Employee benefits earned but not reflected as cost as of September 30, 1979, are summarized as follows. Accrued benefits earned at commencement of Home Rule on Less $2,023 Interest from 1976 through 1979 on above liability 629 Amount to be funded by the Federal government from 1980 to 2004, discounted to present value at 7% (649) (632) $1,371 These plans remain on a "pay as you go" basis. As of September 30, 1979, the District has reflected $740 million as a pension liability, representing the excess of pension costs over retirement benefits paid to retirees for the years 1976 to 1979. Non-District Administered Plans Most District employees are covered by the U. S. Civil Service Retirement System and have the same status and benefits as Federal employees. Employees and the District each pay 7% of the employees' salary to the U. S. Civil Service Commission, which is responsible for administering the system and paying benefits. The accompanying Statement of Costs of Services and Revenues reflects as costs the District's annual payments to the U. S. Civil Service Commission. Summary The following table shows certain information about the retirement systems covering District employees. (7) ASSETS RESTRICTED TO CERTAIN USES AND RELATED LIABILITIES Restricted assets and liabilities include retirement funds assets, endowment grants to the University of the District of Columbia by the Federal government, and cash and other assets held by the District in a trustee capacity or as agent for others. At September 30, 1979, net assets of Trust Funds were $710 million, of which $688 million relates to the three retirement trusts. The The two largest restricted activities are the retirement trust funds (see The transactions relating to these restricted activities have been excluded from the Consolidated Statement of Costs of Services and Revenues because they are not considered a part of the District's operations. (8) COSTS OF SERVICES Costs of services consist of the following types (in $ millions). Salaries and wages and fringe benefits except (9) Depreciation and interest are allocated in the Consolidated Statement of Costs of Service and Revenues to specific programs of the District based on the amount of assets and debt associated with each program. FINANCIAL RELATIONSHIP WITH THE FEDERAL GOVERNMENT Operating Grants ($387 million) The District, like states and cities, participates in Federal grant programs. The following summarizes the significant Federal operating grants received in 1979 (in $ millions). Net Current Amounts Due to Federal Agencies ($78 million) At September 30, 1979, the District had current payables to and receivables from the Federal government as follows (in $ millions). During 1979, the District borrowed up to $40 million from the Federal government, interest-free, to meet current short-term cash requirements. As of September 30, 1979, the outstanding borrowings were $20 million. During 1980, the Federal government will continue to provide temporary advances. Long-Term Borrowings ($1,374 million) The Home Rule Act granted the District the authority to borrow money from the public, subject to the approval of Congress. However, all cash borrowed to date has been obtained from the Federal government for property acquisition. Loans to finance capital expenditures are repayable over 5 to 40 years, depending on the project financed. Interest is charged at the Federal interest rate prevailing at the time the cash is borrowed. The average interest rate of the outstanding debt was 7.49% at September 30, 1979. During 1979, the District borrowed $100 million from the Federal government at interest rates varying from 8.88% to 9.25%. Of the $1,374 million outstanding debt at September 30, 1979, $149 million was for water and sewer facilities and $1,225 million was for general government factilities. Long-term debt payable to the Federal government is due as follows. The borrowings from the Federal government are repayable from taxes and other revenues. As of September 30, 1979, principal repayments of $23 million may be deferred until revenues from the users of the Potomac Interceptor Sewer are adequate to cover debt repayments. Accordingly, the District has deferred repayment of $3 million, together with accumulated interest of $9 million, until adequate revenues have been received. Stadium construction bonds for Robert F. Kennedy Stadium were sold publicly in 1960 and guaranteed by the Federal government. The $19.8 million balance was paid in full on December 3, 1979. Special Activity Advances The Federal government has made interest-free advances to the District Unemployment Compensation Trust totalling $70 million as of September 30, 1979. These advances can only be repaid from future unemployment taxes levied on District employers and will not be repaid from general revenues. These advances are included, net of the $28 million trust fund deficit, in restricted liabilities ($45 million). The Redevelopment Land Agency and the National Capital Housing Authority have outstanding borrowings of $138 million as of September 30, 1979, repayable solely from future Federal debt service grants to the District. These loans, which were used for purchases of land and buildings by NCHA and urban development by RLA, are guaranteed by the Federal government and have been reflected in the financial statements as Federal capital grants for NCHA and Federal operating grants for RLA since the District has no responsibility for these loans. Other Transactions With the Federal Government The District budget is subject to review and approval by the Federal government (see Note 3). In addition, under Home Rule, Congress may override actions taken by the Council under certain conditions. The Federal government is a participant in the development of the regional mass transportation system (see Note 5). The majority of the District's employees participate in the Federal Civil The Federal government provides the District with mental health services through St. Elizabeth's Hospital (a Federal institution). For these services, the District paid the Federal government $21 million in 1979. Congress is currently considering several proposals to transfer St. Elizabeth's to the District. The Federal government owns certain land, which is not reflected in the Balance Sheet, on which the District has buildings and improvements costing $116 million. The District may purchase supplies from the General Services Administration at the same prices paid by Federal agencies, and, in 1979, bought $12 million from GSA. |