Comprehensive Annual Financial Report 12/31/2000

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2000 Note 16 RISK MANAGEMENT (CONTINUED) The City continues to carry commercial insurance for all other risks health insurance. There were no significant reductions in insurance from the previous coverage for any of the past three fiscal years. of loss, including disability and employee year or settlements in excess of insurance Note 17 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Development Revenue Bonds to provide financial assistance to private- sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector 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 fmancial statements. As of December 31, 2000, two series of Industrial Revenue Bonds were outstanding with aggregate remaining principal balances of $2,550,000 and $4,800,000, respectively. Note 18 LEASE COMMITMENT The City of Lino Lakes entered into a lease agreement dated December 8, 1997 whereby the City constructed a facility on property it already owned. Upon completion, this facility was leased to the Independent School District No. 12 (ISD 12), the tenant, in January 1999 and will continue until June 30, 2009. The tenant's — payments are $110 per square foot per year for a total of $1,200,000 over the term of the lease. The schedule of remaining payments is as follows: Wwle 2001 2002 2003 2004 2005 Thereafter $ 112,500 112,500 112,500 112,500 112,500 412.500 $ 975,000