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<br /> <br />City of Little Canada, Minnesota <br />Notes to the Financial Statements <br />December 31, 2024 <br /> <br />Note 7: Adjustments to and Restatements of Beginning Balances <br /> <br />Change in Accounting Principle <br /> <br />During fiscal year 2024, the City adopted the provision of Governmental Accounting Standard Board (GASB) Statements <br />No. 101, Compensated Absences, for the year ended December 31, 2024. Adoption of the provision of this statement <br />results in significant change to the classifications of the components of the financial statements. There were no <br />adjustments or restatements of beginning balances needed for the adoption of this statement. <br /> <br />Note 8: Other Information <br /> <br />A. Risk Management <br /> <br />The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and <br />omissions; injuries to employees; and natural disasters for which the City carries insurance. The City participates in the <br />League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, <br />workers’ compensation and other miscellaneous insurance coverage. LMCIT operates as a common risk management <br />and insurance program for member cities. The City pays an annual premium to LMCIT for insurance coverage. The LMCIT <br />agreement provides that LMCIT with be self-sustaining through member premiums and will reinsure through commercial <br />companies for claims in excess of certain limits for each insured event. <br /> <br />The City also carries commercial insurance for certain other risks of loss, including employee health insurance. Settled <br />claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years. There <br />were no significant reductions in insurance coverage during 2024. <br /> <br />B. Legal Claims <br /> <br />The City has usual and customary type of miscellaneous legal claims pending at year-end. Although the outcome of these <br />lawsuits is not presently determinable, the City’s management believes the City will not incur any material monetary loss <br />resulting from these claims. No loss has been recorded on the City’s financial statements relating to these claims. <br /> <br />C. Tax Increment Districts <br /> <br />The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any <br />disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated <br />that they are not aware of any instances of noncompliance which would have a material effect on the financial <br />statements. <br /> <br />88