Comprehensive Annual Financial Report 12/31/2016

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 16 TAX INCREMENT DISTRICTS The City is the administrating authority for three 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. The following table reflects values as of December 31, 2016: Note 17 COMMITMENTS AND CONTINGENCIES A. LITIGATION Existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance, of an immaterial amount, or, in the judgment of the City's management, remotely recoverable by plaintiffs. B. 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, 2016. 81 TIF 1-5 TIF 1-11 Cottage TIF 1-10 Woods Homesteads Panattoni Edge Authorizing law M.S. 469 M.S. 469 M.S. 469 Year established 1994 2004 2005 Final year of district 2022 2023 2031 Net tax capacity: Original $128 $15,869 $7,241 Current (payable 2016) 30,079 218,452 116,280 Captured - retained $29,951 $202,583 $109,039 Note 17 COMMITMENTS AND CONTINGENCIES A. LITIGATION Existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance, of an immaterial amount, or, in the judgment of the City's management, remotely recoverable by plaintiffs. B. 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, 2016. 81