LEASES AND CAPITAL COMMITMENTS NOTE 7
NOTE 7 Leases and Capital Commitments Lessee Arrangements The MDTA has entered into a lease agreement, as the lessee, for office space. Engineering Office Space – White Marsh
In January 2018, the MDTA entered into a ten-year lease for office space for MDTA engineering employees. The lease contains one five-year renewal option to be exercised at the MDTA’s discretion. The MDTA has included the renewal period in the lease term as it is reasonably likely that the renewal option will be exercised. The terms of the renewal period are to be negotiated. As such, the present value of the lease payments for the renewal period are estimated. The lease arrangement does not contain any material residual value guarantees. The MDTA used its incremental borrowing rate to discount the lease payments. The right-to-use assets acquired through outstanding leases are shown below.
Asset Held Under Lease $ 1,606
Accumulated Amortization $ 385
Asset Class Building
Lease Asset, net $ 1,221
Future Principal and Interest Lease Payments The net present value of the future minimum lease payment obligations as of June 30, 2024, were as follows:
Year Ended June 30, 2025 2026 2027 2028 2029 2030-2034 Total
Principal
Interest
Total
$
115 118 122 125 138 714
$
38 35 31 28 24 50
$
153 153 153 153 162 764
$
1,332
$
206
$
1,538
Lessor Arrangements Resource Sharing Agreements
The MDTA has entered into resource sharing agreements with private companies for the non-exclusive, long-term right to install, operate, and maintain communications systems on its property in exchange for monetary compensation. The initial terms vary; however, many leases have initial terms of five years and contain one or more renewal periods, at the MDTA’s discretion, generally for five-year periods. The MDTA has included these renewal periods in the lease term if it believes that are reasonably certain to be exercised. Certain leases provide for increases in future annual rental payments based sub-lease revenue earned by the lessee. The lease arrangements do not contain any material residual value guarantees. The MDTA utilized its incremental borrowing rate to discount the lease payment terms.
Annual Comprehensive Financial Report For Fiscal Year Ended June 30, 2024 | 67
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