CITY OF SUFFOLK, VIRGINIA NOTES TO FINANCIAL STATEMENTS June 30, 2015
Note 9.
Long-Term Liabilities (Continued) Landfill Post closure Care Costs: The City closed its former landfill site in 1984 and completed initial closure measures in 1995. In accordance with federal and state laws, the City placed a final cover on this site and was required to perform certain maintenance and monitoring functions for a minimum of ten years after closure. In 2011, the City re-evaluated the estimate and determined that the monitoring periods could extend for another ten years, through 2021. The estimated liability is based on the Virginia Department of Environmental Quality (DEQ) accepting the active remedy proposed by the City as discussed. If the DEQ does not accept the active remedy, the actual costs may change. Also, actual costs may be higher due to inflation, changes in technology, changes in regulation, or other unforeseen circumstances. The cumulative amount of estimated post closure care costs, and corrective action to date for this site, less cash paid for such costs to date, totals $1,688,880. This amount is included in the long-term liabilities in the primary government. The City uses the bond method test of demonstrating assurance for post closure care.
Note 10.
Leases Lessor: On October 27, 2009, the City entered into an operating lease whereby the City leased the Sleepy Hole Golf Course to a private operator. The lease was amended on May 1, 2010 and the term of the lease ends April 30, 2030. The agreement requires annual lease payments to the City of $356,000. This amount is reduced by certified annual capital costs made by the operator to enhance the integrity of the golf course facility. For the year ended June 30, 2015, the operator did not report any certified capital improvements. The remaining amount of unearned lease revenue, in the form of capital improvements exceeding the annual lease payments at June 30, 2015, is $1,301,288. Lessee: The City also leases various equipment and facilities through operating leases, which are subject to appropriation annually. Rent expense for governmental and business-type activities was $1,602,844 and $1,615,067 respectively. Future minimum lease payments under these leases are as follows: 2016 2017
$ $
55
1,606,593 1,167,376 2,773,969