05-28-13 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 56 Note 15 RISK MANAGEMENT (CONTINUED) Property and casualty insurance is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental a ssessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies. These amounts are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including disability and employee health insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Note 16 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Development Revenue B onds and Commercial Revenue Notes to provide financial assistance to private-sector entities fo r the acquisition and construction of i ndustrial and commercial facilities which are deemed to be in the public interest. The bonds are secu red by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repaym ent of the bonds, ownership of the acquired facilities transfers to the private sect or entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2012, one series of Indus trial Revenue Bonds was outst anding with an aggregate remaining principal balance of $655,000, and one series of Commercial Revenue Notes was outstanding with an aggregate remaining principal balance of $2,386,656. Note 17 LEASE COMMITMENT The City of Lino Lakes entered into an agreement dated December 8, 1997 to lease space with in the City Hall complex to the Independent School District No. 12 (ISD 12). The lease term was renewed as of July 1, 2009 and continued through June 30, 2011 and require d payments of $110 per square foot over the lease term for a total of $300,000. Effective February 14, 2011, the lease was fu rther renewed through June 30, 2012 and required two payments of $60,000 semi annually. This lease was not renewed when it was expired on June 30, 2012. The prorated carrying value of the building being leased is as follows: Building929,970 $ Less: Accumulated Depreciation(402,987) N et526,983 $ Note 18 JOINT VENTURES Fire The Centennial Fire District (the District) was established under a joint powers agreement between the City of Lino Lakes and two other cities. The general purpose of the District is to provide fire protection services including, but not limited to, fire prevention, firefi ghting and rescue service. Each memb er city is entitled to appoint two commissioners to the District’s Board.