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DEBT SERVICE FUNDS QESCRIPTION: The Debt Service Funds repay the outstanding debt. obligations of the City of Gem. Lake. Debt service funds use the modified accrual basis of accounting;. however, the cash basis.of accounting will be used for budgetary purposes ❑nly. The. cash basis is used for budgeting to ensure that sufficient cash will be available to make requiredpayments on the City's bonded indebtedness. GOALS: 1. Retireall debt in a timely basis as. scheduled. MEASURABLE WORKLOAD DATA: 2015 2016 2017 2018 ACTUAL ACTUAL ACTUAL ESTIMATED Bond Rating Non -Rated Non -Rated Non -Rated. Non -Rated. ❑ec...31 Debt Outstanding (InAhousands) $745 $775 $715 .$655 Net Debt Per Capita $1;877 $1,872 $1,727 $1;582 DEBT LIMITATIONS: All Minnesota municipalities (counties, cities, towns and school districts). are subject to, statutory "net dent" limitations under the provisions of Minnesota Statutes, Section 475.53. Under this provision, the legal debt limit is S.0°Io of the assessor's market value of the municipalities' tax base. Bond issues. covered by this limit are those that are financed by property taxes unless at least 2.0% of the annual debt service costs are financed. by special assessments or tax increments. At.present, the City has one bond issue that is subject to the debt. limit: the 2007 Capital Improvement Flan Bonds. In 2015, the. City issued the 2015 G. 0. Refunding Bonds to retire the 2007 Capital Improvement Plan Bonds in 201.6. The City's current legal debt limit and debt margin is as follows. .Legal Debt Limit (3% of Estimated Market Value) $3,300,258. Less.: Outstanding Debt Subject to.Limit (715,000) Legal Debt Margin as of January 1, 2018 $2,585,258 BUDGET COMMENTARY. The City's debt consists of a capital irnprovemerit plan bond for the construction of Heritage Hall, which 84