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CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />3. Detailed Notes on All Funds (Continued) <br />D. Long -Term Debt (continued) <br />The City has entered into a joint powers agreement with Independent School District Number <br />624 (ISD #624) to issue tax abatement bonds for the City's and School District's portion of the <br />costs related to the construction of certain County Roads within the City and School District. <br />The roads constructed are the property of Washington County. Amounts paid for the road <br />construction from the proceeds of the tax abatement bonds represent the City of Hugo's and <br />ISD #624's portion of the project costs. Since the roads are owned by the County, the City has <br />not recorded capital assets related to the County Road expenditures. The bonds were issued <br />by the City and accordingly are included in noncurrent liabilities on the City's Statement of Net <br />Position. The School District is responsible for the repayment of 50% of the principal and <br />interest owed on the bonds. Therefore, the City has recorded a due from the School District on <br />the Statement of Net Position for 50% of amounts expended for the project. <br />Crossover Refunding <br />In 2013, the City issued $5,835,000 General Obligation Refunding Bonds, Series 2013 with <br />interest rates ranging from 0.50 to 1.15%. The bonds were issued to crossover refund General <br />Obligation Bonds, Series 2004A and General Obligation Tax Abatement Bonds, Series 2005A <br />with interest rates of 3.5% - 4.5%. The net proceeds of the refunding bonds were deposited <br />into an irrevocable trust to provide for future debt service payments on the refunded bonds. <br />This advance refunding was undertaken to reduce total debt service payments by $335,023 <br />over the next 7 years. The net present value of the reduction in debt service payments for this <br />refunding was determined to be $318,668. The 2004A and 2005A bonds were refunded during <br />2015. <br />Debt Service Requirements <br />Debt service requirements to maturity for long-term debt, excluding compensated absences, as <br />of December 31, 2015 were as follows: <br />50 <br />General Obligation <br />Debt <br />Year <br />Principal <br />Interest <br />2016 <br />$ 1,570,000 <br />$ 126,235 <br />2017 <br />1,625,000 <br />106,243 <br />2018 <br />1,680,000 <br />83,058 <br />2019 <br />1,615,000 <br />58,403 <br />2020 <br />1,675,000 <br />32,636 <br />2021-2025 <br />540,000 <br />42,026 <br />2026-2027 <br />90,000 <br />2,700 <br />$ 8,795,000 <br />$ 451,301 <br />50 <br />