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<br />CITY OF ELK RIVER, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />DECEMBER 31, 2010
<br />Note 3: DETAILED NOTES ON ALL FUNDS -CONTINUED
<br />The lease revenue bonds were used for the construction of city hall and a public safety building and the expansion of
<br />city hall.
<br />The special assessment bonds are used to finance assessable improvements within the City. The bonds are payable
<br />primarily from special assessments levied against properties benefited by the improvements. In addition, the bonds
<br />are general obligations of the City and are backed by its full faith and credit.
<br />The tax increment bonds are used to finance land acquisition and other public costs to facilitate development within
<br />the tax increment district. The bonds are payable from tax increment revenues generated by existing and new
<br />development within the district. In addition, the bonds are general obligations of the City and are backed by its full
<br />faith and credit.
<br />' The certificates of indebtedness are used to finance the purchase of capital equipment. The certificates are general
<br />obligations backed by the full faith and credit of the City.
<br />For the governmental activities, the City also entered into a capital lease to finance the purchase of capital equipment and
<br />' contracts for deeds were used to finance the acquisition of park property. Compensated absences are generally liquidated
<br />through the General fund.
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<br />For the business-type activities, the general obligation revenue bonds are used to finance the acquisition and construction
<br />of major capital facilities. The bonds are payable from net revenues of the benefiting enterprise fund but are backed by
<br />the full faith and credit of the City. The City also issued a promissory note to provide for the construction of a landfill
<br />gas generator. The note is to be paid from revenue of the system and is secured by the facility.
<br />On Apri121, 2010, the City issued $7,370,000 of G.O. Capital Improvement Plan Bonds, Series 2010A, bearing an
<br />average coupon rate of 3.57 percent, to provide resources for the advance refunding of $5,840,000 of the Public Safety
<br />Building Lease Revenue Bonds, Series 2002A and $1,270,000 of the City Hall Expansion Revenue Bonds, Series
<br />2002B, which will be redeemed on February 1, 2013 The proceeds of the Series 2010A Bonds were deposited into an
<br />escrow account which shall pay the principal and interest on the Series 2002A and Series 2002B Bonds due Apri121,
<br />2010 through February 1, 2013 and pay the principal being called on February 1, 2013. The transaction resulted in a
<br />reduction of $325,734 of future debt service payments, which is a present value savings of $284,826.
<br />The HRA entered into a contract for deed for the purchase of property for subsequent resale for redevelopment purposes.
<br />A. Fund Balance Classification
<br />At December 31, 2010, a summary of the governmental fund balance classifications are as follows:
<br />' Nonspendable:
<br />Prepaid items
<br />Other
<br />General Improvement Governmental
<br />Fund Projects Funds Total
<br />$ - $ - $ 93,080 $ 93,080
<br />' Restricted for:
<br /> Debt service $ - $ - $ 3,400,239 $ 3,400,239
<br /> Landfill mitigation = _ 1,478,516 1,478,516
<br />' Economic development 2,056,698 2,056,698
<br /> Law enforcement - - 660 660
<br /> Total restricted - - 6,936,113 6,936,113
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