NOTE 9

SUMMARY OF GENERAL LONG-TERM DEBT

The State records its general long-term liabilities in the General Long-Term Debt Account Group. These liabilities include general obligation bonds, special obligation bonds, mortgages and other long-term notes payable, installment purchase contracts, capital leases, claims and judgments, compensated absences and pension obligations.

The following schedule shows the changes in the General Long-Term Debt Account Group for the year ended June 30, 1995 (expressed in thousands):

Primary Government

Governmental Fund Type Operations

General Obligation Bonds - The State Constitution limits the State's ability to incur debt. The State's general obligation debt may be authorized by constitutional amendment. A proposed amendment must be approved by two-thirds of both the Senate and the House of Delegates before it can be ratified or rejected by the voters. Once the amendment has voter approval, the Legislature must pass specific legislation authorizing the issuance of general obligation debt. General obligation bonds outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on general obligation bonds at June 30, 1995, were as follows (expressed in thousands):

Special Obligation Bonds - Special obligation bonds are issued by various state departments, agencies and authorities which are part of the primary government. Special obligation bonds are issued pursuant to specific statutory provisions enacted by the Legislature for the purpose of financing capital construction. Principal and interest payments are made from specifically dedicated fees and other revenues as directed by legislative appropriations. Special obligation bonds do not constitute general debt of the State.

Special obligation bonds, in general, have call provisions providing for redemption at the option of the State, beginning ten years following the date of issuance, in whole or in part, in inverse order of maturity, and pay a redemption price not exceeding 103% of par value.

The School Building Authority was established to create funds for the construction and maintenance of public school facilities so as to meet the educational needs of the State. The Authority may issue special obligation revenue bonds for such needs. The bonds, which are not general debt of the State, are secured by a pledge of revenues appropriated by the Legislature and deposited in the Capital Projects Fund established by the enabling act and transferred to the trustee in accordance with the constitution and laws of the State.

The Regional Jail Authority was established to construct, renovate, and equip regional jail and correctional facilities within the State. The State Building Commission issued bonds to finance the Authority's operations. The bonds, which are not general debt of the State, are payable from monies raised by the Authority consisting of certain dedicated revenues of the local governments who participate and use the facilities.

Special obligation bonds outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on special obligation bonds at June 30, 1995, were as follows (expressed in thousands):

Other Debt Instruments - Other debt instruments are similar to special obligation bonds in regard to the methods of issuance and the source of repayment of principal and interest.

The Department of Natural Resources has entered into a number of mortgages for the purchase of land. The State is required to make annual payments through appropriations made by the State Legislature.

Various state agencies have entered into numerous installment purchase contracts with parties outside the State for the purchase of buildings and equipment. The State is required to make base annual rental payments through General Fund appropriations made by the State Legislature. The installment purchase contracts terminate if the related annual appropriation is not made.

Other debt instruments outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on other debt instruments at June 30, 1995, were as follows (expressed in thousands):

Proprietary Funds

Internal Service Funds - The Building Commission was established to finance the construction of state government buildings and related facilities through the issuance of revenue bonds. The bonds, which are not general obligation debt of the State, are payable from monies raised by the Commission through the leasing of the facilities to other state agencies. Revenue Bonds outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on Internal Service Fund revenue bonds at June 30, 1995, were as follows (expressed in thousands):

Enterprise Funds - Enterprise Fund debt consists of installment purchase agreements, the repayment of which is derived from operating revenues. Installment purchase obligations outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on Enterprise Fund other debt at June 30, 1995, were as follows (expressed in thousands):

Discretely Presented Component Units

West Virginia Boards of Higher Education

The State has established the University of West Virginia Board of Trustees and the Board of Directors of the State College Systems to manage higher education bond-related activities. The Boards are authorized to issue revenue bonds for the purposes of financing all or part of the acquisition of land, the construction or renovations of buildings and the acquisition of furnishings or equipment for any such buildings of all state colleges and universities. The bonds, which are not general debt of the State, are payable from student tuition and other fees.

Revenue bonds outstanding at June 30, 1995, were $167,641,000 with interest rates ranging from 2.75% to 8.50% and a final maturity date of 2017. Future amounts required to pay principal and interest on Higher Education revenue bonds at June 30, 1995, were as follows (expressed in thousands):

The State's Higher Education institutions have entered into numerous installment purchase contracts with parties outside the State for the purchase of buildings and equipment. These liabilities are paid out of resources pledged by the Higher Education institutions.

Installment purchase contracts outstanding at June 30, 1995, were approximately $105,000 with a final maturity date of 1997 and interest rates ranging from 5.24% to 8.00%.

Future amounts required to pay principal and interest on Higher Education installment purchase contracts at June 30, 1995, were as follows (expressed in thousands):

Other Discretely Presented Component Units

Revenue bonds and other long-term debt are those liabilities that are paid out of resources pledged in the discretely presented component units. These revenue bonds and other long-term obligations do not constitute a liability or debt of the State. Revenue bond and other long-term debt outstanding at June 30, 1995, were as follows (expressed in thousands):

Future amounts required to pay principal and interest on other component units revenue bonds and other long-term debt at June 30, 1995, were as follows (expressed in thousands):

Debt Contingencies And No-Commitment Debt

As a vehicle to assist the local and other non-state governments in West Virginia, the State may appropriate sufficient amounts to meet any deficiencies that may arise because of failures by such entities to provide for debt service payments for obligations under the supervision and control of the Municipal Bond Commission. For the year ended June 30, 1995, no such amounts were transferred to the Municipal Bond Commission under this agreement.

The Hospital Finance Authority (HFA) and the Public Energy Authority (PEA) have issued bonds on behalf of third parties. The State is in no way obligated for these debt issuances, nor is the Authority. The obligations become an obligation of the third party when issued, because all rights to payments and/or obligations have been irrevocably assigned to a trustee. Payments are made directly to the trustee from dedicated revenues of the third parties, in accordance with the related bond indentures. The amount of such no-commitment debt outstanding at June 30, 1995, is approximately $325 million and $126 million for HFA and PEA, respectively.

Prior Defeasances

In prior years, the State defeased certain revenue bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payment on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in these financial statements. At June 30, 1995, the following outstanding bonds are considered defeased (expressed in thousands):