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- Honorable Mayor and Members of the City Council <br />City of Lino Lakes <br />Page 20 <br />Area and Unit Charge Fund <br />On January 11, 1988, the City Council approved Resolution 1 -88, which established the Area and Unit <br />Charge Fund for the City. The purpose of this fund is to collect various area and unit charges to be <br />- used to meet debt payments. Before October 1 of each year, the City estimates the required transfer <br />needed to meet debt payments for the subsequent year. In December, these estimated amounts are <br />transferred to the various debt funds. We recommend that the City continue to closely monitor actual <br />versus projected area and unit assessment collections to assure that debt payment requirements will <br />be met. <br />Designations of balances required for debt service is necessary to define discretionary construction <br />balances available to the City. The financing plan for the following bond issues have pledged area and <br />unit charges for the repayment of debt service: <br />• Improvement Refunding Bonds of 1992A <br />• Improvement Refunding Bonds of 1996A <br />• Water Revenue Bonds of 1992B <br />• Water Revenue Bonds of 1996B <br />The Improvement Bonds of 1992A have future scheduled property tax levies totaling $2,153,602. <br />However, the City charter prohibits the City from making a levy on this bond issue. The City has used <br />area and unit charges in lieu of tax levies to repay these bonds. <br />_ The Water Revenue Bonds of 1992B have future debt service requirements totaling $858,564 (principal <br />and interest). The City annually transfers amounts from the Area and Unit Charge Fund to the Water <br />Fund sufficient to cover the debt services of the 1992B Bonds. During 1999, revenues were sufficient in <br />the Water Fund to cover the debt service requirements and a transfer was not required. <br />It is the City's intention to repay the Water Revenue Bonds of 1992B and 1996B with revenues of the <br />Water Fund. If revenues are not sufficient to meet the debt requirements, funds will be transferred from <br />- the Area and Unit Charge Fund. <br />