City of Devine’s audit shows Long Term Debt now at $11.7 Million

The City of Devine’s long term debt is now $1,487,418 (governmental activities) plus $10,226,680 (business type activities) equaling = $11.754 million dollars according to the annual audit for fiscal year October 1, 2021- September 31, 2022 as presented on March 21, 2023 at the regular city council meeting.
Long term debt of the City consists of various series of general obligation bonds, revenue bonds, and capital leases. General obligations bonds are payable from a levy of ad valorem taxes upon all taxable property within the City and from certain net revenues derived from the operation of the city’s water and sewer system. Revenue bonds are generally payable from pledged revenues generated by the water and sewer fund. Capital leases are payable from revenues generated by the City’ governmental activities and the levy of ad valorem taxes. The debenture agreement for water and sewer bonds requires that funds be available for 1/12th of the principal and 1/6th of the interest requirements of the next fiscal year.
Leases:
On May 1, 2018, the City entered into a capital lease agreement with John Deere Financial for the purchase of golf course maintenance equipment, which is the security on the lease. Lease payments are paid out of the governmental activities. The lease contains (1) a provision that default on the note occurs when the lessee fails to pay any amounts due on the obligation, (2) lessee becomes insolvent or the subject of bankruptcy, (3 ) lessee fails to obtain insurance on the equipment, (4) equipment is impounded, and (5) lessee fails to produce collateral for inspection within 10 days upon demand.
The City leases photocopy and postage machines with agreements having 5-year terms. Payments of $1,407 are made monthly which consist of principal and imputed annual interest of 3.91%. No assets are pledged as collateral for these leases. A summary of right-to-use lease arrangements for the year ended September 30, 2022, is as follows:
CWTP Copy Machine Lease, 2020= Original Lease Liability $1,000,000, interest paid this year $1,178. New lease agreement $38,126, Principal paid this year $10,459, Principal Outstanding at 9/30/2022 of $27,667, Principal due within one year $10,745.
CTWP Postage Machine Lease, 2021 Original Lease Liability $23,894, interest paid this year $578. New lease agreement $23,894, Principal paid this year $3,361, Principal outstanding at 9/30/22 of $20,533, Principal due within one year $4,544.
Total right to use lease liabilities outstanding of $48,200 with $15,289 in principal due this year.
Debt/Governmental Activities Payable:
2021 General Certificate of Obligation Combined Tax and Revenue of $1,000,000, outstanding balance of $990,000, with $65,000 due within one year.
Series 2020 Tax Note: $475,000 with outstanding balance of $320,000, with $160,000 due within one year.
Loan Payable: $135,000, finished paying off and interest of $2,589.
Capital Lease Payable: $226, 514, finished paying off and interest of $3,189.
Right to Lease Liabilities: $34,548, balance outstanding $25,740, due within one year $9,288.
Accrued Vacation and Leave: $151,678
Debt/Business Type Payable:
2019 General Obligation Combined Tax and Revenue, $1Million, interest paid $17,568, balance $780,000, due within a year $105,000.
Revenue Bonds:
2013 General Obligation Refunding Bonds: $1.84 Million, interest paid this year $18,005, balance $550,000, and due within one year $175,000.
2018A Revenue Bonds/Utility System: $2.75 Million, interest paid this year $53,280, principal paid this year $70,000, balance $2.475 Million, due within one year $75,000.
2018B Revenue Bonds/Utility system: $6.645 Million, zero interest paid, principal paid this year $115,000, balance of $6.355 Million, due within one year $115,000.
Right to Use Liabilities: $27,472, balance $22,460, due within one year $6,001.
Accrued Vacation and Leave: $44,220.
Total City’s long term debt is $1,487,418 (governmental activities) plus $10,226,680 (business type activities) equaling = $11.754 million dollars.
(Above Figures for Long Term Debt and Right To Use Lease Liabilities Payable taken from 2021-2022 Audit presented at the meeting).