YALOBUSHA COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 17 (7) Capital Leases. As Lessee: The county is obligated for the following assets acquired through capital leases as of September 30, 1997: General Fixed Assets Classes of Property Group Mobile equipment $ 617,305 Other furniture and equipment 145,497 Leased Property Under Capital Leases $ 762,802 The future minimum lease payments together with the present value of the net minimum lease payables as of September 30, 1997, are as follows: General Long-term Debt Group Year Ending September 30: 1998 $ 133,967 1999 93,927 2000 82,019 2001 44,836 2002 9,551 Total Minimum Lease Payments 364,300 Less: Amount representing interest 32,103 Present Value of Net Minimum Lease Payments $ 332,197 (8) Long-term Debt. Debt outstanding as of September 30, 1997, consisted of the following: Final Amount Interest Maturity Description and Purpose Outstanding Rates Date General Long-term Debt Account Group: A. General Obligation Bonds: Rural fire construction $ 80,000 7/7.25 11-15-00 Hospital improvements 120,000 5.9/6.1 5-1-01 District 2 road improvements 30,000 7.5 7-15-00 YALOBUSHA COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 18 Final Amount Interest Maturity Description and Purpose Outstanding Rates Date District 3 road bonds 6,000 8 11-1-98 District 3 construction 50,000 7 3-1-02 District 4 road & bridge construction 70,000 5.5/5.75 7-1-02 District 3 road and bridge 135,000 5/6.25 10-1-07 Yalobusha County rubbish 150,000 3.7/4 3-15-04 Fire bonds 150,000 5 7-07 Total General Obligation Bonds $ 791,000 B. Equipment Notes: Truck and trailer $ 33,700 5.20 12-01 C. Capital Leases: Communication system $ 7,613 5.73 8-98 Case 580 backhoe 649 6.5 10-97 Case 580 backhoe 764 6.5 10-97 John Deere motor grader 5,331 6.1 1-98 1993 Ford pickup 1,168 6.5 1-98 Caterpillar wheel loader 936F 40,859 6 5-00 IBM computer 17,232 6.13 6-98 1993 GMC Jimmy 2,069 6.25 5-98 Olathe brushclipper - 1/2 interest (District 3) 1,820 6.25 4-98 Olathe brushclipper - 1/2 interest (District 4) 1,819 6.25 4-98 Minolta copier 3,846 6 1-00 Garbage truck 6,130 6 10-99 Ford 66105 tractor 8,107 5.5 8-99 Copier 148 4.26 12-97 1996 Ford Crown Victoria 11,168 5.95 2-01 Fire truck 18,489 5.75 11-00 1996 Chevrolet dump truck 25,598 5.1 5-01 1996 Ford truck 14,950 5.1 2-01 Case backhoe 34,845 5.75 12-00 1996 Chevrolet dump truck 25,598 5.1 5-01 1996 Ford truck 14,950 5.1 2-01 1996 Chevrolet dump truck 25,598 5.1 5-01 Ford F 350 pickup 20,361 4.5 8-02 Ford F 350 pickup 23,160 4.5 6-02 Broom sweeper 19,925 5.4 10-01 Total Capital Leases $ 332,197 YALOBUSHA COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 19 Annual debt service requirements to maturity for the following debt reported in the General Long-term Debt Account Group are as follows: Year Ending September 30 Bonds Notes Total 1998 $ 160,839 7,667 168,506 1999 163,939 8,142 172,081 2000 158,509 7,791 166,300 2001 150,884 7,441 158,325 2002 89,050 7,091 96,141 Later years 239,318 239,318 Total 962,539 38,132 1,000,671 Less: Amounts representing interest 171,539 4,432 175,971 Total at Present Value $ 791,000 33,700 824,700 Legal Debt Margin - The amount of general obligation bonded debt that can be incurred by the county is limited by state statute. Total outstanding general obligation bonded debt during a year can be no greater than 15% of assessed value of the taxable property within the county, according to the then last completed assessment for taxation. However, the limitation is increased to 20% whenever a county issues bonds to repair or replace washed out or collapsed bridges on the public roads of the county. As of September 30, 1997, the amount of outstanding general obligation bonded debt was equal to 2.18% of the latest property assessments. The following changes occurred in liabilities reported at year end: Balance Balance Styling Oct. 1, 1996 Additions Reductions Adjustments Sept. 30, 1997 General Long-term Debt Account Group: Claims and judgments $ 11,176 482,148 474,985 18,339 General obligation bonds 749,000 150,000 108,000 791,000 Equipment notes 33,700 33,700 Capital leases 414,612 67,348 142,419 (7,344) 332,197 Other loans 299,176 299,176 Total $ 1,473,964 733,196 1,024,580 (7,344) 1,175,236 The adjustment is to correct a prior year error. YALOBUSHA COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 20 (9) Contingencies. Federal Grants - The county has received federal grants for specific purposes that are subject to audit by the grantor agencies. Entitlements to these resources are generally conditional upon compliance with the terms and conditions of grant agreements and applicable federal regulations, including the expenditure of resources for allowable purposes. Any disallowance resulting from a grantor audit may become a liability of the county. No provision for any liability that may result has been recognized in the county's financial statements. Litigation - The county is party to legal proceedings, many of which occur in the normal course of governmental operations. It is not possible at the present time to estimate ultimate outcome or liability, if any, of the county with respect to the various proceedings. However, the county's legal counsel believes that ultimate liability resulting from these lawsuits will not have a material adverse effect on the financial condition of the