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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2013 <br /> <br />50 <br /> <br />Note 4 CITY INDEBTEDNESS (CONTINUED) <br />Description and Restrictions of Long-Term Debt (Continued) <br /> <br />Revenue Bonds – These bonds were issued to finance various improvements in the water fund and will be repaid <br />primarily from pledged revenues derived from the constructed assets. <br /> <br />In July 2013, the City issued General Obligation Improvement Bonds of $615,000 to fund the Otter Lake Extension <br />project. The $615,000 is being funded by special assessments related to the improvement project that the City has <br />collected. The bond was issued at a rate of 1.25% . The bonds will be called in 2024. <br /> <br />Liability for Compensated Absences – This liability represents vested benefits earned by governmental fund <br />employees through the end of the year which will be paid or used in future periods. For the governmental activities, <br />compensated absences and other postemployment benefit liability are generally liquidated by the general fund. The <br />liability for Proprietary Fund employees is included in the accrued liabilities of those funds. <br /> <br /> <br />Note 5 LEGAL DEBT MARGIN <br />The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally <br />from property taxes. The City of Lino Lakes’ legal debt margin for 2013 is computed as follows: <br /> <br />12/31/2013 <br />Market value 1,519,857,242$ <br />Applicable percentage 3.0% <br />Debt Limit 45,595,717 <br />Amount of debt applicable to debt limit: <br />Total bonded debt 15,585,000 <br />Less: Special assessment bonds (5,720,000) <br /> Tax abatement bonds (2,220,000) <br /> Utility revenue bonds (255,000) <br /> Tax increment financing bonds (3,110,000) <br /> Total debt applicable to debt limit 4,280,000 <br />Legal debt margin 41,315,717$ <br />