Problem - Background Information

The following information relates to the Town of Johnsonville for the fiscal years ending 9/30/14 and 9/30/15.

In March 2013, the citizens of Johnsonville approved an additional ¼ penny sales tax to be used to fund debt service requirements associated with the City's transportation network. During the spring and summer of 2013, the City Council, City Manager, Public Works Director, City Engineer, and a citizen's committee worked together to identify and prioritize the City's transportation needs.

Based on the recommendation of the citizen's committee, the City Council authorized an expansion and extension of Main Street in an amount not to exceed $50,000,000 at its last meeting in September. The project is to be funded with bonds of $39,000,000, a contribution of $9,500,000 from the General Fund, and a State grant of $1,500,000 and a separate capital project fund will be used to account for the project throughout its duration. Upon completion of the project, any funds remaining in the Capital Project Fund are to be transferred to the Debt Service Fund.

The following transactions occurred during the fiscal years ending 9/30/14 and 9/30/15.

1. 10/15/13 - General Fund transferred $9,500,000 to the newly established Capital Projects Fund.

2. 3/1/14 - Paid architect fees of $2,000,000 associated with the road expansion.

3. 3/31/14 - The City issued 5%, 20-year serial bonds dated 3/31/14 in the face amount of $39,000,000 at 102. Interest is payable semi-annually on March 31 and September 30. Equal principal payments are due each March 31 with the first principal payment due 3/31/15. According to the Bond Indenture, any premium on the bonds is to be deposited into a debt service fund and is restricted for debt service (for accounting purposes, assume the premium is amortized using the straight-line method). The Bond Indenture also requires the City to transfer any unspent bond proceeds at the end of the construction project to the Debt Service Fund to be used for debt service.

4. 4/15/14 - City Council awarded a $45,000,000 construction contract to the ABC Construction Company. A purchase order was issued for the full amount of the contract.

5. 6/1/14 - The City paid the Electric Utility Fund $500,000 for wiring associated with street lights to be placed in the right-of-way of the expanded road.

6. 7/15/14 - The City received a check from the State Department of Revenue for $3,500,000 for the ¼ penny sales tax collected through 6/30/14.

7. 7/31/14 - ABC Construction Company submitted its first progress billing for $25,000,000. The City Engineer inspects the work performed to date and approves the pay request in full less 5% for retainage.

8. 8/15/14 - The City pays ABC Construction Company the amount billed less the 5% amount retained.

9. 9/15/14 - The City receives $1,500,000 from the State Department of Transportation as a grant in aid of construction.

10. 9/30/14 - Amounts due the bondholders are paid.

11. 1/15/15 - The City received a check from the State Department of Revenue for $2,500,000 for the ¼ penny sales tax collected through 12/31/14.

12. 2/12/15 - ABC Construction Company submitted a final bill for the project in the amount of $20,000,000. The City Engineer inspects the work performed and finds a 500 foot section of the road needs to have the asphalt re-applied and approves the pay request in full less 5% for retainage.

13. 3/1/15 - City employees re-apply asphalt to the section of road at a labor and materials cost of $500,000 which is paid with funds in the Capital Projects Fund.

14. 3/31/15 - Amounts due the bondholders are paid.

15. 4/1/15 - Public Works employees purchase and install landscape materials in the total amount of $1,300,000 which are paid with funds in the Capital Projects Fund.

16. 4/15/15 - All amounts due ABC Construction Company are paid.

17. 6/1/15 - The expansion of Main Street is complete and all costs incurred have been paid.

18. 9/30/15 - Amounts due the bondholders are paid.

Questions -

1. What is the total "fund balance" in the debt service fund at 9/30/14?

2. What is the total "fund balance" in the debt service fund at 9/30/15?

3. What is the amount of expenditures in the Capital Projects Fund for the year ending 9/30/14?

4. What is the amount of expenditures in the Capital Project fund for the year ending 9/30/15?

5. What is the amount of expenditures for "interest" for the year ending 9/30/14?

6. What is the amount of expenditures for "interest" for the year ending 9/30/15?

7. What is the amount of expenditures for "principal" for the year ending 9/30/14?

8. What is the amount of expenditures for "principal" for the year ending 9/30/15?

9. What is the amount available for spending at 9/30/14 in the Capital project fund?