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City of Raleigh

Financial Section

B. Commitments and contingent liabilities 

Commitment ‐ Enterprise Funds

In February 1972, the City entered into a raw water storage contract  and joint use 

construction costs with the U. S. Corps of Engineers for raw water usage of up to 100 million gallons per day from 

Falls Lake.  The City’s estimated share of construction cost for the project was estimated at $12,170,000 payable 

annually over 50 years beginning in 1984.  The contract requires that the City pay certain capital and operating costs 

of the lake which are dependent upon future costs of operation.  The City’s fiscal year 2015‐16 obligation was 

$848,305.  It is estimated, at this time, that the future cost to the City will not exceed $850,000 annually and will be 

repaid in 2033 with a final payment of $3,726,122. 

Contingent Liabilities

.

Amounts received or receivable from grant agencies are subject to audit and adjustment by 

grantor agencies, principally by the federal government.  Any disallowed claims, including amounts already 

collected, may constitute a liability of the applicable funds.  The amount, if any, of expenditures that may be 

disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be 

immaterial. 

The City is a defendant in various lawsuits.  Although the outcome of these lawsuits is not presently determinable, in 

the opinion of the City’s counsel the resolution of these matters will not have a material adverse effect on the financial 

condition of the City. 

Contingent Liabilities – Facility Fees

.

The City enters into Thoroughfare Facility Fee Reimbursement contracts that 

provide developers with contract awards based on the calculated value of the capital contributions to the City.  Each 

contract states minimum amounts that must be paid and recorded as long‐term liabilities in the City’s entity‐wide 

financial statements.  The remaining liability amounts for each contract are paid based on a formula and are 

contingent on available funds in the facility fee reimbursement account.  The total value of the contracts at June 30, 

2016 was $13,611,552.  Of this amount, $7,056,868 was recorded as a liability, and the remaining $6,554,684 represents 

a contingent liability. 

C. Jointly governed organizations 

Raleigh‐Durham Airport Authority

.

The Raleigh‐Durham Airport Authority plans and conducts operations of the 

Raleigh‐Durham International Airport.  This eight‐member governing body is jointly appointed by the City of 

Durham, City of Raleigh, County of Durham and County of Wake, with each member government appointing two 

members.  The authority selects the management and sets the budget and financing requirements of the airport.  Each 

member government contributes $12,500 annually for administration of the authority.  Neither the City nor the other 

member governments exercise management control or are responsible for budget and financing requirements for the 

authority.  A special airport tax district of Durham and Wake Counties was created to aid in the financing of major 

airport facilities and is governed by two members each from the respective county boards of commissioners.  Because 

of its limited role in the Raleigh‐Durham Airport Authority and the related special tax district, the City does not 

consider its participation to be a joint venture and, accordingly, further disclosure of the airport entity is not included.  

The authority does not meet the criteria to be included in the City’s financial reporting entity. 

Triangle J Council of Governments

.

  The City, in conjunction with three counties and 22 other municipalities are 

members of the Triangle J Council of Governments.  The participating governments established the council to 

coordinate various regional interests and intergovernmental funding. Each participating government appoints one 

delegate to the councilʹs governing board.  The City paid dues of $122,585 to the council during the fiscal year ended 

June 30, 2016.  The council does not meet the criteria to be included in the City’s financial reporting entity. 

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