Management Report and Recommendations 12/31/1987

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City of Lino Lakes, Minnesota Management Report, Page 21 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 Increment. 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 con- sidered in the form of capitalized interest. - Special Assessments. Charges to benefited properties for various improvements. In addition to the above 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. - Connection charges. 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). New reporting standards have been implemented for the City of Lino Lakes whereby the Special Assessment Fund type has been eliminated. Such funds are now combined with the City's Debt Service Fund. The diverse nature of the type of debt included in the same fund type requires careful analysis to determine the adequacy of the fund balance and projected fund balance. The following schedule extracts information from several sec- tions of the Annual Financial Report to assist in this analysis.