2009-08-26 Handouts @ Mtg. - Laserfiche WebLink

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2. Pursuant to Minn. Stat. S 475.51, subd. 4, net debt is defined to include "the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments . . . ." Several types of debt are deducted from gross debt in the calculation of net debt. The result is that, with only few exceptions, the only obligations subject to the debt limit are general obligation bonds payable solely from ad valorem property taxes. Most debt obligations for which some other source or revenue is pledged as security are excluded from the legal debt limit. Improvement assessment bonds, tax increment bonds, utility revenue bonds, pure revenue bonds, capital improvement bonds under an approved capital improvement plan, judgment bonds, and similar bonds may be issued without regard to the statutory debt limit. See the League of Minnesota Cities' Handbook for Minnesota Cities, chapter 24. Of the City's total debt principal outstanding, three of the four bond issues are supported by special assessments, leaving only $701,896 subject to the legal debt limit. 3. The 2008 total market value of taxable property for the City of Centerville, according to information provided by the Anoka County Department of Property Records & Taxation, was $372,405,100. The net debt limit for the City is then $11,172,153 (three percent of the $372,405,100). The City of Centerville was within the statutory legal debt limit; however, we again remind the City, especially with the current state of the economy, to understand the impact on its current aod future financial health when deciding to move forward with current projects or to implement future projects. The legal debt limit is separate from the practical debt limit of the City, which is the debt burden beyond which the credit-worthiness of the City is put into question. Insurance The petitioners were concerned about the process the City of Centerville may have followed in securing an insurance agent of record. We spoke with City personnel, reviewed proposals received by the City of Centerville relating to the hiring of an insurance agent of record, and reviewed the City of Centerville's Check Summary Register listings for the period January 1, 2005, through December 16, 2008. The following items were noted. Page 18