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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2013 <br />Note 4 CITY INDEBTEDNESS (CONTINUED) <br />Description and Restrictions of Long -Term Debt (Continued) <br />Revenue Bonds — These bonds were issued to finance various improvements in the water fund and will be repaid <br />primarily from pledged revenues derived from the constructed assets. <br />In July 2013, the City issued General Obligation Improvement Bonds of $615,000 to fund the Otter Lake Extension <br />project. The $615,000 is being funded by special assessments related to the improvement project that the City has <br />collected. The bond was issued at a rate of 1.25%. The bonds will be called in 2024. <br />Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund <br />employees through the end of the year which will be paid or used in future periods. For the governmental activities, <br />compensated absences and other postemployment benefit liability are generally liquidated by the general fund. The <br />liability for Proprietary Fund employees is included in the accrued liabilities of those funds. <br />Note 5 LEGAL DEBT MARGIN <br />The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally <br />from property taxes. The City of Lino Lakes' legal debt margin for 2013 is computed as follows: <br />c <br />12/31/2013 <br />Market value <br />$ 1,519,857,242 <br />Applicable percentage <br />3.0% <br />Debt Limit <br />45,595,717 <br />Amount of debt applicable to debt limit: <br />Total bonded debt <br />15,585,000 <br />Less: Special assessment bonds <br />(5,720,000) <br />Tax abatement bonds <br />(2,220,000) <br />Utility revenue bonds <br />(255,000) <br />Tax increment financing bonds <br />(3,110,000) <br />Total debt applicable to debt limit <br />4,280,000 <br />Legal debt margin <br />$ 41,315,717 <br />c <br />