1998 CAFR - Laserfiche WebLink

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During 1991, the City entered into a private development agreement for an area referred to as the Cedar Hills and consisted of three subdivisions. Contemplated in the development agreements was reimbursement to each of the developers for special trunk assessments incurred during construction. Thevehicle used for this reimbursement is called a tax increment revenue note. These. notes provide for the payment of principal and interest (8%) up to the lessor of the principal amount of the note, or 97% of available tax increments. Payments from available increments are applied first to accrued interest and then to principal balances. If increments received through 1998 are not sufficient to pay off each developer, the note will be retired anyway. Any excess increments received after 1998 can be retained by the City. The City entered into two additional limited revenue taxable tax increment notes during 1996. These notes, which are the result of a joint effort to develop and market the Anoka Electric Cooperative Business Park, are payable to the developer from increments generated in the business park. Principal and interest payments begin on December 15,1999, and continue through December 15, 2005, at which time the district expires. The City entered into two limited revenue taxable tax increment notes in 1997 and 1998 to further develop and market the Anoka. Electric Cooperative Business .Park. These notes are payable to the developer from increments generated in the business park.. Principal and interest payments will begin on December 15, 2000, and payments are scheduled to end on December 15, 2005. Any increments received after this date will be retained by the City. The outstanding principal balance on these notes at December 31, 1998, was $736,961. This amount is not included in long-term debt due to the nature of payment of the notes and the unsurety of collection of tax increments. Included in current liabilities for the year ended December 31,1998, is $58,716, which represents the portion of increments collected in 1998 that were payable to the developers on February 1, 1999. These payments are recorded as capital outlay as they represent a payment for trunk infrastructure contributed by .the developers. As of December 31, 1998, the City had outstanding $4,580,000 of Tax Increment Financing Bonds which had been issued for the purpose of constructing public improvements and assisting developers with site improvements within the tax increment project areas. Although the City pledges its full faith and taxing power for these bonds, it is anticipated that all bonds will be paid solely from annual increments received. FINANCIAL SECTION GENERAL FUND The General Fund is the general operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund. General Fund revenues and other financing sources (including transfers for 1998), totaled $5,051,963 an increase of $820,973, or 19.4% over the prior year. Expenditures and other financing sources (including transfers), totaled $4,402,352 an increase of $183,738 or 4.78% over 1997 levels. The. fund balance in the General Fund is used to provide working capital for the fund until property tax and state aid settlements, which are received periodically throughout the year, are collected. During 1992, policy had been established that provided the level ofthe undesignated-reserved for working capital portion of fund balance at 50% of the next years' adopted budget with the remaining portion, not restricted or reserved for other purposes, as unreserved-undesignated. During 1993, the policy was expanded to cover the distribution of excess or deficient revenues in the General Fund at year end and established the level of the unre- served-undesignatedpnrtion of fund balance at 10% of the next years' operating budget, which would be used to provide for unknown events which could have an adverse effect on the fund in future years. -xi-