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ii;'.!i :•I'V ■r- ■ ' m|i;-m' w Isiii? »■ irf'i ;;;• d \ - tte I'-*''ifaWJ^k'§sMh4iiitB|;;P CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31. 1991 NOTE ( - LONG-TERM DEBT (CONTINUED) Public Facilities Bonds of 1991 - These bonds were issued by the Housing and Redevelopment Authority of Orono for the purpose of financing the construction of facilities for a City meeting hall, City offices, police offices, detention and processing, Public Works office space, storage, maintenance and repair of machinery and equipment, and a cold storage building. Pursuant to Minnesota Statutes Section 469.103a, lease-purchase contracts between the Authority and the City and a Trust Indenture between the Authority and American National Bank and Trust Company have been established. 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 appropriate annually City ^nds available for this purpose. In addition, Minnesota Statutes Section 475.50. Subdivision 5(e) allows cities to make a special levy (outside of 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 Authority 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 employees other than Proprietary Fund employees thriiugh the end of the year, which will be paid or used in future periods. The liability for Proprietary Fund employees is included in the accrued Habilitics of those funds. G.O. Water and Sewer Revenue Bonds of 1989 - These bonds were issued to finance improvements to the water and sewer systems and w ill be repaid from net revenues of the water Mid Mwer 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 ill 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. Ankiunts ciedited to the WatM and Sewer Account are to tie used only for payment of principal and interest on the bonds. Net revenue of the Water and Sewer Systems after payment 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 serv ice or construction in the WMtr and Sewer Opiating Enterprise Funds B. Uiliiiwle Rcaponsibittly for Debt Lonifplerm debt is backed by the full faith and credit of the City, except the Public Facilities Revenue Bonds of 1991 mm I I I I I I I I I I I I I I I I