05-26-2015 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014 Note 15 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 League 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 •' xcess of various amounts. The City retains risk for the deductible portion of the insurance policies and for exclusions from the insurance policies. These amounts are considered immaterial to the financial statements..-' The City continues to carry commercial insurance health insurance. for all other ri disability and employee 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 16 PROPERTY UNDER LEASE AGREEMENT The City entered into an agreement to lease space within the City Hall Complex to New Creations Child Care and Learning Center, LLC. The lease is dated July 1, 2014 and continues through June 30, 2019. The lease requires escalating annual lease payments of between $5.94 and $8.65 per square foot over the lease term, for a total of $325,021. Property under operating lease and held for lease consist of the following: 2014 Building $ 929,970 Less: Accumulated Depreciation (464,985) Total $ 464,985 Approximate future minimum lease payments receivable under the noncancelable operating lease are as follows: Year Ending December 31, 2015 2016 2017 2018 2019 56 Amount 59,020 71,091 73,223 75,420 38,267 $ 317,021