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CITY OF RAMSEY Notes to Financial Statements (continued) December 31, 1999 NOTE 5 -LONG-TERM DEBT {CONTINUED) C. Minimum Debt Payments Minimum annual principal and interest payments required to retire long-term debt, not including compensated absences are as follows: Special Tax Lease Year Ending December 31 Assessment Bonds Increment Bonds Revenue Bonds 2000 $ 47,558 $ 564,606 $ 58,690 2001 25,656 590,033 127,175 2002 - 701,145 140,105 2003 - 698,608 142,545 2004 - 709,564 139,815 Thereafter - 3.693.459 2.136.358 73,214 6,957,415 2,744,688 Less amount representing interest 3214 1.567.415 1.079.688 $ 70,000 $ 5,390,000 $ 1,665,000 D. Descriptions and Restrictions of Long-Term Debt All of the City's outstanding debt is general obligation debt backed by the full faith and credit, of the City, except for the Lease Revenue Bonds which are obligations of Economic Development Authority of Ramsey. ° Special Assessment Bonds -These bonds were issued to finance various improvements and will be repaid primarily from special assessments levied on the properties benefitting from the improvements. However, some issues are partly financed by ad valorem levies. ° Tax Increment Bonds -These bonds are issued for redevelopment and economic development projects. The additional tax revenue resulting from increased assessed valuation of the properties is the major source of revenue used to retire the related debt. The Tax Increment Bonds, Series 1999A will be funded by operating rental income from the Senior Housing Project if sufficient, with tax increments being pledged as the second source of funding. Lease Revenue Bonds -These bonds were issued by the Economic Development Authority (EDA) of Ramsey for the purpose of~financing the construction of a fire station. Pursuant to Minnesota Statutes § 471.64, Subd. 1 and § 465.71, lease-purchase contracts between the EDA and the City, and a Trust Indenture between the EDA and U.S. Bank Trust have been established. The bonds are special obligations of the City as issuer and owner of the land and building. The City has pledged rental payments in amounts equal to the debt service requirements and plans to annually appropriate City funds available for this purpose. Minnesota Statutes § 475.50, Subd. 5(e), allows cities to make a special levy (outside of levy limits) to pay principal and interest on bonds of another political subdivision. Through the transactions described above, the City (Primary Government) has, in substance, assumed the debt service on the revenue bonds issued by the EDA. Therefore, the bonds have been included in the City's General Long-Term Debt Account Group. -25-