CITY INDEBTEDNESS

The City issues general obligation bonds, to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City.

As of December 31, 2014, long-term debt of the City consisted of the following:

Final Authorized

G.O. Improvement Bonds Series 2005A 5/25/2005 2/1/2016 3.50-3.75% $3,705,000 $895,000

G.O. Improvement Bonds Series 2010A 5/7/2010 2/1/2031 1.25-5.7% 3,105,000 2,770,000

G.O. Improvement Refunding Bonds Series 2010C 12/29/2010 2/1/2040 3.0-5.65% 1,770,000 1,675,000

G.O. Improvement Bonds Series 2010D (BABS) 12/29/2010 2/1/2032 1.25-5.15% 13,025,000 11,970,000

G.O. Improvement Bonds Series 2012A HIA 10/17/2012 2/1/2033 0.75 - 3.90% 1,290,000 1,245,000

G.O. Improvement Bonds Series 2014A 12/18/2014 2/1/2040 2.00% 5,070,000 5,070,000

Total General Improvement Bonds 27,965,000 23,625,000

Tax Increment Bonds:

Tax Increment Refunding Bonds Series 2008B 12/11/2008 2/1/2024 3.25-4.63% 5,490,000 4,530,000

Total Tax Increment Bonds 5,490,000 4,530,000

Capital lease payable 2/14/2014 1/14/2019 N/A 40,500 33,075

Compensated absences payable N/A N/A N/A N/A 3,702,453

Total governmental activities 33,495,500 31,890,528

Business-Type Activities:

General Obligation Revenue Bonds:

Utility Revenue Bonds Series 2007A 6/5/2007 8/1/2023 4.00% 3,665,000 2,365,000

Utility Revenue Bonds Series 2008A 12/11/2008 8/1/2020 3.25-4.25% 4,075,000 2,645,000

Utility Refunding Revenue Bonds Series 2010B 5/7/2010 2/1/2025 2.0-3.5% 4,090,000 2,590,000

Utility Crossover Refunding Bonds Series 2013A 7/1/2013 8/1/2023 1.0-1.9% 4,170,000 4,170,000

Utility Revenue Bonds Series 2014A 12/18/2014 2/1/2016 2.00% 4,930,000 4,930,000

Total General Obligation Revenue Bonds 20,930,000 16,700,000

Compensated absences payable N/A N/A N/A N/A 149,606

Total business-type activities 20,930,000 16,849,606

Total City $54,425,500 $48,740,134

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CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014

GOVERNMENTAL ACTIVITIES

Annual debt service requirements to maturity for the governmental activities long-term debt are as follows:

Year Ending

It is not practicable to determine the specific year for payment of long-term accrued compensated absences.

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CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014

BUSINESS-TYPE ACTIVITIES

Annual debt service requirements to maturity for the business-type long-term debt are as follows:

Year Ending

December 31 Principal Interest

2015 $3,190,000 $380,170

2016 2,995,000 385,874

2017 1,360,000 346,480

2018 1,385,000 298,868

2019 1,410,000 249,405

2020 1,440,000 195,368

2021 945,000 137,030

2022 970,000 105,691

2023 995,000 72,351

2024 725,000 37,540

2025 745,000 19,863

2026 540,000 5,400

Total $16,700,000 $2,234,040 G.O. Revenue Bonds Governmental Activities

It is not practicable to determine the specific year for payment of long-term accrued compensated absences.

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CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014

CHANGE IN LONG-TERM LIABILITIES

Long-term liability activity for the year ended December 31, 2014 was as follows:

Beginning Ending Due Within

Balance Additions Reductions Balance One Year

Governmental activities:

Bonds payable:

G.O. improvement bonds $20,185,000 $5,070,000 $1,630,000 $23,625,000 $1,180,000

G.O. tax increment bonds 4,870,000 - 340,000 4,530,000 355,000

Add:

Premiums on bonds 5,679 98,040 2,405 101,314 -

Discounts on bonds (134,063) - (7,540) (126,523) -

Total bonds payable 24,926,616 5,168,040 1,964,865 28,129,791 1,535,000

Capital lease payable - 40,500 7,425 33,075 8,100

Compensated absences 3,556,949 2,150,016 2,004,512 3,702,453 2,591,717

Total government activity

long-term debt $28,483,565 $7,358,556 $3,976,802 $31,865,319 $4,134,817

Business-type activities:

