HomeMy WebLinkAboutNC Comprehensive Report (Finance) (69)CITY OF NATIONAL CITY
Notes to the Basic Financial Statements
(Continued)
(10) Commitments and Contingencies
A. Lawsuits in the Normal Course of Business
The City is presently involved in certain matters of litigation that have arisen in
the normal course of conducting City business. City management believes, based
upon consultation with the City Attorney, that these cases, in the aggregate, are
not expected to result in a material adverse financial impact on the City.
Additionally, City management believes that the City's insurance programs are
sufficient to cover any potential losses should an unfavorable outcome
materialize.
B. Federal and State Grant Programs
The City participates in several federal and state grant programs. These programs
have been audited by the City's independent auditors in accordance with the
provisions of the federal Single Audit Act, as amended and applicable state
requirements. No cost disallowances were proposed as a result of these audits.
However, these programs are still subject to further examination by the grantors
and the amount, if any, of expenditures which may be disallowed by the granting
agencies cannot be determined at this time.
(11) Pledged Revenues
The City and its component units have a number of debt issuances outstanding
that are collateralized by the pledging of certain revenues. The amount and term
of the remainder of these commitments are indicated in the debt service to
maturity tables presented in the accompanying notes. The purposes for which the
proceeds of the related debt issuances were utilized are disclosed in the debt
descriptions in the accompanying notes. For the current year, debt service
payments as a percentage of the pledged gross revenue (or net of certain expenses
where so required by the debt agreement) are indicated in the table below. These
percentages also approximate the relationship of debt service to pledged revenue
for the remainder of the term of the commitment:
Description of
Pledged Revenue
Tax increment revenues
Annual Amount of
Pledged Revenue
(net of expenses,
where required)
$6,054,668
Annual Debt
Service Payments
(of all debt secured
by this revenue)
Debt Service
as a Percentage of
PIedged Revenue
4,310,000 71%
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