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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 Note 15 TAX INCREMENT DISTRICTS The City is the administrating authority for four 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 noocompliance which could have a material effi,ct oo the financial statements. The following table reflects values at December 31, 2019: 1lF 1-5 1lF 1-11 1lF 1-12 Cottage 11F 1-10 Woods Cleanwter Homesteads Panattoni ~ 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 $21,032 $21,416 Current (payable 2019) 40398 243,818 224,749 _fil626 Captured • retained $40,270 $227,949 $203,717 .....!ll!!dlO Note 16 COMMITMENTS AND CONTINGENQ!!;§ A. LIDGATION 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 cooditions 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 oo any of the financial statements of the individual fund types included herein or on the overall financial positioo of the City at December 31, 2019. C. COMMITTED CONTRACTS At December 31, 2019, the City had commitments of $4,910,154 for uncompleted constructioo contracts. In additioo, the City has entered into coostructioo cootracts during 2020 totaling $2,467,839. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 Note17 RISKMANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destructioh of assets, errors and omissions, injuries to employees and natural disasters. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCin. The City pays an armual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensatioo Reinsurance Associatioo (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensatioo 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 armual 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 cootinues 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 18 INSURANCE RECOVERY During 2019, the City received insurance proceeds in the amount of$711,854 relating to storm damage. The insurance proceeds were expended during the year to replace the roof of the Civic Complex. Note lll PRESENTATION OF DEPOSITS PAYABLE For the year ended December 31, 2019, the City implemented GASB Statement No. 84, Fiduciary Activities. Based oo the guidance provided by GASB 84, the City's developer deposits no looger meet the definitioo of a fiduciary activity. Therefore, the amounts and activity previously reported in a fiduciary fund are now reported in the General Fund. This reclassificatioo had no effi,ct on beginning net positioo or fund balance. IV-36