(7) Long-term Debt

The following is a summary of changes in long-term debt for the year ended June 30, 1995:

* (activity shown net)

In June 1995, the City entered into a loan agreement with the Massachusetts Water Pollution Abatement Trust (MWPAT) to borrow $863,853 to finance certain wastewater capital improvements. The original scheduled loan repayments are $1,431,429 including interest. The City expects to receive $279,197 of interest subsidies from the MWPAT over the life of the loan. Thus, the net debt service cost to the City is $1,152,232. Since the City is legally obligated for the total amount of debt, such amount has been recorded in the accompanying financial statements.

 

Annual requirements to amortize all general obligation bonds outstanding as of June 30, 1995, including interest, are as follows:

Note payable of $125,642 represents a note secured by the RBDC which matures in August 2001. The note is payable in monthly installments of principal and interest at a rate of 11%. Payments will total $27,300 each year for the next six years.

The note is secured by a first mortgage and a security agreement on the present site for the DPW, a collateral assignment of the lease between the City and RBDC with a provision to adjust rent to market value in the event of foreclosure, a note receivable and a security interest in certain property, the lease the RBDC holds with the U.S. Postal Service for space occupied on 300 Broadway, Revere, and a $10,000 certificate of deposit maintained with the mortgagor.

In 1984 the appellate tax board found in favor of abating real estate taxes paid by the Revere Racing Association to the City for all years prior to 1982. The City paid $1,898,270 including interest. The City funded the abatement and interest through a loan of $2,000,000 from the Local Aid Fund of the Commonwealth of Massachusetts. The loan is being repaid, without interest, in equal installments of $200,000 through fiscal 1996.

The Commonwealth of Massachusetts has approved school construction assistance to the City. The assistance program which is administered by the School Building Assistance Bureau (SBAB) provides resources for future debt service of general obligation school bonds outstanding. These resources are subject to annual appropriation by the state legislature and the City's compliance with certain reporting requirements. During 1995, the City received $408,988 of such assistance. Assuming satisfactory audit results and annual appropriations by the state legislature, $408,988 will be received in fiscal year 1996 and $47,450 will be received annually for fiscal years 1997 through 2006.

The City is subject to a dual level general debt limit; the normal debt limit and the double debt limit. Such limits are equal to 2-1/2% and 5%, respectively, of the valuation of taxable property in the City as last equalized by the Commonwealth's Department of Revenue. Debt may be authorized up to the normal debt limit without state approval. Authorizations under the double debt limit, however, require the approval of the Commonwealth's Emergency Finance Board. Additionally, there are many categories of general obligation debt which are exempt from the debt limit but are subject to other limitations.

As of June 30, 1995, the City may issue $43,289,132 additional general obligation debt under the normal debt limit. The City has $6,825,000 of debt exempt from the debt limit.

Authorized and unissued debt at June 30, 1995, is as follows:

The City pays assessments which include debt service payments to other local governmental units providing services within the City's boundaries (commonly referred to as overlapping debt). The primary overlapping debt relates to the Massachusetts Bay Transportation Authority (MBTA) and the Massachusetts Water Resources Authority (MWRA). The following summary sets forth the long-term debt of each entity at June 30, 1995, the estimated share of such debt being serviced by the City, and the total of its share of estimated indirect debt.