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Note 5.
<br />CITY OF RAMSEY, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 1994
<br />LONG -TERM OBLIGATIONS (Continued)
<br />B. Description of Long -Term Debt
<br />All of the City's outstanding debt is general obligation debt backed by the full faith and credit of the City.
<br />* Tax Increment Bonds - These bonds are issued for redevelopment and economic development projects. The
<br />additional tax revenue resulting from increased assessed valuation of the properties is the major source of
<br />revenue used to retire the related debt.
<br />In 1993 the City issued General Obligation Tax Increment Refunding Bonds Series 1993A totaling
<br />$2,225,000. The proceeds of this bond issue will be used to refund the 1997 through 2007 maturities totaling
<br />$2,150,000 of the City's $2,800,000 General Obligation Tax Increment Bonds Series 1987A.
<br />The refunding was accomplished by means of a "crossover" mechanism. At the time of settlement, all
<br />proceeds were placed in an escrow account from which the interest on the Series 1993A Bonds will be paid.
<br />The City will continue to pay debt service on the Series 1987A Bonds through February 1, 1996, on which
<br />date the remaining principal will be paid from the escrow account and the City will crossover and pay the debt
<br />service on the Series 1993 A Bonds. This crossover refunding was undertaken to reduce total debt service and
<br />resulted in a total savings of $354,054 with a present value savings at issuance of $257,330.
<br />Special Assessment Bonds - These bonds were issued to finance various improvements and will be repaid
<br />primarily from special assessments levied on the properties benefitting from the improvements. However,
<br />some issues are partly financed by ad valorem levies.
<br />*
<br />Liability for Compensated Absences - The liability represents vested benefits earned by Governmental Fund
<br />employees through the end of the year which will be paid or used in future periods.
<br />C. Changes in Long -Term Debt
<br />Balance Balance
<br />1/1/94 Additions Retired 12/31/94
<br />General Obligation -
<br />Tax increment bonds 5,585,000 195,000 5,390,000
<br />Special assessment bonds 2,355,000 255,000 2,100,000
<br />Compensated absences 123,078 31,704 154,782
<br />$ 8,063,078 $ 31,704 $ 450,000 $ 7,644,782
<br />D. Minimum Debt Payments
<br />General obligation bond maturities are as follows:
<br />Year Principal Interest Total
<br />1995 $ 1,930,000 $ 369,885 $ 2,299,885
<br />1996 405,000 313,120 718,120
<br />1997 450,000 288,002 738,002
<br />1998 465,000 262,881 727,881
<br />1999 475,000 236,664 711,664
<br />2000 -2007 3,765,000 968,257 4,733,257
<br />$ 7,490,000 $ 2,438,809 $ 9,928,809
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