Notes to Financial Statements

City Leases

GASB 87 Implementation

On October 1, 2021, the City implemented the GASB 87 standard. The City recorded as a Lessee the right to use assets of $8,926 and associated Lease Payable of $8,926 . The City as Lessor recorded the lease receivables of $41,843 and associated deferred inflow of resources of $41,843. The overall impact on the Citywide net position was zero.

City as Lessee

The City has obtained land, office space, buildings, and equipment through long-term leases. The terms and conditions of these leases varies. Some leases are fixed, others are periodic payments over the lease term which ranges between 1 - 50 years. The interest rates on the leases range from 0.85% - 2.84% based on the City’s incremental borrowing rate. The right-to-use assets are disclosed in the capital assets footnotes for Governmental and Business-type activities of $8,564 and $272, respectively.

City as Lessor

Lease receivables are recorded by the City as the present value of future lease payments expected to be received from the lessee during the lease terms. Lease receivables are subsequently reduced over the life of the lease as cash is received in the applicable reporting period. The present value of future lease payments to be received are discounted based on the interest rate the City charges the lessee. The interest rates on the leases range from 0.85% - 2.84% based on the City’s incremental borrowing rate.

The General Fund leases land, retail space and City owned light poles under various leases that range from 1 to 50 years. The provisions are fixed and have variable rent payments. The long-term leases are recorded in the applicable lease receivable and lease deferred inflows of resources for a total of $3,980 and $3,918, respectively. Interest revenue recognized on these leases was $96 for the year ended September 30, 2022. Principal receipts were recognized of $231 and final receipt expected in fiscal year 2077.

The Airport leases terminal space (except for regulated leases), land, aircraft maintenance and overhaul facilities, cargo facilities, hangars and other structures to air carriers and other tenants under various leases. The majority of which are non-cancellable and range from 1 to 50 years. Certain provisions of the leases provide for fixed and variable rental payments, and all are generally designed to allow the Airport to meet its debt service requirements and recover certain operating and maintenance costs. In addition, certain agreements under which the Airport receives revenue from the operation of concessions within in the airport provide for the payment of a fee based on the greater of an aggregated percentage of gross receipts or a guaranteed minimum. The long-term leases are recorded in the applicable lease receivable and lease deferred inflows of resources for a total of $30,801 and $30,738, respectively. Interest revenue recognized on these leases was $178 for the year ended September 30, 2022. Principal receipts were recognized of $6,112 and final receipt expected in fiscal year 2077.

Water Renewal has various land leases which range from 1 to 40 years. Certain provisions of the lease provide for fixed and variable lease payments. The long-term leases are recorded in the applicable lease receivable and lease deferred inflows of resources for a total of $656 and $639, respectively. Interest revenue recognized on these leases was $20 for the year ended September 30, 2022. Principal receipts were recognized of $19 and final receipt expected in fiscal year 2067.

Housing Rehabilitation leases a building which has a term of 1 year. Provisions of the lease provide for fixed lease payments. The long-term lease is recorded in the applicable lease receivable and lease deferred inflows of resources for a total of $17 and $16, respectively. Principal receipts were recognized of $15 and final receipt expected in fiscal year 2023.