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CITY OF ELK RIVER
<br /> NOTES TO BASIC FINANCIAL STATEMENTS
<br /> YEAR ENDING DECEMBER 31, 2016
<br /> NOTE 7 LONG-TERM DEBT
<br /> A. Components of Long-Term Debt
<br /> The City had the following long-term liabilities outstanding at December 31, 2016:
<br /> Final Maturity Balance-
<br /> Description Issue Date Date Original Issue Interest Rate End of Year
<br /> PRIMARY GOVERNMENT
<br /> Governmental Activities:
<br /> General Obligation Bonds Payable:
<br /> EDA G.O.Bonds 2007D 11/08/07 02/01/17 10,000,000 3.80% $ 9,620,000
<br /> G.O.Capital Improvement Bonds 2010A 04/21/10 02/01/23 6,105,000 2.00-4.00% 3,540,000
<br /> G.O.Capital Improvement Bonds 2012A 03/15/12 02/01/33 6,975,000 1.00-2.50% 6,090,000
<br /> EDA G.O.Refunding Bonds 2013A 02/12/13 02/01/33 9,685,000 2.00-3.00% 9,685,000
<br /> G.O.Improvement Refunding Bonds 20128 03/15/12 02/01/18 1,525,000 2.00% 595,000
<br /> Total General Obligation Bonds 29,530,000
<br /> Unamortized Bond Premiums 443,384
<br /> Compensated Absences 1,494,429
<br /> Total Governmental Activities $ 31,467,813
<br /> Business-Type Activities:
<br /> General Obligation Revenue Bonds:
<br /> G.O.Water Revenue Refunding Bonds 2008A 02/20/08 02/01/22 $ 780,000 0.50-2.80% $ 1,480,000
<br /> G.O.Capital Improvement Bonds 201 OA 04/21/10 08/01/23 525,000 3.00% 750,000
<br /> G.O.Sewer Revenue Bonds 2014B 08/21/14 02/01/35 2,620,000 2.00-3.00% 9,600,000
<br /> Total General Obligation Revenue Bonds 11,830,000
<br /> Revenue Bonds
<br /> Electric Revenue Refunding Bonds 2014A 03/13/14 08/01/18 2,030,000 2.00-4.00% 830,000
<br /> Electric Revenue Bonds 2016A 07/14/16 02/01/36 9,755,000 2.00-4.00% 9,755,000
<br /> Electric Revenue Refunding Bonds 20168 07/14/16 02/01/22 1,370000 2.00-4.00% 1,370,000
<br /> Total Revenue Bonds 11,955,000
<br /> Total Bonds 23,785,000
<br /> Unamortized Bond Premiums 536,331
<br /> Notes Payable 1,214,076
<br /> Compensated Absences 475,132
<br /> Total Business-Type Activities $ 26,010539
<br /> For the governmental activities, bonds payable can be summarized in the following
<br /> categories:
<br /> The general obligation bonds were used to construct a recreation facility, a public safety
<br /> facility, a public works facility and finance a street improvement project. The recreation
<br /> facility is leased to the YMCA, which has pledged to pay one-third of the bonds
<br /> outstanding. The bonds are general obligations of the City and are backed by its full faith
<br /> and credit.
<br /> In 2013 the EDA issued $9,685,000 G.O. Refunding Bonds, Series 2013A. The bonds
<br /> bear an average coupon rate of 2.2% and will be used to call $9,225,000 of the
<br /> outstanding principal of the EDA G.O. Bonds, Series 2007D on February 1, 2017. As a
<br /> result of the refunding issue, the EDA will save $1,001,112 in debt service payments and
<br /> achieve an economic gain (the present value of the difference between the old and the
<br /> new debt service) of$795,866.
<br /> For the business-type activities, the general obligation revenue bonds were issued to
<br /> finance capital improvements. The bonds are payable from future revenues pledged
<br /> from the Sewer and Water funds and are backed by the full faith and credit of the City.
<br /> Annual principal and interest payments on the bonds are expected to require about 21%
<br /> and 13% of revenues from the Sewer and Water funds, respectively.
<br /> (55)
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