Management Report and Recommendations 12/31/1983

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City of Lino Lakes Management Report, Page 30 Special Assessment Debt Service Projections The City has special assessment bonds outstanding at December 31, 1983 which total $1,035,280. This is a major area of financial management of the City. Special Assessment Debt Service Funds are established by bond sale resolutions and must exist throughout the period in which bonds are outstanding. During that period, these funds collect revenues to pay the bond principal and interest in a timely manner. The primary source of revenue for these funds is special assessments to benefiting property owners. These assessments recover construction costs over the term of the assessment roll plus interest at specified rates. In addition to special assessment revenue, these funds commonly collect property taxes, interest on investments, and other designated revenues. Debt service payments are scheduled without variance. All revenue sources, however, are based on estimates at the date of the bond sale. In packaging a bond sale, the fiscal agent must attempt to predict the amount and timing of future assessment rolls. As circumstances change, the actual results may significantly alter the financial posi- tion of the debt service fund. Examples of changes to original estimates might be: • A decision of the City to not fully assess a project. • A decision by the City to defer special assessments for unusual circumstances. • Other deferrals of special assessments (senior citizens, 10 year, etc.) • The delinquency rate of special assessments. • The interest rate realized on available cash balances. • The timing of the adoption of the assessment roll. • City share of improvement costs. All of these factors and other factors will change the original projected outcome of each special assessment debt service fund. For these reasons, it is essential to re- evaluate the projected financial position of special assessment debt service funds. A procedure to evaluate this is through the preparation of a Special Assessment Debt Service Study. Our office has an electronic data processing program to expedite the process and at the same time present scenarios based on multiple variables (i.e., special.