Bonds payable:

G.O. revenue bonds $12,785,000 $4,930,000 $1,015,000 $16,700,000 $3,190,000

Add:

Premiums on bonds 35,022 95,397 3,916 126,503 -

Total bonds payable 12,820,022 5,025,397 1,018,916 16,826,503 3,190,000

Compensated absences 146,549 109,854 106,797 149,606 104,719

Total business-type activity

long-term debt $12,966,571 $5,135,251 $1,125,713 $16,976,109 $3,294,719

For governmental activities, compensated absences are paid out of the Employee Administrative internal service fund.

ADVANCE CROSSOVER REFUNDING

On July 10, 2013, the City issued $4,170,000 in General Obligation Refunding Bonds, Series 2013A with an average interest rate of 1.373% to advance refund $2,145,000 of outstanding Series 2007A Bonds with an average interest rate of 4.00% and $1,840,000 of outstanding Series 2008A Bonds with an average interest rate of 4.12%. The net proceeds of $4,106,498 were used to purchase U.S. Government Securities.

Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded bonds on August 1, 2015 for Series 2007A Bonds and August 1, 2016 for the Series 2008A Bonds.

The City advance refunded the 2007A General Obligation Utility Revenue Bonds and 2008A General Obligation Utility Revenue Bonds to reduce its total debt service payments from 2014 to 2023 by $234,091 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $215,954.

The City is responsible for the debt service of the refunded bonds before the crossover date and the debt service of the refunding bonds after the crossover date. The debt service of the refunding bonds before the crossover date is payable from the escrow account. Assets held with the escrow agent total $4,047,239 at December 31, 2014.

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CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014

Refunded Bonds Refunded Bonds Refunding Bonds

Payment Date 2007A 2008A 2013A Escrow Account City

2015 $2,459,600 $499,613 $53,513 $2,198,513 $814,213

In 2014, the City entered into a lease purchase agreement for a copier. The agreement calls for monthly payments of $675 maturing on January 14, 2019.

Depreciation in the amount of $6,790 has been recorded as depreciation expense during 2014.

The net book value of assets under the capital lease at December 31, 2014 is as follows:

December 31, 2014

Equipment $40,500

Accumulated depreciation (6,790)

Net $33,710

The following is a schedule of future minimum lease payments under the capital lease:

Year Payment

CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014

REVENUE PLEDGED

Future revenue pledged for the payment of long-term debt is as follows:

Percent of Debt service Remaining Principal Pledged

Use of total as a % of Term of Principal and Interest Revenue

Bond Issue Proceeds Type debt service net revenues Pledge and Interest paid received

2012A Taxable GO Housing Imp. Area Housing Improvement Area Fee 100% 47% 2012-2033 $1,663,735 $79,569 $167,656

2008B GO Tax Increment Street Improvements TIF 100% 100% 2009-2024 5,615,844 537,963 537,963

2007A GO Utility Revenue Utility Infrastructure Projects Utility charges 100% 100% 2008-2023 2,863,800 318,200 318,200

2008A GO Utility Revenue Utility Infrastructure Projects Utility charges 100% 100% 2009-2020 3,035,063 497,913 497,913

2010A Taxable GO Housing Imp. Area Housing Improvement Area Fee 100% 99% 2011-2031 4,158,123 249,608 251,854

2010B GO Utility Infrastructure Projects Utility charges/Special Assessments 100% 100% 2011-2025 2,973,779 979,668 979,668

2010C GO Refunding - Louisiana Crt Louisiana Court Project Operating revenues of La Court 100% 101% 2011-2040 3,035,073 117,680 116,513

2013A GO Crossover Refunding Utility Infrastructure Projects Utility charges 100% 100% 2013-2023 4,462,620 56,634 56,634

2014A GO Utility Revenue Utility Infrastructure Projects Utility charges 100% 0% 2015-2026 5,598,749 - -

Revenue Pledged Current Year

Note 7 DEFINED BENEFIT PENSION PLANS - STATEWIDE