Management Report and Recommendations 12/31/1991

Home Search

City of Lino Lakes, Minnesota Management Report, Page 21 DEBT SERVICE FUNDS The combining financial statements for the Debt Service Funds are presented in Statements 10 and 11 of the 1991 Annual Financial Report. Debt Service Funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt (other than Enterprise Fund debt). Debt Service Funds may have one or a combination of the following revenue sources pledged to retire debt as follows: • property Taxes. Primarily for general City benefit projects such as parks and municipal buildings. Property taxes may also be used to fund special assessment bonds which are not fully assessed. • Tax Increments. Pledged exclusively for tax increment/economic development districts. • Capitalized Interest Portion of Bond Proceeds. After the sale of bonds, the project may not produce revenue (tax increments or special assessments) for a period of one to two years. Bonds are issued with this timing difference considered in the form of capitalized interest. • Special Assessments. Charges to benefited properties for various improvements. In addition to the preceding pledged assets, other funding sources may be received by Debt Service Funds as follows: • Residual Project Proceeds from the Capital Project Fund • Investment Earnings • State or Federal Grants • Transfers from Other Funds Pledged assets may be divided into three categories: 1) Recorded as fund assets with the revenue deferred until collected (levied assessments and levied taxes); 2) Actually received by the fund and included in fund balances (collected assessments, interest, bond proceeds, etc.); and, 3) Future pledged assets not recorded as assets but intended to be collected at a future date (scheduled property taxes and estimated tax increment collections).