3,203,363$ <br />Housing Facility Revenue Note, Series 2011A Senior housing 8,257,764 <br />Housing Facility Revenue Note, Series 2011B Senior housing 8,257,764 <br />Housing Facility Revenue Note, Series 2012A Senior housing 8,257,764 <br />Housing Facility Revenue Note, Series 2012B Senior housing 1,645,575 <br />Housing Facility Revenue Note, Series 2015 Senior housing 8,988,332 <br />Total 38,610,562$ <br /> <br /> <br />NOTE 14 – SUBSEQUENT EVENTS <br /> <br />Investment Fair Values – The City generally reports its investments at fair value based on standards <br />described earlier in these notes. Subsequent to year-end, the novel coronavirus (COVID-19) pandemic has <br />caused significant volatility in economic conditions, including substantial reductions in the quoted <br />active-market prices of some investments. The City’s portfolio consists primarily of shorter-term <br />investments, many with guaranteed maturity values. The City does not expect any losses ultimately <br />realized from this market decline to be material. However, the potential negative impact could be <br />heightened if increased demand on City resources and/or a sustained economic downturn hampers the <br />City’s ability to hold such investments to maturity as planned. The potential future impact of these <br />conditions on the fair value of the City’s investment portfolio is not determinable at this time.