Notes to the Financial Statements

June 30, 2015

Note 16 Long-Term Debt

The following is a summary of changes in long-term debt of the primary government for the year ended June 30, 2015, (amounts in thousands):

Beginning Ending Amounts due
Governmental Activities Balance Additions Reductions Balance within one year
Bonds:
General Obligation $ 15,281,579 $ 2,736,220 $ 1,615,262 $ 16,402,537 $ 1,212,674
Transportation 3,771,260 731,545 413,265 4,089,540 256,845
19,052,839 3,467,765 2,028,527 20,492,077 1,469,519
Plus/(Less) Premiums 1,195,127 386,856 164,811 1,417,172 150,488
Total Bonds 20,247,966 3,854,621 2,193,338 21,909,249 1,620,007
Long-Term Notes 580,775 461,610 522,110 520,275 167,690
Other L/T Liabilities: 1
Net Pension Liability (Note 11) 2 27,773,383 4,362,297 5,964,849 26,170,831 -
Net Pension Obligation 2,559,621 2,559,621 - -
Net OPEB Obligation 7,763,060 1,659,843 439,977 8,982,926 -
Compensated Absences 513,333 32,233 46,562 499,004 42,414
Workers' Compensation 619,578 137,770 106,164 651,184 103,675
Capital Leases 37,820 3,036 5,488 35,368 6,060
Claims and Judgments 46,151 38,576 9,140 75,587 31,149
Landfill Post Closure Care 35,751 8,009 8,575 35,185 -
Liability on Interest Rate Swaps 8,700 - 5,339 3,361 -
Contracts Payable & Other 705 - - 705 -
Total Other Liabilities 39,358,102 6,241,764 9,145,715 36,454,151 183,298
Governmental Activities Long-Term
Liabilities 2 $ 60,186,843 $10,557,995 $ 11,861,163 $ 58,883,675 $ 1,970,995
1. In prior years, the General and Transportation funds have been used to liquidate other liabilities.
2. The beginning totals are restated by the effect of roll-back procedures pertaining to reporting the net pension
liability following the guidance of GASB No. 68 as of the June 30, 2014 measurement date.
Business-Type Activities
Revenue Bonds $ 1,212,681 $ 265,696 $ 121,598 $ 1,356,779 $ 110,096
Plus/(Less) Premiums and Discounts 84,548 27,731 1,542 110,737 1,486
Total Revenue Bonds 1,297,229 293,427 123,140 1,467,516 111,582
Compensated Absences 166,577 59,666 40,153 186,090 55,533
Federal Loans Payable 433,569 60,606 391,121 103,054 -
Other 301,886 60,423 11,678 350,631 13,719
Total Other Liabilities 902,032 180,695 442,952 639,775 69,252
Business-Type Long-Term Liabilities $ 2,199,261 $ 474,122 $ 566,092 $ 2,107,291 $ 180,834

The liability for claims and judgments (Governmental Activities) includes a pollution remediation liability of approximately $34.9 million. This liability represents the State's share of the cost of cleaning up certain polluted sites in the state under federal and state superfund regulations. The liability was estimated using the cash flow technique and could change over time due to changes in costs of goods and services, changes in remediation technology, or changes in laws and regulations governing the remediation effort. In addition, there are other polluted sites in the state that require remedial action by the State that will result in additional cleanup costs. The State did not recognize a liability for these costs at year end because it could not be reasonably estimated.

As of June 30, 2015, long-term debt of component units consisted of the following (amounts in thousands):

Long-Term Balance Amounts due
Debt June 30, 2015 within year
Bonds Payable $ 4,532,155 $ 356,199
Escrow Deposits 189,900 47,520
Closure of Landfills - -
Annuities Payable 130,652 11,255
Rate swap liability 183,246 -
Net Pension Liability 148,982 -
Other 30,624 898
Total $ 5,215,559 $ 415,872

Landfill Closure and Postclosure Care
Public Act 13-247 and section 99 of Public Act 13-184 required the Materials Innovation and Recycling Authority to transfer all legally required reserves and obligations resulting from the closure of the authority's landfills located in Hartford, Ellington, Waterbury, Wallingford and Shelton to the State Department of Energy and Environmental Protection (DEEP). The transfer of legal obligations resulting from the closure of landfills was addressed by a memorandum of understanding ("MOU") between the Authority and DEEP. The MOU became effective April 24, 2014 at which point in time DEEP began reimbursing the Authority for all postclosure care and maintenance work at all landfills other than the Hartford landfill and the parties began a transition process to assign vendor contracts for the performance of landfill postclosure care work to DEEP and to assign federal and state licenses, permits, and orders ("Authorizations") related to the landfills to DEEP.

During the year ended June 30, 2015, all work associated with the closure of the Hartford landfill was completed. DEEP assumed the obligation to reimburse the authority for all postclosure care work for the Hartford landfill upon the landfill being certified as closed. All landfill expense reimbursements paid by DEEP totaled $112,000 in FY2015.

GASB Statement No.18 Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Cost applies to closure and postclosure care costs that are paid near or after the date a landfill stops accepting waste. The State recognizes landfill expenditures and related General Fund liabilities using the modified accrual basis of accounting. DEEP estimates the State's landfill liability for closure and postclosure costs based on landfill capacity. Increases or decreases in such estimates are reported as additions or reductions in this line item of the State's long-term liabilities. The liability for these estimated costs is reduced when the costs are actually paid. Actual costs may be higher than estimated due to inflation or changes in permitted capacity, technology or regulation. As of June 30, 2013, all five of the landfills had no capacity available since 100 percent of their capacity had been used.