5.1. SR 05-14-2001 - Laserfiche WebLink

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CITY OFELK RIVER, MINNESOTA NOTES TOFINANCIAL STATEMENTS DECEMBER 31.2OOO Note 6: LONG-TERMQBUGAT|QNS-CONTNUED During 1999 the City defeasedthe General Obligation Improvement Bonds, Series 1994E by depositing debt service fund reserves into amirrevocable trust tnprovide for all future debt service payments on the defeoaedbonds. Accordingly, the trust account assets and the liability for the dafeooedbonds are not included inthe City's financial statements, AsofDecember 31.2O0O.the balance ofthe defeaeed debt ia$1.O3D.OQD. In 1999 the City issued $580,000 General Obligation Refunding Bonds, Series 1999B and contributed cash held in the debt service fund to provide funds to redeem the General Obligation Improvement Bonds, Series 19S4A. The proceeds and the City's cash contribution are held in an escrow account and invested inUSgovernment securities. The securities will beused toprovide for future interest payments on the new bonds until the call date of the Series 1994A bonds on February 1, 2001 � The City will continue bmpay the original debt service nnthe Series 18A4Abonds until the call date, atwhich time the securities in the escrow account will be used to prepay the refunded bonds. Beginning with the August 1.2OQ1 payment, the City will crossover and begin to make the debt service payments on the refunding issue. Since this iomcrossover advance refunding, the assets held intrust bythe escrow agent are reported in the debt service fund and the liabilities for both the refunding bonds and the refunded debt are reported in the general long-term debt account gnoup, pending the crossover date. On November 16, 2000, the City issued $900,000 General Obligation Refunding Bonds, Series 2000C with net interest rate of4.8896tocurrent refund the $2.35O'OQOGeneral Obligation Bonds. Series 19Q2Awith anet interest rate of8.O2%, The proceeds plus anadditional $181.4S7ofdebt service fund reserves were used topurchase U.S.government securities. Those securities were deposited inan irrevocable trust with an escrow agent to provide for future debt service payments on $1,075,000 of the Series 19S2Abonds. /\earesult, the Series 1092Abonds are considered tobedefeaaedand the liability for those bonds has been removed from the City's financial statements. The City refunded the 1992A Series bonds to reduce its total debt service payments by $270,218 and to obtain an economic gain, after accounting for the cash contribution, nf$4U.184. Also inNovember 2000, the City issued $510,000 General Obligation Tax Increment Refunding Bonds, Series 2000D with e net interest rate of7 38% to current refund the General Obligation Tax Increment Bonds, Series 198ABwith anet interest rate ufS31%and Series 188OAwith mnet interest rate of 9,85%totaling $5QO,OD0The bond proceeds were invested imU,S,government securities and deposited in an irrevocable trust to provide for the payment of principal and interest on the refunded bonds, As a result, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. The City refunded the Series 1888B and 1990A bonds to reduce its total debt service payments by$41.463and toobtain aneconomic gain of $30.282. 10 NTM�0101 0 1 oil] 19 314 From time to time, the City has issued industrial revenue bonds to provide financial assistance to private -sector entities for the acquisition and construction of industrial and commercial facilities deemed hobeinthe public interest. The bonds are secured bythe property financed and are payable solely from payment received omthe underlying mortgage loans. Upon repayment nfthe bonds, ownership cf the acquired facilities transfers tuthe private -sector entity served bythe bond issuance, Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported asliabilities imthe accompanying financial statements. AeofDecember 31.2OQO.there were six series cfindustrial revenue bonds outstanding, with an aggregate principal amount payable of $20,705,000. 25