Annual Financial Report 12/31/1986

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CITY OF LINO LAKES, MINNESOTA Page 12 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) CITY INDEBTEDNESS (Continued) 1 1 1 The payment of City bonds is made through various agents (banking institutions). Cash is paid to the paying agents and they in turn pay principal and interest to the various bond holders. Cash on hand with the paying agent is not included in these financial statements. On November 24, 1986, the City issued the $475,000 General Obligation Improvement Bonds Series 1986A dated December 1, 1986. The settlement of the Bonds took place on January 8, 1987. The liability for this issue is recorded in these financial statements. The proceeds were recorded as an asset at December 31, 1986. $320,000 of this issue is to refund a portion of the 1982 Improvement Bonds. The principal maturing in the years 1989 through 1991 totaling $375,000 will be called for prepayment on February 1, 1987. LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Lino Lakes legal debt margin for 1986 and 1985 is computed as follows: December 31, 1986 1985 Assessed value (after fiscal disparities) $29,012,600 $26,421,368 Debt limit (7 -1/3% of assessed value) $ 2,127,591 $ 1,937,567 1 1 1 1 1 1 1 1 Amount of debt applicable to debt limit: Total bonded debt $ 3,126,820 $ 2,801,640 Less: Special assessment bonds and proprietary bonds 3,054,320 2•,694,140 Less: Cash and investments in debt service funds 292 Total debt applicable to debt limit $ 72,500 $ 107,208 Legal debt margin $ 2,055,091 $ 1,830,359 Legal debt margin is calculated on general obligation bond issues only (i.e., this does not include Special Assessment or Revenue /Enterprise Fund bonded debt). 1 1 1 1