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In response to a petition signed by the property owners of Riverdale Subdivision, the city of Pewaukee will oversee the installation of sidewalks, curbs, and gutters in the subdivision, to be accounted for in the city’s capital projects fund. Pewaukee reports on a calendar-year basis. Construction is estimated to cost $900,000 and will be financed by a $100,000 county grant, a $50,000 transfer from the city’s general fund, and special assessments of $750,000 to be levied against subdivision property owners. One-third of the levy is to be due on February 1 of each year, starting with 2018. The first $250,000 installment will be received by the capital projects fund directly. The remaining installments will be collected by the debt service fund and will be used to service the related bond debt. The project is to begin on January 15, 2018, and is to take 18 months to complete. It is estimated that 70% of the work will be completed during 2018.
To cover construction costs, a 6%, $500,000 special assessment serial bond issue will be floated on March 1, 2018. Interest is to be paid semiannually on September 1 and March 1 by the debt service fund. One-fifth of the principal will be redeemed onMarch 1 of each year, starting with 2019. Since interest earned on special assessments will offset bond interest cost, the city will not accrue interest.
Although the special assessments will provide cash to redeem the bond principal and pay the bond interest, Pewaukee has pledged its full faith and credit as security for the bond obligation.
The following events happen during 2018:
January 2— The city council adopted the annual budget for the Riverdale project in the capital projects fund.
January 2— The receivables from the general fund and the county were recorded.
January 5— Special assessments were levied in accordance with the plan, with one-third due on February 1.
January 9— Amounts due from the general fund and the county were received.
January 10— Encumbrances approved by a committee of the city council for the year were recorded at $675,000.
February 1— The first special assessment installment was collected.
March 1— Bonds with a $500,000 face value were sold at 101. Except for the price, other conditions remained in accordance with the bond plan. The premium was to be transferred to the debt service fund for interest payments.
March 1— $600,000 was invested in a 5%
August 31— $10,000 for interest payment was transferred by the capital projects fund to the debt service fund.
September 1— The semiannual bond interest was paid by the debt service fund.
December 15—The contractor submitted an invoice for $600,000 that was approved for payment, except for a 10% amount to be paid on completion and acceptance of the project. Related encumbrances totaled $595,000.
December 29—$400,000 was withdrawn from the money market investment. Interest of $16,600 was received.
December 30—The contractor was mailed a check for $540,000. In addition, vouchers for $76,600 were prepared and paid for items on the project that were not encumbered.
In addition— The next assessment installment was reclassified upon special direction of the city council, and an amount equal to project expenditures-to-date was capitalized.
For each of the preceding events, prepare the
Date Fund or Account Group Entry
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