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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2024 <br /> <br /> <br /> <br /> <br />Note 3 RECEIVABLES <br /> <br />A. LONG-TERM RECEIVABLES <br /> <br />Significant receivable balances not expected to be collected within one year of December 31, 2024 are as <br />follows: <br /> <br />Property Special <br />Taxes Assessments Leases <br />Receivable Receivable Receivable Total <br />Major Funds: <br /> General Fund $50,100 $ - $337,901 $388,001 <br /> Area and Unit Trunk - 799,688 - 799,688 <br /> MSA Construction - 1,544,193 - 1,544,193 <br />Nonmajor Funds - 373,400 1,099,288 1,472,688 <br /> Total $50,100 $2,717,281 $1,437,189 $4,204,570 <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- <br />cancelable for a period of 5 years, with two to four renewal periods of 5 years each at the lessee's option. <br />The City considers the likelihood of these options being exercised to be greater than 50%. The agreements <br />call for monthly lease payments between $1,855 and $3,570, with increases of 4% annually or 7.5% upon <br />exercising renewal options. The lease receivables are measured at the present value of the future minimum <br />lease payments expected to be received during the lease term at a discount rate of 5% which is based on the <br />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 <br />lease expires June 30, 2029, however, 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%. <br />The agreement calls for monthly lease payments of $6,785, with annual increases of 3% through the end of <br />the lease term. There are no renewal options stated in the lease agreement. The lease receivable is <br />measured at the present value of the future minimum lease payments expected to be received during the <br />lease term at a discount rate of 5%. <br /> <br />At December 31, 2024 the City recorded $1,583,577 in lease receivables and deferred inflows of resources <br />for these arrangements. <br /> <br />Total revenue recognized in relation to these leases is as follows: <br /> <br />2024 <br />Amortization of lease-related deferred inflows: <br />Antenna leases $72,713 <br />City Hall Complex lease 73,082 <br />Total revenue recognized resulting from deferred inflow amortization 145,795 <br />Interest revenue 83,077 <br />Common area maintenance charges 28,095 <br />Total revenue recognized in relation to leased assets $256,967 <br /> <br />58 <br />Page 94 of 353