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CITY OF ELK RIVER
<br />MANAGEMENT'S DISCUSSION AND ANALYSIS
<br />ENDED DECEMBER 31, 2016
<br />Long-term debt. At the end of the current fiscal year, the City had total long-term debt outstanding of
<br />$81,906,740, an increase of $16,533,306 from 2015. General obligation improvement bonds
<br />($29,530,000) were issued to finance the construction of a library, a recreation facility, a public
<br />safety/city hall facility, a public works facility, and improvement projects within the City. General
<br />obligation revenue bonds ($11,830,000) were used to finance sewer and water systems. Revenue
<br />bonds ($11,955,000) were used to finance electric system improvements.
<br />Additional long-term debt in the amount of $1,214,076 is for notes payable, $1,969,561 is for
<br />compensated absences, $23,862,985 is for net pension liability, and $565,403 is for other
<br />postemployment benefits obligations.
<br />The City maintains a bond rating of AA+ from Standard & Poor's for general obligation debt.
<br />State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of total
<br />Estimated Taxable Market Value. The current debt limitation for the City of Elk River is $59,362,917.
<br />$15,146,053 of the City's net outstanding debt is counted within the statutory limitation
<br />Additional information on the City of Elk River's long-term debt can be found in Note 7 starting on page
<br />55 of this report.
<br />Economic Factors and Next Year's Budget
<br />The City of Elk River estimates that the demand for City services will begin to grow at increased levels
<br />as compared to the prior years due to the improved economy and recent building activity. This was
<br />taken into consideration in preparation of the City's 2017 budget. The property tax levy is set annually
<br />and is adjusted as necessary to fund the cost of providing services to our citizens and customers.
<br />Charges for services are evaluated each year and adjusted if warranted. The City expects to keep the
<br />tax levy consistent in upcoming years.
<br />Requests for Information
<br />This financial report is designed to provide a general overview of the City of Elk River's finances for all
<br />those with an interest in the City's finances. Questions concerning any of the information provided in
<br />this report or requests for additional financial information should be addressed to City of Elk River, Attn:
<br />Finance Director, 13065 Orono Pkwy, Elk River, Minnesota 55330 or by calling (763) 635-1000.
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<br />Governmental Activities
<br />Business -Type Activities
<br />Total
<br />2016
<br />2015
<br />2016
<br />2015
<br />2016
<br />2015
<br />General Obligation Bonds
<br />$ 29,530,000
<br />$ 33,220,000
<br />$ -
<br />$ -
<br />$ 29,530,000 $
<br />33,220,000
<br />General Obligation Revenue Bonds
<br />-
<br />-
<br />11,830,000
<br />12,535,000
<br />11,830,000
<br />12,535,000
<br />Revenue Bonds
<br />-
<br />-
<br />11,955,000
<br />2,985,000
<br />11,955,000
<br />2,985,000
<br />Issuance Premium
<br />443,384
<br />494,456
<br />536,331
<br />65,234
<br />979,715
<br />559,690
<br />Total Bonds Payable, Net
<br />29,973,384
<br />33,714,456
<br />24,321,331
<br />15,585,234
<br />54,294,715
<br />49,299,690
<br />Contracts for Deed
<br />-
<br />1,410,000
<br />-
<br />-
<br />-
<br />1,410,000
<br />Notes Payable
<br />-
<br />-
<br />1,214,076
<br />1,408,368
<br />1,214,076
<br />1,408,368
<br />Compensated Absences
<br />1,494,429
<br />1,466,238
<br />475,132
<br />424,758
<br />1,969,561
<br />1,890,996
<br />Net Pension Liability
<br />18,541,369
<br />7,589,597
<br />5,321,616
<br />3,277,492
<br />23,862,985
<br />10,867,089
<br />Other Postemployment Benefits
<br />426,720
<br />376,943
<br />138,683
<br />120,348
<br />565,403
<br />497,291
<br />Total Outstanding Debt
<br />$ 50,435,902
<br />$ 44,557,234
<br />$ 31,470,838
<br />$ 20,816,200
<br />$ 81,906,740 $
<br />65,373,434
<br />Additional long-term debt in the amount of $1,214,076 is for notes payable, $1,969,561 is for
<br />compensated absences, $23,862,985 is for net pension liability, and $565,403 is for other
<br />postemployment benefits obligations.
<br />The City maintains a bond rating of AA+ from Standard & Poor's for general obligation debt.
<br />State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of total
<br />Estimated Taxable Market Value. The current debt limitation for the City of Elk River is $59,362,917.
<br />$15,146,053 of the City's net outstanding debt is counted within the statutory limitation
<br />Additional information on the City of Elk River's long-term debt can be found in Note 7 starting on page
<br />55 of this report.
<br />Economic Factors and Next Year's Budget
<br />The City of Elk River estimates that the demand for City services will begin to grow at increased levels
<br />as compared to the prior years due to the improved economy and recent building activity. This was
<br />taken into consideration in preparation of the City's 2017 budget. The property tax levy is set annually
<br />and is adjusted as necessary to fund the cost of providing services to our citizens and customers.
<br />Charges for services are evaluated each year and adjusted if warranted. The City expects to keep the
<br />tax levy consistent in upcoming years.
<br />Requests for Information
<br />This financial report is designed to provide a general overview of the City of Elk River's finances for all
<br />those with an interest in the City's finances. Questions concerning any of the information provided in
<br />this report or requests for additional financial information should be addressed to City of Elk River, Attn:
<br />Finance Director, 13065 Orono Pkwy, Elk River, Minnesota 55330 or by calling (763) 635-1000.
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