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NOTES TO FINANCIAL STATEMENTS
<br />December 31, 1995
<br />Note 5. 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 pre - crossover interest on the Series 1993A Bonds
<br />will be paid. The City will continue to pay debt service on the Series 1987A Bonds through February 1,
<br />1996, on which date the remaining principal will be paid from the escrow account and the City will
<br />crossover and pay the debt service on the Series 1993A Bonds. This crossover refunding was undertaken to
<br />reduce total debt service and resulted in a total savings of $354,054 with a present value savings at issuance
<br />of $257,330.
<br />* Special Assessment Bonds - These bonds were issued to fmance 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 fmanced by ad valorem levies.
<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 />1/1/95 Additions Retired 12/31/95
<br />General Obligation -
<br />Tax increment bonds $ 5,390,000 $ 2,600,000 $ 220,000 $ 7,770,000
<br />Special assessment bonds 2,100,000 • 1,710,000 390,000
<br />Compensated absences - Net 154,782 8,988 163,770
<br />D. Minimum Debt Payments
<br />General obligation bond maturities are as follows:
<br />CITY OF RAMSEY, MINNESOTA
<br />$ 7,644,782 $ 2,608,988 $ 1,930,000 $ 8,323,770
<br />Year Principal Interest Total
<br />1996 $ 500,000 $ 446,405 $ 946,405
<br />1997 540,000 417,080 957,080
<br />1998 560,000 387,656 947,656
<br />1999 575,000 356,806 931,806
<br />2000 535,000 326,693 861,693
<br />2001 -2010 5,450,000 1,398,095 6,848,095
<br />$ 8,160,000 $ 3,332,735 $ 11,492,735
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