Annual Financial Report 12/31/1985

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1985 Note 6 - DEFERRED AD VALOREM TAX LEVIES - SPECIAL ASSESSMENT BOND ISSUE Certain special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or wholly by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. These future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. Alternatively, the City Council is required to levy any addi- tional taxes found necessary for the full payment of principal and interest. These future scheduled tax levies are not shown as assets of the special assessment funds in accordance with generally accepted accounting principles. Revenue from these tax levies is recognized annually as explained under "Property Tax Revenue Recognition ". Scheduled and actual debt service tax levies for general obligation special assessment bonds were and are as follows: Percent Levy /Collection Scheduled ActuO1 Levied 1982/83 $ 32,659 $ 32,658 100.00% 1983/84 36,244 -0- -0- 1984/85 36,262 -0- -0- 1985/86 41,182 -0- -0- 1986/87 44,815 1987/88 47,171 1988/89 49,073 1989/90 50,201 Note 7 - METROPOLITAN WASTE CONTROL COMMISSION During 1970, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. When the MWCC was formed, existing interceptor sewer lines and treatment facilities were transferred from the cities to the MWCC in exchange for future credits. The MWCC bills the City annually based upon estimated volume and budgeted costs. These billings are later adjusted when actual volume and actual costs are determined. The adjustment to actual is generally determined in the suc- ceeding calendar year and payable, by the City, in the second succeeding calen- dar year. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed (for estimated billings) and in the year the adjustments are determined (for adjustments from estimated to actual billings).