county. General Obligation Debt Contingencies - The county issues general obligation bonds to provide funds for constructing and improving capital facilities of the Yalobusha General Hospital. Such debt is being retired from pledged resources of these entities, and therefore, is reported as a liability of those entities. However, because general obligation bonds are backed by the full faith, credit and taxing power of the county, the county remains contingently liable for its retirement. The principal amount of such debt outstanding at year end is as follows: Balance at Styling September 30, 1997 General obligation hospital bonds $ 1,960,000 (10) Related Organization. The Board of Supervisors is responsible for appointing a voting majority of the members of the board of the Yalobusha County Water & Sewer District, but the county=s accountability for this organization does not extend beyond making the appointments. During the year, the county did not appropriate to this organization. (11) Jointly Governed Organizations. The county participates in the following jointly governed organizations: Communicare operates in a district composed of the Counties of Calhoun, DeSoto, Lafayette, Marshall, Panola, Tate and Yalobusha. The Yalobusha County Board of Supervisors appoints one of the seven members of the board of commissioners. The county appropriated approximately $15,435 for support of the district in fiscal year 1997. North Central Planning and Development District operates in a district composed of the Counties of Attala, Carroll, Grenada, Holmes, Leflore, Montgomery and Yalobusha. The Yalobusha County Board of Supervisors appoints four of the 28 members of the board of directors. The county appropriated approximately $27,974 for support of the district in fiscal year 1997. Northwest Mississippi Community College operates in a district composed of the Counties of Benton, Calhoun, DeSoto, Lafayette, Marshall, Panola, Quitman, Tallahatchie, Tate, Tunica and Yalobusha. The Yalobusha County Board of Supervisors appoints two of the 23 members of the college board of trustees. The county appropriated approximately $82,014 for maintenance and support of the college in fiscal year 1997. YALOBUSHA COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 21 (12) Defined Benefit Pension Plan. Plan Description. Yalobusha County, Mississippi, contributes to the Public Employees' Retirement System of Mississippi (PERS), a cost-sharing, multiple-employer, defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. Benefit provisions are established by state law and may be amended only by the State of Mississippi Legislature. PERS issues a publicly available financial report that includes financial statements and required supplementary information. That information may be obtained by writing to Public Employees= Retirement System, PERS Building, 429 Mississippi Street, Jackson, MS 39201-1005 or by calling 1-800-444-PERS. Funding Policy. PERS members are required to contribute 7.25% of their annual covered salary and the county is required to contribute at an actuarially determined rate. The current rate is 9.75% of annual covered payroll. The contribution requirements of PERS members are established and may be amended only by the State of Mississippi Legislature. The county's contributions (employer share only) to PERS for the years ending September 30, 1997, 1996 and 1995 were $117,875, $118,469 and $108,079, respectively, equal to the required contributions for each year. (13) Subsequent Events. Subsequent to September 30, 1997, Yalobusha County issued the following debt obligations: Issue Interest Issue Type of Source of Date Rate Amount Financing Financing 4-6-98 5.33 $ 38,598 Lease purchase Park patrol fees 5-1-98 4.65 16,255 Lease purchase 911 fees 5-27-98 4.3 33,076 Lease purchase District 3 road funds 7-22-98 3.9 160,000 Note State aid road funds 22 YALOBUSHA COUNTY (This page left blank intentionally) 23 YALOBUSHA COUNTY SUPPLEMENTAL INFORMATION 24 YALOBUSHA COUNTY (This page left blank intentionally) 25 YALOBUSHA COUNTY Reconciliation of Operating Costs of Solid Waste For the Year Ended September 30, 1997 Operating Expenditures - Cash Basis: Salaries $ 18,278 Expendable Commodities: Gasoline and petroleum products 984 Repair parts 1,806 Tires and tubes 1,604 Office supplies 1,200 Garbage collection service 126,131 Transfer station fees 11,654 Tire recycling services 1,054 Postage 2,772 Utilities 1,241 Fidelity bonds 300 Contract labor 855 State Tax Commission fees 676 Freight 154 Advertising 30 Solid Waste Cash Basis - Operating Expenditures: 168,739 Full Cost Expenses: Indirect administrative costs 4,158 Solid Waste Full Cost - Operating Expenses $ 172,897 26 YALOBUSHA COUNTY (This page left blank intentionally) . composed of the Counties of Calhoun, DeSoto, Lafayette, Marshall, Panola, Tate and Yalobusha. The Yalobusha County Board of Supervisors appoints one of the seven members of the board of commissioners Yalobusha. The Yalobusha County Board of Supervisors appoints two of the 23 members of the college board of trustees. The county appropriated approximately $82,014 for maintenance and support of the. bridges on the public roads of the county. As of September 30, 1997, the amount of outstanding general obligation bonded debt was equal to 2.18% of the latest property assessments. The following