Agenda - 2-17-14 Reg. Meeting - Laserfiche WebLink

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037 JOHNSTON- LEE - HARNETT COMMUNITY ACTION, INCORPORATED Notes to Financial Statements June 30, 2013 7. LEASES The Organization leases facilities and land for its early childhood programs under non - cancelable operating lease agreements expiring through March 1, 2020. Total rental expense under these leases was $102,180 for the year ended June 30, 2013. In the event that funding for the early childhood programs is terminated, the Organization may cancel its land lease with a thirty day notice. The following is a schedule of minimum future rental payments under non - cancelable operating leases as of June 30, 2013: Year ending June 30, 2014 $ 41,814 2015 39,980 2016 30,636 2017 17,554 2018 17,554 Thereafter 29.257 Total $ 176,795 The Organization leases two properties to low- income individuals on a month to month basis for a combined monthly rental rate of $850. Under one of the lease agreements the tenant has an option to purchase the building and land under lease for $39,000. As of the date of our report, this option has not been exercised. Total rental income from these properties recognized in the statement of activities for the year ended June 30, 2013 was $9,930. 8. LONGTERM DEBT The Organization has a loan financed through a government agency with a face value of $1,558,695 and matures on April 26, 2052. Amounts borrowed under this agreement bear interest at a rate of 3.375 %. At June 30, 2013, $1,524,896 was outstanding under this loan agreement. The loan requires a reserve account to be funded annually in the amount of $7,160 until $71,591 is accumulated. At June 30, 2013, the Organization held $8,354 in restricted cash under this loan provision. For the year ended June 30, 2013, the Organization recognized interest expense in the amount of $50,428. The loan is secured by a deed of trust on the land and building at the Organization's headquarters. The loan includes a graduation clause, in which the Organization may be asked to pay the debt in full if it appears they can obtain other financing at reasonable terms. At June 30, 2013, the carrying amount of the land and building at the Organization's headquarters totaled $1,391,726. Future maturities of long -term debt are as follows: Year ending June 30, 2014 $ 20,126 2015 20,805 2016 21,507 2017 22,233 2018 22,983 Thereafter 1.417,242 Total $ 1.524.896 10