11-13-2018 Council Meeting Packet

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 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 at December 3 I, 2017: TIF 1-5 TIF 1-11 TIF 1-12 Cottage TIF 1-10 Woods Clearwater Homesteads Panattoni Ed!!e Creek Authorizing law M.S.469 M.S.469 M.S.469 M.S. 469 Year established 1994 2004 2005 2006 Final year of district 2022 2023 2031 2026 Net tax capacity: Original $128 $15,869 $7,241 $11,731 Current (payable 2017) 34052 232,094 135,973 11,731 Captured -retained $33,924 $216,225 ~ 732 $0 Note 17 COMMITMENTS AND CONTINGENCIES A. LITIGATION Existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance, of an immaterial amount, or, in the judgment of the City's management, remotely recoverable by plaintiffs. B. FEDERALANDSTATEFUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2017. C. COMMITTED CONTRACTS At December 3 I, 2017, the City had commitments of$ I 94,558 for uncompleted construction contracts. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 18 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets, errors and omissions, injuries to employees and natural disasters. Workers compensation coverage is provided through a pooled self-insurance program through the Leagoe of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. 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 assessments 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 19 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 83 Certain Asset Retirement Obligations. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. Statement No. 84 Fiduciary Activities. The provisions of this Statement are effective for reporting periods beginning after December 15, 2018. Statement No. 8S Omnibus 2017. The provisions of this Statement are effective for reporting periods beginning after June 15, 2017. Statement No. 86 Certain Debt Extinguishment Issues. The provisions of this Statement are effective for reporting periods beginning after June 15, 2017. Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning after December 15, 2019. -Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. IV-37