Comprehensive Annual Financial Report 12/31/2003

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Nmwe G.O. tax supported debt G.O. special assessment debt G.O. revenue debt Total City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2003 CITY OF LINO LAKES' OUTSTANDING DEBT General Obligation and Revenue Bonds Governmental Business -Type Activities Activities $ 6,030,000 $ 12, 840,000 18,870,000 2,970,000 2,970,000 Total $ 6,030,000 12,840,000 2,970,000 $ 21,840,000 The City of Lino Lakes' total bonded debt increased by $735,550 (3 percent) during the current fiscal year. The key factor to the increase was the refunding of the 1996A Improvement bonds that will be called and retired in February, 2004. There were two new bonds issued in the current fiscal year, a $2,090,000 improvement bond and a $250,000 improvement bond. Both new issues are supported by special assessments levied upon benefited parcels. The City of Lino Lakes maintains an A2 rating from Moody's for general obligation debt. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES: • The unemployment rate for the City of Lino Lakes is currently 5.0 percent, which is an increase from a rate of 4.3 percent a year ago. This compares favorably to the state's average unemployment rate of 5.0 percent and the national average of 6.0 percent. • The City of Lino Lakes continues to see increased commercial /industrial construction growth. Residential growth continues to be robust albeit a few number of homes being built in the current year than in the last few years. • Property tax reforms and State budget deficits have significantly impacted local government aid payments the City of Lino Lakes receives. Local government aid and market value homestead credit was reduced to zero for 2003 and 2004. • Interest rates continue to fall over the past few years, and consequently the city's investment earnings have been reduced significantly. REQUESTS FOR INFORMATION: This financial report is designed to provide a general overview of the City of Lino Lakes' finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014. 18