(9) LONG-TERM LIABILITIES, CONTINUED C Bonds Payable

The City’s bonds were issued primarily to finance or refinance capital fa- cilities. The 1998 Lease Revenue Bonds are reported only in the govern- ment-wide statements of net assets and activities; the balance of govern- mental activities debt issues are reported in the Capital Assets Internal Service Fund. Business-type activities debt issues are reported in the City’s enterprise funds. Several debt securities were issued for multiple purposes so the principal and related interest costs of the debt are allo- cated between the respective funds.

A summary of bonds outstanding at June 30, 2006 is as follows:

Govern- Business- mental type

Activities Activities Total

Revenue bonds: 1998 Refunding Water — 11,290,000 11,290,000 1998 Refunding Wastewater — 18,870,000 18,870,000 1998 Lease Revenue 34,175,000 — 34,175,000 1999 Refunding Lease 71,914,908 6,280,092 78,195,000 2001 Refunding Lease — 7,255,000 7,255,000 2003 Refunding Lease 33,937,695 22,672,305 56,610,000 Original issue premium 3,714,345 1,649,612 5,363,957 Original issue discount (251,176) (67,844) (319,020) Deferred amount on refunding (3,202,616) (3,785,565) (6,988,181) Total revenue bonds 140,288,156 64,163,600 204,451,756 Total bonds $ 140,288,156 64,163,600 204,451,756

Debt Issue

A description of individual bond issues follows:

Revenue Bonds

1998 Refunding Water Bonds – $14,760,000 Public Financing Authority, Water Revenue Refunding Bonds, Series 1998A, issued September 1998, are due in annual installments ranging from $350,000 to $975,000 through June 1, 2022, with interest rates ranging from 4.00% to 7.00% payable semi- annually June 1 and December 1. The Bonds are special limited obligations of the Public Financing Authority and are primarily payable from install- ment payments from the City pursuant to an in- stallment sale agreement dated September 1, 1998. The City’s obligation to make installment payments is solely payable from and secured by a pledge of net revenues of the Water Enterprise Fund. The City is required to remain in compliance with speci- fied reserve and revenue parameters as set forth in

the bond’s official statement. As of June 30, 2006, the City was in compliance with the reserve re- quirement, but was not in compliance with the revenue requirement. The requirement has been met in the following year.

$ 11,290,000

Less original issue discount (44,226)

Less deferred amount on refunding (631,833)

Net Bonds outstanding 10,613,941

1998 Refunding Wastewater Bonds – $24,650,000 Public Financing Authority, Wastewater Revenue Refunding Bonds, Series 1998A, issued September 1998, are due in annual installments ranging from $575,000 to $1,625,000 through June 1, 2022, with interest rates ranging from 4.00% to 7.00% payable semiannually June 1 and December 1. The bonds are special limited obligations of the Public Financ- ing Authority and are primarily payable from in- stallment payments from the City pursuant to an in- stallment sale agreement dated September 1, 1998. The City’s obligation to make installment payments is solely payable from and secured by a pledge of

net revenues of the Wastewater Enterprise Fund. $ 18,870,000

Less original issue discount (23,618)

Less deferred amount on refunding (1,086,959)

Net Bonds outstanding 17,759,423

1998 Lease Revenue Bonds – $34,175,000 Public Fi- nancing Authority, Lease Revenue Bonds, 1998 Se- ries A, were issued in July 1998 with $11,245,000, 5.00% term bonds due June 1, 2023 and $22,930,000, 5.25% term bonds due June 1, 2028. Bonds maturing on June 1, 2023 are subject to mandatory redemption in part by lot prior to matur- ity on June 1, 2021 and on each June 1 thereafter until maturity, from required sinking fund pay- ments. Bonds maturing on June 1, 2028 are subject to mandatory redemption in part by lot on June 1, 2024 and each June 1 thereafter until maturing, from required sinking fund payments. The Bonds are special obligations of the Public Financing Au- thority secured by and payable solely from rent payments from the City pursuant to a lease agree- ment.

June 30, 2006

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$34,175,000

Less original issue discount (251,176)

Net Bonds outstanding 33,923,824

1999 Refunding Lease Revenue Bonds – $92,425,000 Public Financing Authority, Lease Revenue Bonds, 1999 Refunding Series A, issued March 1999, are due in annual installments ranging from $355,000 to $12,785,000 through June 1, 2020, with interest rates ranging from 4.00% to 5.125% payable semi- annually June 1 and December 1. The Bonds are special obligations of the Public Financing Author- ity secured by and payable solely from rent pay- ments from the City pursuant to a lease agreement. The 1999 Refunding Lease Revenue Bonds were is- sued to refund bonds originally issued for multiple purposes, so the principal has been allocated and is accounted for in the appropriate City funds (enter- prise and internal service funds). The following is a schedule of the allocation of the 1999 Lease Reve- nue Bonds, net of original issue premium and de- ferred amount on refunding, by fund at June 30, 2006:

Capital Assets Fund $71,914,908

Parking Facilities Fund 6,280,092

$ 78,195,000

Plus initial issue premium 1,628,401

Less deferred amount on refunding (1,931,111)

Net Bonds outstanding 77,892,290

2001 Refunding Lease Revenue Bonds – $10,680,000 Public Financing Authority, Lease Revenue Bonds, 2001 Refunding Series A, issued December 2001, are due in annual installments ranging from $815,000 to $1,155,000 through June 1, 2013, with interest rates ranging from 3.00% to 4.13% payable semiannually June 1 and December 1. The bonds are special limited obligations of the Public Financ- ing Authority and are primarily payable from lease payments from the City pursuant to a lease agree-

ment dated December 1, 2001. $ 7,255,000

Plus original issue premium 37,931

Less deferred amount on refunding (373,385)

Net Bonds outstanding 6,919,546

2003 Refunding Lease Revenue Bonds – $68,445,000 Public Financing Authority, Lease Revenue Bonds, 2003 Refunding Series A, issued March 2003, are due in annual installments ranging from $2,285,000 to $9,870,000 through June 1, 2015, with interest rates ranging from 3.00% to 5.25% payable semi- annually June 1 and December 1. Bonds maturing on or after June 1, 2014 are subject to optional re- demption in part, without premium, from prepay- ments of base rental payments on or after June 1, 2014. The Bonds are special limited obligations of the Public Financing Authority and are payable solely from rent payments from the City pursuant to a lease agreement. The 2003 Refunding LRBs were issued to advance refunding the 1993 Refunding LRBs, which were in turn issued for multiple pur- poses so the principal has been allocated and is ac- counted for in the appropriate City funds (enterprise and internal service funds). The following is a schedule of the allocation of the 2003 Refunding LRBs, net of premium, by fund at June 30, 2006:

Capital Assets Fund $33,937,695

Parking Facilities Fund 20,204,109 Water Enterprise Fund 2,468,196

$ 56,610,000 Plus original issue premium 3,697,625 Less deferred amount on refunding (2,964,894)

Net bonds outstanding 57,342,731

June 30, 2006

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(9) LONG-TERM LIABILITIES, CONTINUED