07-10-1995 Council Packet - Laserfiche WebLink

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CITY CF ORONO. MINNESOTA Notes to Financial Statements (continued) December 31. 1994 1 NOTE 5 - LONG-TERM DEBT (CONTINUED) *Public Facilities Bonds of 1991 > These bonds were issued by the Housing and Redev’elopment Authority of Orono for the purpose of financing tne construction of facilities for a City meeting haP, City offices, police offices, detention and priKessing. public works office space, stora|,« maintenance, and repair of machinery and equipment, and a cold storage buildinj “uant to Minnesota Statutes § 469.103a, lease-purchase contracts between the Authu.,.^ and the City and a Tru.st l.ndtrture between the Authority and American National Baik and Trust Company have been cuablished. The bonds are special obligations of the City as issuer and owner of the land and buildings. The City has pledged rental payments in amounts equal to the debt service requirements and plans to annually appropriate '^ity funds available for this purpose. In addition. Minnesota Statutes ^ 475.50. Subd. 5(e) allows cities to make a special levy (outside ot levy limits) to pay principal and interest on bonds of another political subdivision. The Minnesota Department of Revenue has determined that because a Housing and Redevelopment Authtirity is a political subdivision of the state, a levy to pay principal and interest on the bonds would be outside the City's levy limits. “ Vacation and Severance Benefits Payable - This liability represents vested benefits earned by employ ees other than Proprietary Fund employ ees through the end of the year (other than the current portion paid w'ithin 60 days), which w ill be paid or used in future periinls. The liability for Proprietary Fund employ ees is included In the accrued liabilities of those funds. 2.Proprietary Fund Debt ® G.O. Water and Sewer Revenue Bonds of 1989 - These bimds were issued to finance improvements to the water and .sewer sy.stems and will be repaid from net revenues id the water and sewer systems, connection charges, and special assessments levied against benefitted properties Under the resolution authorizing the sale of the bonds, the City is required to have in a water and sewer bond restricted cash account an amount not less than the total amount of the principal and interest on the bonds due and payable the following year. Amounts credited to the water and sewer account are to be used only for payment of principal and interest on the bonds. Net revenues of the water and sewer sy.stems after pay ment of operation and maintenance expenses are available to be credited to the water and sewer bond account as required. Unspent bond proceeds received are restricted for debt service or con.struction in t* " Water and Sewer Operating Enterpri.se Funds. E.Ultimate Responsibility for Debt Long-term debt is backed by the full faith and credit of the City, except the Public Facilities Revenue Bonds of 1991. -45- I J