Marco Conceptual

General Debt Service School Department:

General Purpose School $ 1,681,394

The due to the primary government is the balance of another loan payable issued by the county for the School Department. The School Department has agreed to contribute the funds necessary to retire this loan.

Interfund Transfer:

Interfund transfers for the year ended June 30, 2013, consisted of the following amount:

Discretely Presented Henderson County School Department

General Purpose

Transfer Out School Fund

Nonmajor governmental fund $ 14,720

Transfer In

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them.

D. Long-term Obligations Primary Government

General Obligation Bonds, Notes, and Other Loan

Henderson County issues general obligation bonds and other loans to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment.

General obligation bonds, capital outlay notes, and other loans are direct obligations and pledge the full faith and credit of the government. General obligation bonds, the capital outlay note, and other loan outstanding were issued for original terms of up to 21 years for bonds, up to eight years for the note, and up to 21 years for the other loan. Repayment terms are generally

structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds, the note, and the other loan included in long-term debt as of June 30, 2013, will be retired from the General, General Debt Service, and Rural Debt Service funds.

General obligation bonds, the capital outlay note, and the other loan outstanding as of June 30, 2013, for governmental activities are as follows:

Original

Interest Final Amount Balance

Type Rate Maturity of Issue 6-30-13

General Obligation Bonds 1.75 to 4.75% 6-30-29 $ 18,750,000 $ 14,815,000 General Obligation

Bonds - Refunding 1 to 5 4-1-24 19,980,000 12,230,000 Capital Outlay Note 3 4-1-18 405,000 340,000

Other Loan 1.38 12-31-31 1,800,582 1,681,394

In prior years, Henderson County entered into an agreement with the State of Tennessee to receive funding from the state revolving loan fund program. Under this agreement, the program made $1,934,199 available for loan to the Henderson County School Department for wastewater facility improvements at four elementary schools. As of June 30, 2013, the School Department had drawn $1,800,582 of the available $1,934,199 loan. The improvements were completed during the prior year, and no additional funds are expected to be received. The loan is repayable at a 1.38 percent interest rate. In addition, the county pays an administrative fee in connection with this loan.

The annual requirements to amortize all general obligation bonds, the note, and the other loan outstanding as of June 30, 2013, including interest payments and other loan fees, are presented in the following tables:

Year Ending

June 30 Principal Interest Total

2014 $ 2,355,000 $ 1,036,135 $ 3,391,135 2015 2,425,000 955,811 3,380,811 2016 2,335,000 873,337 3,208,337 2017 2,120,000 788,935 2,908,935 2018 1,585,000 702,711 2,287,711 2019-2023 8,115,000 2,644,966 10,759,966 2024-2028 6,810,000 1,175,783 7,985,783 2029 1,300,000 58,900 1,358,900 Total $ 27,045,000 $ 8,236,578 $ 35,281,578 Bonds 47

Year Ending

June 30 Principal Interest Total

2014 $ 65,000 $ 10,200 $ 75,200 2015 65,000 8,250 73,250 2016 70,000 6,300 76,300 2017 70,000 4,200 74,200 2018 70,000 2,100 72,100 Total $ 340,000 $ 31,050 $ 371,050 Note Year Ending

June 30 Principal Interest Other Fees Total

2014 $ 80,568 $ 22,692 $ 1,344 $ 104,604 2015 81,444 21,576 1,284 104,304 2016 82,572 20,448 1,212 104,232 2017 83,724 19,296 1,152 104,172 2018 84,876 18,144 1,080 104,100 2019-2023 442,428 72,672 4,380 519,480 2024-2028 474,012 41,088 2,556 517,656 2029-2032 351,770 8,691 616 361,077 Total $ 1,681,394 $ 224,607 $ 13,624 $ 1,919,625 Other Loan

There is $5,080,518 available in the debt service funds to service long-term debt. Debt per capita, including bonds, the note, and the other loan totaled $1,047, based on the 2010 federal census.

The School Department is currently servicing some of the debt issued on its behalf by the primary government as noted in the table below. This debt is reflected in the government-wide financial statements as Due to the Primary Government in the financial statements of the School Department and as Due from Component Units in the financial statements of the primary government. In the prior year, this debt was reflected as debt of the School Department; however, this debt has been reclassified as debt of the primary government because the primary government is legally obligated to repay the debt.

Outstanding

Description of Indebtedness 6-30-13

Other Loan

Payable through General Purpose School Fund

Changes in Long-term Obligations

Long-term obligation activity for the year ended June 30, 2013, was as follows:

Governmental Activities:

Other

Bonds Notes Loan

Balance, July 1, 2012 $ 28,510,000 $ 1,080,046 $ 0

Reclassification of School Debt 0 0 1,760,378

Additions 4,035,000 0 0

Reductions (5,500,000) (740,046) (78,984)

Balance, June 30, 2013 $ 27,045,000 $ 340,000 $ 1,681,394 Balance Due Within One Year $ 2,355,000 $ 65,000 $ 80,568

Landfill Other

Compensated Postclosure Postemployment Absences Care Costs Benefits Balance, July 1, 2012 $ 107,097 $ 96,599 $ 132,376

Additions 140,443 1,769 32,674

Reductions (143,178) (3,500) (3,383)

Balance, June 30, 2013 $ 104,362 $ 94,868 $ 161,667 Balance Due Within One Year $ 104,362 $ 3,500 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2013 $ 29,427,291

Less: Balance Due Within One Year (2,608,430)

Less: Deferred Discount on Debt (8,309)

Add: Unamortized Premium on Debt 85,490

Noncurrent Liabilities - Due in

More Than One Year - Exhibit A $ 26,896,042

Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund.

Current and Advance Refunding

On July 12, 2012, Henderson County issued $4,035,000 in general obligation refunding bonds to retire the current obligations for the $430,000 School

Bonds, Series 2001; $139,442 School Capital Outlay Note, Series 2002B; $415,000 Capital Outlay Note, Series 2005A; and $51,600 Refunding Capital Outlay Note, Series 2005C. Also, the refunding bonds were used to advance refund $2,715,000 School Bonds, Series 2004, by providing resources to purchase U.S. government securities that were placed in an irrevocable trust to generate resources for all future debt service payments of the refunded bonds until they are called on April 1, 2014. As a result, the refunded bonds are considered defeased, and the liability has been removed from the county’s long-term debt. Also, as a result of the refunding, total debt service payments over the next 12 years will be reduced by $287,698 and an economic gain of $264,941 was obtained.

Discretely Presented Henderson County School Department

Changes in Long-term Obligations

Long-term obligation activity for the discretely presented Henderson County