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HUDSON CITY SCHOOL DISTRICT
                   SUMMIT COUNTY, OHIO

             NOTES TO THE BASIC FINANCIAL STATEMENTS
               FOR THE FISCAL YEAR ENDED JUNE 30, 2016

NOTE 8 - LONG-TERM OBLIGATIONS - (Continued)

C. Principal and interest requirements to retire the certificates of participation outstanding at June 30,
     2016, are as follows:

Fiscal Year  Certificates of Participation

Ending June 30, Principal  Interest           Total

    2017     $ 620,000 $ 595,614 $ 1,215,614
    2018
    2019     640,000       583,214            1,223,214
    2020
    2021     665,000       568,814            1,233,814
2022 - 2026
2027 - 2031  690,000       552,189            1,242,189
2032 - 2034
             715,000       535,801            1,250,801

             4,120,000     2,308,525          6,428,525

             5,365,000     1,429,579          6,794,579

             3,970,000     323,400            4,293,400

Total        $ 16,785,000 $ 6,897,136 $ 23,682,136

          D. Legal Debt Margin

                The Ohio Revised Code provides that voted net general obligation debt of the District shall never
                exceed 9% of the total assessed valuation of the District. The code further provides that unvoted
                indebtedness shall not exceed 1/10 of 1% of the property valuation of the District. The code
                additionally states that unvoted indebtedness related to energy conservation debt shall not exceed 9/10
                of 1% of the property valuation of the District. The assessed valuation used in determining the
                District’s legal debt margin has been modified by House Bill 530 which became effective March 30,
                2006. In accordance with House Bill 530, the assessed valuation used in the District’s legal debt
                margin calculation excluded tangible personal property used in business, telephone or telegraph
                property, interexchange telecommunications company property and personal property owned or leased
                by a railroad company and used in railroad operations. The effects of these debt limitations at June 30,
                2016, are a voted debt margin of $64,709,796 and an unvoted debt margin of $935,942.

NOTE 9 - CAPITALIZED LEASES - LESSEE DISCLOSURE

          In prior years, the District entered into lease agreements to acquire copiers and copier equipment. Capital
          assets consisting of equipment have been capitalized in the amount of $918,391. Accumulated depreciation
          as of June 30, 2016 was $413,276, leaving a current book value of $505,115. Lease payments have been
          reclassified and are reflected as debt service expenditures in the financial statements for the governmental
          funds. Principal and interest payments of $172,875 and $42,837, respectively, were paid from the general
          fund.

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