1996 CAFR - Laserfiche WebLink

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DEBT ADMINISTRATION~continuedl The City has a current Moody's Investors Service bond rating of A1, which was last increased during 1993. This above average rating has had a positive effect on the sale of the City's bonds by broadening the City's market and lowering the interest rates on borrowing. TAX INCREMENT DISTRICTS The City has two development districts that were created in accordance with State Statute 472. Within these 1 districts are six tax increment financing districts, three of which are for redevelopment and three for economic development. These tax increment financing districts capture increments from residential and commercial development that occur within the districts. ' During 1991, the City entered into private development agreements for an area referred to as the Wood Pond Projects and consisted of three subdivisions. Contemplated in the development agreements was reimbursement to each of the developers for special trunk assessments incurred during construction. The vehicle used for this ' reimbursement is called a tax increment revenue note. These notes provide for the payment of prinicipal 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 the year 1999 are not sufficient to pay off each developer, the note will be retired anyway. Any excess increments received can be directed by the City to district expenses. 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, 1998, and continue through December 15, 2005, at which time the district expires. 1 The outstanding principal balance on these notes at December 31, 1996, was $692,839. 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, 1996, is $197,187, which represents the portion of increments collected in 1996 that were payable to the developers on February 1, 1997. These payments are recorded as capital outlay as they represent a payment for trunk infrastructure contributed by the developers. ' As of December 31, 1996, the City had outstanding $5,315,000 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. All bonds are payable 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 1996), totaled $3,950,668, an increase of $535,750, or 15.7 percent over the prior year. Expenditures and other financing sources (including transfers), totaled $3,799,649, an increase of $613,935, or 19.3 percent over ' 19951evels.