Comprehensive Annual Financial Report 12/31/2004

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Note 10 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General Obligation bond issues sold by the City are fmanced by ad valorem tax levies and 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 completely 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. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2004. Future scheduled tax levies for all bonds outstanding at December 31, 2004 totaled $11,407,796. Note 11 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY At December 31, 2004 and 2003, the City had designated and reserved portions of its various fund equities through legal restriction and City Council authorization. Major fund equity appropriations at December 31, 2004 and 2003 are shown on the various balance sheets as segregations of the fund equity. A summary of such designations is as follows: December 31, 2004 2003 General Fund: Reserved for prepaid items $ 142,492 $ 133,921 Designated for cash flow reserve 5,067,973 4,775,969 Special Revenue Fund: Reserved for prepaid items 1,718 1,759 Designated for recreation purposes 57,818 32,704 Debt Service Funds: Reserved for debt retirement 2,556,300 2,482,184 Capital Projects Funds: Reserved for advance to other funds 957,112 957,112 Reserved for land held for resale 989,506 Designated for capital improvements 5,023,690 9,935,876 Note 12 SHARE IN GAS FRANCHISE PROFITS The City receives a share of the gross billing for natural gas sales by a neighboring City, which provides service within the City of Lino Lakes. The amount reported as revenue in the General Fund during fiscal year 2004 was $93,935. 49