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NOTE 13 — TAX ABATEMENT AGREEMENTS (CONTINUED) The outstanding principal balance as of December 31, 2016 for all of these agreements was $3,207,707. This amount is not included in long-term debt because of the nature of these notes in that repayment is required only if sufficient tax increments are received. The City's position is that these are obligations to assign future and uncertain revenue sources and these obligations are not actual debt in substance. NOTE 14 — DEPOSITS PAYABLE Platting and performance deposits are accounted for in the City's Agency Fund. A summary of the 2016 changes in deposits is as follows: Total deposits pavable at January 1, 2016 Add deposits received Less payments from deposit account $ 1.734.077 2.093.979 (1,736,296) Total deposits pavable at December 31, 2016 $ 2.091.760 NOTE 15 — INDUSTRIAL AND LEASE REVENUE BONDS From time to time, the City has issued Industrial Revenue Bonds and Lease Revenue Bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. Neither the City, the state of Minnesota, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2016, there was one series of Industrial Revenue Bonds and one Lease Revenue Bond outstanding with aggregate principal amounts payable of $2,090,000 and $10,080,000 respectively. NOTE 16 — COMMITMENTS AND CONTINGENCIES A. Commitments for Construction At December 31, 2016, the City is committed to various construction contracts for the improvement of city property. The City's remaining commitment under these contracts is $109,858. The City has resources available to cover these commitments. B. Federal and State Revenue Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. 91