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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />N <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />N <br />1 <br />1 <br />1 <br />CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2010 <br />Note 4 CITY INDEBTEDNESS (CONTINUED) <br />In December 2009, the City of Lino Lakes entered into a joint powers agreement for a note payable with Anoka <br />County for $4,260,000. The note payable with Anoka county is for the reconstruction of County State Aid Highway <br />14 (Main Street) and I -35E Interchange County Project. <br />In June 2010, the City issued $1,000,000 in General Obligation Improvement and Utility Revenue Refunding Bonds <br />for a net interest cost of 2.65% to complete a current refunding of the outstanding 2004A General Obligation <br />Improvement and Utility Revenue Bonds totaling $965,000. The $1,000,000 is being funded by special assessments <br />related to the imporvement project that the City has collected. The current refunding resulted in a cash flow savings <br />of $34,805 with a net present value of $31,415. The original bonds had been issued to fund various assessable <br />public projects from 2004, and were called on June 1, 2010. <br />Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund <br />employees through the end of the year which will be paid or used in future periods. For the governmental activities, <br />compensated absences are generally liquidated by the general fund. The liability for Proprietary Fund employees is <br />included in the accrued liabilities of those funds. <br />Note 5 LEGAL DEBT MARGIN <br />The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally <br />from property taxes. The City of Lino Lakes' legal debt margin for 2010 is computed as follows: <br />12/31/10 <br />Market value $ 2,001,889,600 <br />Applicable percentage 3.0% <br />Debt Limit 60,056,688 <br />Amount of debt applicable to debt limit: <br />Total bonded debt 20,111,000 <br />Less: Special assessment bonds (9,175,000) <br />Tax abatement bonds (2,460,000) <br />Utility revenue bonds (420,000) <br />Tax increment financing bonds (3,875,000) <br />Revenue bonds (795,000) <br />Total debt applicable to debt limit 3,386,000 <br />Legal debt margin $ 56,670,688 <br />48 <br />