Annual Financial Report 12/31/1989

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CITY OF LINO LAKES, MINNESOTA Page 19 of 21 NOTES TO FINANCIAL STATEMENTS December 31, 1989 NOTE 8 CONTINGENCIES The City attorney has indicated that 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 judgement of the City attorney, remotely recoverable by plaintiffs. NOTE 9 FEDERALLY ASSISTED PROGRAMS - COMPLIANCE AUDITS 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, 1989. NOTE 10 DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The deferred compensation plan is offered by the International City Managers Association (ICMA). The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or their beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. For the year ended December 31, 1989, the following deferred payroll deductions were remitted to the plan: Employee $23,345 Employer 0 Total $23,345 The value of total remittances at December 31, 1989 was $119,058. This amount is presented in an agency fund in accordance with GASB Statement No. 2.