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 |
| Bonds: | |||||
| 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.