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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2014 <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 November 2014, the City issued General Obligation Bonds of $2,645,000 to fund various street and utility <br />improvements within the City and improvements to the City's water system, including construction of a new well <br />and well house. Approximately $1,510,000 of special assessments are expected to be filed related to the <br />improvement portion of the bond. Net revenues of the City's water utility will repay the additional bond <br />indebtedness. The bond was issued at a rate of 0.40%. The bonds will mature in 2026. <br />Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund <br />employees through the end of the year which will be paid or used in future periods. For the governmental activities, <br />compensated absences and other postemployment benefit liability are generally liquidated by the general fund. The <br />liability for Proprietary Fund employees is included in the accrued liabilities of those funds. <br />Note 5 LEGAL DEBT MARGIN <br />The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally <br />from property taxes. The City of Lino Lakes' legal debt margin for 2014 is computed as follows: <br />50 <br />12/31/2014 <br />Market Value <br />$ 1,509,921,169 <br />Applicable Percentage <br />3.0% <br />Debt Limit <br />45,297,635 <br />Amount of Debt Applicable to Debt Limit: <br />Total Bonded Debt <br />16,676,000 <br />Less: Special Assessment Bonds <br />(7,445,000) <br />Tax Abatement Bonds <br />(2,080,000) <br />Utility Revenue Bonds <br />(195,000) <br />Tax Increment Financing Bonds <br />(2,765,000) <br />Total Debt Applicable to Debt Limit <br />4,191,000 <br />Legal Debt Margin <br />$ 41,106,635 <br />50 <br />