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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2023 <br /> <br /> <br /> <br /> <br />B. LEASES RECEIVABLE <br /> <br />The City leases a portion of its water towers for cellular tower antenna sites. These leases are non-cancelable for a period of <br />5 years, with two to four renewal periods of 5 years each at the lessee's option. The City considers the likelihood of these <br />options being exercised to be greater than 50%. The agreements call for monthly lease payments between $1,855 and <br />$3,570, with increases of 4% annually or 7.5% upon exercising renewal options. The lease receivables are measured at the <br />present value of the future minimum lease payments expected to be received during the lease term at a discount rate of 5% <br />which is based on the rate available to finance equipment over the same time periods. <br /> <br />The City leases space within its City Hall Complex to New Creations Child Care and Learning Center. The lease expires <br />June 30, 2029, however, effective August 1, 2024 the City has the option to terminate the lease with at least 12 months <br />written notice. The City considers the likelihood of cancelling the lease agreement to be less than 50%. The agreement calls <br />for monthly lease payments of $6,785, with annual increases of 3% through the end of the lease term. There are no renewal <br />options stated in the lease agreement. The lease receivable is measured at the present value of the future minimum lease <br />payments expected to be received during the lease term at a discount rate of 5% which is based on the rate available to <br />finance equipment over the same time periods. <br /> <br />At December 31, 2023 the City recorded $1,735,564 in lease receivables and deferred inflows of resources for these <br />arrangements. <br /> <br />Total revenue recognized in relation to these leases is as follows: <br /> <br />2023 <br />Amortization of lease-related deferred inflows: <br />Antenna leases $91,278 <br />City Hall Complex lease 66,818 <br />Total revenue recognized resulting from deferred inflow amortization 158,096 <br />Interest revenue 69,169 <br />Common area maintenance charges 28,095 <br />Total revenue recognized in relation to leased assets $255,360 <br /> <br />Note 4 UNAVAILABLE REVENUE <br /> <br />Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be <br />available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable <br />revenue reported in the governmental funds are as follows: <br /> <br />Property Special <br />Taxes Assessments <br />Receivable Receivable Total <br />Major Funds: <br /> General Fund $76,537 ` $360 $76,897 <br /> G.O. Improvement Note of 2009A - 1,513,613 1,513,613 <br /> Area and Unit Trunk - 1,269,725 1,269,725 <br />Nonmajor Funds - 1,152,541 1,152,541 <br /> Total $76,537 $3,936,239 $4,012,776 <br /> <br />57 <br />64