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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />❑ECEMBER 31, 2016 <br />NOTE 4 CITY INDEBTEDNESS (CONTINUE©) <br />.Description and Restrictions of Long -Term Debt <br />General. Obligation Bonds — The bonds were issued for improvements or projects which <br />benefited the City as a whole and are, therefore, repaid from ad valorem levies. <br />General Obligation Refunding. Bonds — In 2015,. the City issued General Obligation <br />Crossover Refunding Bonds to refund the 2007A General Obligation Bonds. The City was. <br />responsible for the February 2016 payment and after, the crossover occurred and the <br />escrow will be responsible for the remaining principal and interest payments of the 2007A <br />bond, resulting. in a defeasance of the bond. The refunding resulted in a net present value <br />cash savings of $41,908, <br />NOTE 5 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY <br />Deficit Fund Balances <br />The City has a deficit fund. balance at ❑ecember 31, 2016 as follows: <br />Fund Balance <br />S nfll i;F <br />Hoffman Road Fund $ (391,685) <br />G.O. Improvement Bonds.2004A (1,464) <br />The City intends to fund these deficits' through future tax levies, transfers from other funds; <br />and various other sources. <br />NOTE 6 INTERFUND BALANCES AND ACTIVITIES <br />Due To/From Other Funds <br />Individual fund. receivable and: payable balances at December 31, 2016 are as follows: <br />Governmental. Activity: <br />General. Fund <br />Hoffman Road Fund <br />Other Governmental Funds <br />Business -Type Activity: <br />Sewer Fund <br />lnterfund Interfund <br />Receivable Payable <br />$ 1;464 $ - <br />- 397,252 <br />1,464 <br />397;252 - <br />$ 39.8,716 $ 39.8,716 <br />Interfund receivable and payable balances represent the elimination of negative cash <br />between funds. <br />R.7). <br />