Financial Section Notes to Financial Statements

Governmental Activities

• Revenue Refunding Bonds, Series 2011A - $24,665 of Refunding Bonds were issued to refinance $23,850 of outstanding principal amounts of the Revenue Refunding Bonds, Series 2001A and to pay for debt issuance costs. On December 1, 2021, the City exercised the option to pay the remaining principal payments. Those principal payments totaled $14.3 million. This saved the City on the interest payments it otherwise would have had to pay through the bond’s maturity in 2031. Those savings represent $2.5 million in interest on a net present value (“NPV”) basis. Dividing this by the amount left outstanding represents a present value (“PV”) savings of 17.6%

• All General Fund revenues are pledged for payment of debt service. Parity is allowed as long as the aggregate maximum annual debt service of the obligations constituting a parity lien does not exceed 15% of the General Fund Revenue.

• The outstanding debt contains a provision that in the event of default, the remaining balance including both principal and interest, are immediately due. Additionally, the trustee of the bond may pursue all remedies legally available to enforce the rights they represent on behalf of the bondholders. Default can be either a failure to pay debt service when due or through a failure to honor the debt covenants.

• If the City is unable to pay debt service when due, the City has insurance to cover the payment. If the insurance company covers a payment, the City then owes the insurance company for the covered payment, plus interest, and any fees and expenses. If the City cannot pay these costs, then the insurance company is entitled to pursue legal action to recoup what it is owed, as long as those actions do not adversely affect the bondholders.