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<br />CITY OF ARDEN HILLS, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />DECEMBER 31, 2001
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<br />A.
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<br />Risk Management
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<br />NoteS:
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<br />OTHER INFORMATION
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<br />The City is exposed to various risks ofloss related to torrs; theft of, damage to and destruction of assets; errors
<br />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, Tbe 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 />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.
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<br />Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
<br />estimated, Liabilities, if any, include an amount for claima that have been incurred but not reported (IBNRs),
<br />The City's management is not aware of any incurred but not reported claima,
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<br />B. Segment Information for Enterprise Funds
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<br />The City provides services, which are accounted for in four enterprise funds, The segment information for these I
<br />enterprise funds for the year ended December 31,2001 is as follows:
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<br /> Surface I
<br /> Water
<br /> Water Sewer Recvcling Management Total
<br /> Operating revenue $ 1,177,034 $ 989,253 $ 54,423 $ 190,621 $ 2,411,331 .
<br /> Depreciation expense 85,739 100,629 9,927 196,295
<br /> Operating income (loss) 110,223 8,007 (12,545) 130,518 236,203
<br /> Operating grants 51,305 19,418 70,723 ..
<br /> Net income (loss) 233,826 90,007 10,809 158,614 493,256
<br /> Acquisition of fixed asscts 102,830 187,702 290,532
<br /> Net working capital 1,327,944 1,626,193 68,423 527,611 3,550,171
<br /> Total assets 6,173,785 4,591,989 118,977 534,458 11,419,209 I
<br /> Total equity 5,991,103 4,560,771 68,423 530,092 11,150,389
<br />C. Water Tower Funding
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<br />As of December 31, 1989, the City had incurred expenditures of approximately $843,000 to build the Fernwood I
<br />Avenue water tower. Also, in 1993 the City incurred additional expenditures of $300,775 for the repair of the
<br />Red Fox Road water tower. Interim fmancing was provided by the Permanent Improvement Revolving Capital
<br />Projects Fund (PIR) for both projects. It is the intention of the City to provide permanent financing for these .
<br />projects from the Water enterprise fund, To date, $1,250,252 has been transferred to the PIR from the Water
<br />fund,
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<br />The City's statutory debt limit is computed as two percent of the taxable market value of property within the City,
<br />Long-term debt issued and financed partially or entirely by special assessments or the net revenues of enterprise
<br />fund operations is excluded from the debt limit computation, There is no outstanding debt at year end which is
<br />applied against the statutoty debt limit
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<br />D, Legal Debt Margin
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