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<br /> I
<br /> CITY OF ARDEN HILLS, MINNESOTA
<br /> I NOTES TO FINANCIAL STATEMENTS
<br /> DECEMBER 31, 1997
<br /> . Note 5:
<br /> OTHER INFORMA nON
<br /> I A. Risk Management
<br /> The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
<br /> I and omissions; injuries to employees; and natural disasters for which the City carries insurance The City obtains
<br /> insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk
<br /> sharing pool with approximately 800 other governmental units, The City pays an annual premium to LMCIT for
<br /> its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member
<br /> I premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims
<br /> have not exceeded the City's coverage in any of the past three fiscal years.
<br /> I Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
<br /> estimated. An excess coverage insurance policy covers individual claims in excess of$l,OOO,OOO. Liabilities, if
<br /> any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is
<br /> not aware of any incurred but not reported claims.
<br /> I B. Segment Information for Proprietary Funds
<br /> The City provides services which are accounted for in the Enterprise Funds. The segment information for these
<br /> I Enterprise Funds for the year ended December 3 I, 1997 is as follows:
<br /> Surface
<br /> Water
<br /> I Water Sewer Recycling Management Total
<br /> Operating revenue $ 999,386 $ 1,000,408 $ 75,923 $ ] 79,535 $ 2,255,252
<br /> I . Depreciation expense 76,]74 70,124 7,533 153,831
<br /> Operating income 153,394 100,643 6,222 89,8]6 350,075
<br /> Net income before
<br /> transfers ] 98,232 156,474 7,878 93,393 455,977
<br /> I Operating transfers out (72,598 ) (72,598 )
<br /> Acquisition of fixed
<br /> assets (75,533 ) (49,633 ) (125,]66)
<br /> Net working capital 910,492 ],254,191 39,559 118,475 2,322,717
<br /> I Total assets 5,626,496 3,750,227 92,417 ] 63,406 9,632,546
<br /> T ota] equ ity 5,478,565 3,719,381 39,559 ]60,870 9,398,375
<br /> I c. Water Tower Funding
<br /> As of December 31, 1989, the City had incurred expenditures of approximately $843,000 to build a water tower.
<br /> I Also, in 1993 the City incurred additional expenditures of $300,775 for the repair of another water tower.
<br /> Interim fmancing was provided by the Permanent Improvement Revolving Capital Projects Fund (PIR) for both
<br /> projects. It is the intention of the City to provide permanent financing for these projects from the Water
<br /> Enterprise Fund. To date, $982,904 has been transferred to the PIR from the Water Fund.
<br /> I D. Legal Debt Margin
<br /> The City's statutory debt limit is computed as two percent of the taxable market value of property within the
<br /> I City. Long-term debt issued and financed partially or entirely by special assessments or the net revenues of
<br /> enterprise fund operations is excluded from the debt limit computation. There is no outstanding debt at year end
<br /> which is applied against the statutory debt limit.
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