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—' CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2009 <br />Note 9 CONTINGENCIES <br />Litigation - The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the <br />City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City <br />attorney, remotely recoverable by plaintiffs. <br />Federal and State Funds - The City receives financial assistance from federal and state governmental agencies in the <br />form of grants. The disbursement of funds received under these programs generally requires compliance with the <br />. _ terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any <br />disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the <br />opinion of management, any such disallowed claims will not have a material effect on any of the financial <br />statements of the individual fund types included herein or on the overall financial position of the City at December <br />31, 2009. <br />Mow <br />is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is <br />notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to <br />cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy <br />any additional taxes found necessary for full payment of principal and interest. <br />Note 10 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT <br />General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond <br />issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied <br />against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies <br />These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, <br />2009. <br />Future scheduled tax levies for all bonds outstanding at December 31, 2009 totaled $23,716,179. <br />Note 11 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY <br />At December 31, 2009, the City had designated and reserved portions of its various fund equities through legal <br />restriction and City Council authorization. Major fund equity appropriations at December 31, 2009 are shown on the <br />various balance sheets as segregations of the fund equity. A summary of such designations and reservations at <br />December 31, 2009 is as follows: <br />Governmental Activity: <br />General Fund: <br />Reserved for Prepaid Items $ 196,568 <br />Designated for Cash Flow Reserve 5,191,396 <br />135E Interchange : <br />Designated for Capital Improvements 4,192,882 <br />Area and Unit Charge: <br />Reserved for Advance to Other Funds 736,772 <br />Designated for Capital Improvements 2,161,390 <br />Other Nonmajor Governmental Funds: <br />Reserved for Prepaid Items 2,176 <br />Reserved for Debt Retirement 3,457,349 <br />Reserved for Environmental Improvements 100,000 <br />Reserved for Long -Term Notes Receivable 225,000 <br />Designated for Recreation Purposes 93,956 <br />Designated for Capital Improvements 5,420,273 <br />