NOTES TO FINANCIAL STATEMENTS

NOTE 8. LONG-TERM DEBT (CONTINUED)

Notes Payable (Continued). The Downtown Development Authority has incurred debt to a financial institution to purchase a building. In connection with this debt, a contract has been entered into between the Downtown Development Authority and the City of Fayetteville whereby the City is to levy an annual tax on all taxable property located within the boundaries of the City in order to produce revenues sufficient to pay the debt service on the Downtown Development Authority debt. In the event that payments of this tax by the City to the Downtown Development Authority each year are not sufficient to pay the debt service payment on the debt, the City will be liable for any difference. For the fiscal year ended July 31, 2017, the levied tax by the City totaled $2,291,083 and the total debt service related to the revenue bonds totaled $13,322. Amounts pledged equal total debt service for each applicable year. The note is as follows at July 31, 2017:

The annual requirements to pay the Downtown Development Authority’s notes outstanding are as follows:

The City has also incurred debt to the Georgia Environmental Facilities Authority for construction of various water and sewer system projects. This note is a construction line of credit agreement with a rate of 2.03% for $801,206, of which $1,465,000 had been drawn as of July 31, 2017. A debt service requirements to maturity schedule is not presented for the construction line of credit as this note payable is in the draw down phase as of July 31, 2017, and repayment will be determined when construction is complete and all draws have been made.