Annual Financial Report 12/31/1988

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CITY OF LINO LAKES, MINNESOTA Page 17 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1988 NOTE 4 "MEMORANDUM ONLY" PRESENTATIONS Presented in these financial statements are certain amounts labeled "memorandum only ". The reader is cautioned that this information has certain limitations as follows: (1) The "Total" columns of the various combined statements present combining of unlike purpose funds and cannot be construed to be indicative of the overall financial position of the City. (2) Prior year "Total" columns likewise may combine unlike purpose funds (as in 1 above) and additionally do not present detail components by fund group (as is presented for current year totals) and therefore, are incomplete presentations of prior year statements of financial position, results of operations and changes in financial position of the various funds of the City as established by generally accepted accounting principles. Statements of Revenue, Expenditures and Changes in Fund Balance compared to budget present prior year actual amounts. These amounts are incomplete presentations in that prior year budget amounts are not included in conformance with generally accepted accounting principles. (3) NOTE 5 DEFERRED TAX LEVIES - GENERAL BONDED DEBT General obligation bonded debt of all Minnesota cities is issued in accordance with State Statutes. When a bond issue to be fmanced by an ad valorem tax levy 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 financing. Alternatively, the City Council is required to levy any additional taxes found necessary for the full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying fmancial statements 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 the general obligation debt were and are scheduled to be as follows: Levy /Collection Scheduled Actual Percent Levied 1987/88 $126,428 $117,000 92.54% NOTE 6 DEFERRED TAX LEVIES - GENERAL DEBT WITH SPECIAL ASSESSMENTS PLEDGED, 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 benefited properties. When the 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 is required to levy any additional taxes found necessary for the full payment of principal and interest. 1 1