|
City of Redwood City
<br />Notes to the Basic Financial Statements (Continued)
<br />For the Year Ended June 30, 2025
<br />
<br />
<br />98
<br />Note 8 – Long-Term Liabilities (Continued)
<br />
<br />C. Business-Type Activities (Continued)
<br />
<br />Lease Liability
<br />
<br />The City has entered into leases for a recycled water site and city parking lot. The terms of the agreements are for
<br />50 years from lease commencements. The calculated interest rate of 1.5% was based on the length of the lease. As
<br />of June 30, 2025, the capitalized right-to-use assets related to leases were $3,588,572 and the total lease liability
<br />was $3,337,627 of which $65,107 is reported as a current liability representing the amount due within the next fiscal
<br />year.
<br />
<br />The annual debt service requirements are as follows:
<br />
<br />Year Ending
<br />June 30, Principal Interest Total
<br />2026 65,107$ 50,064$ 115,171$
<br />2027 66,083 49,088 115,171
<br />2028 67,074 48,097 115,171
<br />2029 68,081 47,090 115,171
<br />2030 69,102 46,069 115,171
<br />2031-2035 361,371 214,484 575,855
<br />2036-2040 389,299 186,556 575,855
<br />2041-2045 419,386 156,469 575,855
<br />2046-2050 451,798 124,057 575,855
<br />2051-2055 486,715 89,140 575,855
<br />2056-2060 400,466 54,492 454,958
<br />2061-2065 407,585 24,915 432,500
<br />2066 85,560 1,278 86,838
<br />Total 3,337,627$ 1,091,799$ 4,429,426$
<br />
<br />Subscription Liability
<br />
<br />The City has entered into subscription-based information technology arrangements (SBITAs) for services related
<br />to cloud-based software applications, data storage and management services. Under the terms of these
<br />arrangements, the City does not take possession of the software at any time and the vendor provides ongoing
<br />services for the software's operation. The subscription period with initial non-cancellable term was 5 years. The
<br />calculated interest rate used was 2.40%.
<br />
<br />As of June 30, 2025, the capitalized right-to-use assets related to SBITAs were $238,177 and the total subscription
<br />liability was $191,572, of which $40,623 is reported as a current liability representing the amount due within the
<br />next fiscal year.
<br />
<br />The annual debt service requirements are as follows:
<br />
<br />Year Ending
<br />June 30, Principal Interest Total
<br />2026 40,623$ 5,091$ 45,714$
<br />2027 47,294 3,649 50,943
<br />2028 50,350 2,082 52,432
<br />2029 53,305 666 53,971
<br />Total 191,572$ 11,488$ 203,060$
<br />7.C. - Page 130 of 269
<br />149
|