June 30,1999
Note 22 Commitments and
Contingencies
- Commitments
At June 30, 1999, the State, including its component
units, had the following outstanding commitments:
- Infrastructure (highways, roads, etc.) and other construction contracts
and miscellaneous contracts with various vendors totaling approximately $1,402.3 million
of which $877.3 million is expected to be reimbursed by Federal Grants.
- School construction and alteration grants with various towns for $885
million and interest costs of $324 million for a total of $1,209 million. Funding for
these projects is expected to come from bond sales.
- Loan commitments, mortgage and grant programs, and loan guarantees total
approximately $378.3 million. Funding for these programs is expected to come from bond
sales.
- Contingent Liabilities
The State, in May, settled a lawsuit for $17 million
which charged that the state police violated the constitutional rights of thousands people
by taping phone calls from 1978 to 1989. The state has $12 million available, which has
been appropriated from the June 30, 1999 surplus, while insurance companies covering the
State during that period will pay $5 million. In December, the state began accepting
claims from individuals who may collect up to approximately two thousand dollars depending
on the type and number of incidents. However, at this time it can not be determined how
much money the state will finally expend although the maximum state exposure would be
limited to is $12 million.
The State has entered into a contractual agreement with
H.N.S. Management Company, Inc. and ATE Management and Service Company, Inc. to manage and
operate the bus transportation system for the State. The State shall pay all expenses of
the system including all past, present and future pension plan liabilities of the
personnel employed by the system and any other fees as
agreed upon. When the agreement is terminated the State shall assume or make arrangements
for the assumption of all the existing obligations of the management companies including
but not limited to all past, present and future pension plan liabilities and obligations.
- Litigation
The State, its units and employees are parties to
numerous legal proceedings, many of which normally occur in government operations. Most of
these legal proceedings are not, in the opinion of the Attorney General, likely to have a
material adverse impact on the State's financial position.
There are, however, several legal proceedings
which, if decided adversely against the State, may require the State to make material
future expenditures for expanded services or capital facilities or may impair future
revenue sources. It is neither possible to determine the outcome of these proceedings nor
to estimate the possible effects adverse decisions may have on the future expenditures or
revenue sources of the State.
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