Comprehensive Annual Financial Report 12/31/2015

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 9 CONTINGENCIES Tax Increment Districts — The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which could have a material effect on the financial statements. Federal and State Funds — The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2015. Liti ag tion — The City, in connection with the normal conduct of its affairs, is involved in various claims, judgments, and litigation. As of December 31, 2015 any potential affect this may have on the City is not estimable, however it is not expected to have a material effect on the financial statements of the City. Labor Contracts — The City has various employees that are covered under labor agreements that are subject to collective bargaining. The status of labor contracts in the City is as follows: Number of Bargaining Unit Employees LELS - Patrol 18 LELS - Sergeant 49ers - Public Works AFSCME Non -unionized Employees Total Employees 15 17 64 59 Expiration Date of Current Contract December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015