Notes to the Financial Statements

June 30, 2014

Note 17 Long-Term Debt

The following is a summary of changes in long-term debt of the primary government for the year ended June 30, 2014, (amounts in thousands):

Balance Balance Amounts due
Governmental Activities June 30, 2013 Additions Reductions June 30, 2014 within one year
General Obligation $14,228,228 $3,127,440 $2,074,089 $15,281,579 $1,090,618
Transportation 3,461,875 600,000 290,615 3,771,260 269,845
17,690,103 3,727,440 2,364,704 19,052,839 1,360,463
Plus/(Less) Premiums 996,394 390,555 191,822 1,195,127 132,703
Total Bonds 18,686,497 4,117,995 2,556,526 20,247,966 1,493,166
Long-Term Notes 573,365 314,295 306,885 580,775 122,110
Other L/T Liabilities: 1
Net Pension Obligation 2,533,254 2,434,137 2,286,143 2,681,248 -
Net OPEB Obligation 6,682,308 1,752,857 672,105 7,763,060 -
Compensated Absences 515,713 41,904 44,284 513,333 56,822
Workers' Compensation 587,652 135,624 103,698 619,578 102,216
Capital Leases 38,218 8,827 9,225 37,820 5,488
Claims and Judgments 43,522 7,213 4,584 46,151 13,946
Landfill Post Closure Care - 35,751 - 35,751 -
Liability on Interest Rate Swaps 17,576 - 8,876 8,700 -
Contracts Payable & Other 705 - - 705 -
Total Other Liabilities 10,418,948 4,416,313 3,128,915 11,706,346 178,472
Governmental Activities Long-Term
Liabilities $29,678,810 $8,848,603 $5,992,326 $32,535,087 $1,793,748

1. In prior years, the General and Transportation funds have been used to liquidate other liabilities. 

Business-Type Activities          
Revenue Bonds $1,235,143 $80,340 $102,802 $1,212,681 $104,868
Plus/(Less) Premiums and Discounts 91,048 26,179 32,679 84,548 1,486
Total Revenue Bonds 1,326,191 106,519 135,481 1,297,229 106,354
Compensated Absences 160,046 40,051 33,520 166,577 53,410
Federal Loans Payable 574,312 92,891 233,634 433,569 -
Other 200,174 109,570 7,858 301,886 10,390
Total Other Liabilities 934,532 242,512 275,012 902,032 63,800
Business-Type Long-Term Liabilities $2,260,723 $349,031 $410,493 $2,199,261 $170,154

The liability for claims and judgments (Governmental Activities) includes a pollution remediation liability of approximately $40.6 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, 2014, long-term debt of component units consisted of the following (amounts in thousands):

Long-Term Balance Amounts due
Debt June 30, 2014 within year
Bonds Payable $3,942,055 $334,598
Escrow Deposits 192,150 48,986
Closure of Landfills 43 43
Annuities Payable 142,728 14,134
Rate swap liability 151,811 -
Other 17,782 1,196
Total $4,446,569 $398,957

Landfill Closure and Postclosure Care
Public Act 13-247 and section 99 of Public Act 13-184 required the Materials Innovation and Recycling Authority (formally known as the Connecticut Resources Recovery 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). During the fiscal year 2014, the authority transferred $35.8 million of its postclosure care landfill obligations to DEEP and concurrently transferred $31.0 million of its landfill reserves to the State general fund.

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.

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. By August 7, 2014 all solid waste authorizations concerning the above landfills had been transferred to DEEP.

As of June 30, 2014 the Hartford landfill had not been certified as closed and this landfill had not entered the postclosure care period. DEEP will assume the obligation to reimburse the authority for all postclosure care work for the Hartford landfill as of the date the authority completes its landfill closure work and submits its Closure Certification Report to DEEP. The transition of any vendor contracts and authorizations concerning the Hartford landfill will begin as of the date DEEP certifies the Hartford landfill as closed.