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CITE'OF ELK RIVER,MINNESOTA
<br /> NOTES TO FINANCIAL STATEMENTS
<br /> DECEMBER 31,2012
<br /> Note 4: OTHER INFORMATION CONTINUED
<br /> G. Conduit Debt Obligations
<br /> From time to time,the City has issued revenue bonds to provide financial assistance to private-sector entities for the
<br /> acquisition and construction of industrial and commercial,multi-family and educational facilities deemed to be in the
<br /> public interest. The bonds arc secured by the property financed and are payable solely from payment received from the
<br /> benefited entity. Neither the City,the State,nor any political subdivision thereof is obligated in any manner for
<br /> repayment of the bonds. Accordingly,the bonds are not reported as liabilities in the accompanying financial statements.
<br /> As of December 31,2012,there were seven series of revenue bonds outstanding,with an aggregate principal payable
<br /> amount of$23,950,191,
<br /> H. Commitments
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<br /> The City has received notice from their power supplier regarding the existing all requirements power contract exercising
<br /> their right to give ten years notice to cancel the contract. The cancellation date would be effective September 30,2018.
<br /> The process has begun to renegotiate the existing contract,or contract with another supplier.
<br /> In 2007 the City entered into an agreement with Central Minnesota Municipal Power Agency(CMMPA)to acquire an
<br /> interest in the CAPX Initiative Brookings Project,a 250 mile new power transmission line between Brookings, South
<br /> Dakota,and the Twin Cities. In 2011 there was increased opportunity for investment,and subsequent agreements
<br /> provide an ownership share of$5.6 million or 18.9%. The return on this investment through CMMPA is designed to
<br /> provide approximately$124,000 annually over the 40 year project life. The interim financing of the CAPX-Brookings
<br /> project was closed February 2012 and the principal amount of this note was paid off with pennanent financing.
<br /> I. Change in Accounting Principle
<br /> During fiscal year 2012,the City implemented several new accounting pronouncements issued by the Government
<br /> Accounting Standards Board(GASB),including Statement No. 63, "Financial Reporting of Deferred Outflows of
<br /> Resources,Deferred Inflows of Resources, and Net Position"and Statement No. 65, "Items Previously Reported as
<br /> Assets and Liabilities". These standards required a retroactive implementation which resulted in the restatement of
<br /> beginning balances in the December 31,2012 financial statements. Changes related to these standards are reflected in
<br /> the financial statements and related disclosures are included in Note 1.
<br /> As a result of the restatement of begitming balances,the following schedule reconciles the previously reported December
<br /> 31,2010 balance to the December 31,2012 financial statements:
<br /> Net Position
<br /> December 31,2010 Net Position
<br /> as Previously January 1,2011
<br /> Reported (1)Restatement as Restated
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<br /> Governmental activities $ 118,726,162 $ (53,265) $ 118,672,897
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<br /> Business-type activities 81,834,516 (229,762) 81,604,754
<br /> Proprietary fiords
<br /> Municipal Liquor 6,400,560 (1,688) 6,398,872
<br /> Garbage 500,819 - 500,819
<br /> Sewer 27,350,053 (13,340) 27,336,713
<br /> Water 21,188,987 (995959) 21,089,028
<br /> Electric 26,394,097 (114,775) 26,279,322
<br /> Total business-type activities $ 81,834,516 $ (229,762) $ 81,604,754
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<br /> (1) Write-off of unamortized bond issuance cost balances at December 31,2010.
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