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NOTE 14—COMMITMENTS AND CONTINGENCIES <br /> A. Federal and State Revenues <br /> Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. <br /> Any disallowed claims, including amounts already collected, may constitute a liability of the applicable <br /> funds.The amount,if any,of claims which may be disallowed by the grantor agencies cannot be determined <br /> at this time, although the City expects such amounts,if any,to be immaterial. <br /> B. Legal Claims <br /> The City has the usual and customary type of miscellaneous legal claims pending at year-end.Although the <br /> outcome of these lawsuits is not presently determinable,the City's management believes that the City will <br /> not incur any material monetary loss resulting from these claims. No loss has been recorded on the City's <br /> financial statements relating to these claims. <br /> C. Tax Increment Districts <br /> The City's tax increment districts are subject to review by the Minnesota Office of the State Auditor. Any <br /> disallowed claims or misuse of tax increments could become a liability of the applicable fund.Management <br /> has indicated that they are not aware of any instances of noncompliance which would have a material effect <br /> on the financial statements. <br /> -65- <br />