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CITY OF ST. ANTHONY, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2009 <br />Note 10 CONTINGENCIES <br />A. RISK MANAGEMENT <br />The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of <br />assets; errors and omissions; injuries to employees; and natural disasters. <br />Workers compensation coverage is provided through a pooled self - insurance program through the <br />League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to the <br />LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The <br />LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by <br />law. The City has no deductible and a managed care program to assist employees with their <br />rehabilitation plan. Annual employee hours of service are audited and final premiums are then <br />determined. The amount of premium adjustment, if any, is considered immaterial and not recorded <br />until received or paid. <br />Property, casualty and automobile insurance coverage are provided through a pooled self - insurance <br />program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to <br />supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through <br />commercial companies for claims in excess of various amounts. The City retains risk for the <br />deductible portions. These deductibles are considered immaterial to the financial statements. <br />The City continues to carry commercial insurance for all other risks of loss, including liquor liability, <br />employee health and disability insurance. <br />There were no significant reductions in insurance from the previous year or settlements in excess of <br />insurance coverage for any of the past three fiscal years. <br />B. LITIGATION <br />The City has indicated that existing and pending lawsuits, claims and other actions in which the City is <br />a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City, <br />remotely recoverable by plaintiffs. <br />C. FEDERAL AND STATE FUNDS <br />The City receives financial assistance from federal and state governmental agencies in the form of <br />grants. The disbursement of funds received under these programs generally requires compliance with <br />the terms and conditions specified in the grant agreements and are subject to audit by the grantor <br />agencies. Any disallowed claims resulting from such audits could become a liability of the applicable <br />fund. However, in the opinion of management, any such disallowed claims will not have a material <br />effect on any of the financial statements included herein or on the overall financial position of the City <br />at December 31, 2009. <br />75 <br />