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<br />Note 5:
<br />
<br />CITY OF ARDEN HILLS, MINNESOTA
<br />NOTES TO FINA!--:CIAL STATEMENTS
<br />DECEMBER 31,2002
<br />
<br />OTHER INFORMA nON
<br />
<br />A. Risk Management
<br />
<br />The City is exposed to various risks ofloss related to torts; 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 />insmancc throngh participation in the League of Minnesota Cities Insmancc Trust (LMCiT), which is a risk
<br />sharing pool with approximately 800 other governmental units. The City pays an annnal 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.
<br />
<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 claims that have been incurred but not reported (IBNRs).
<br />The City's management is not aware of any incurred but not reported claims.
<br />
<br />B. Segment Information for Enterprise Funds
<br />
<br />The City provides services} which are accounted for in four enterprise funds. The segment information for these
<br />enterprise funds for the year cnded December 31, 2002 is as follows:
<br />
<br /> Surface
<br /> Water
<br /> Water Sewer Recvcline: Manae:ement Total
<br /> Operating revenue $ 976,107 $ 873,987 $ 43,996 $ 208,536 $ 2,102,626
<br /> Depreciation expense 87,808 94,714 2,830 185,352
<br /> Operating income (loss) 24,583 (117,92 I) (35,034 ) 114, I 69 (14,203)
<br /> Operating grants 18,891 18,891
<br /> Net income (loss) 80,849 (60,128) (14,310) 135,924 142,335
<br /> Acquisition of fixed assets 59,405 63,656 66,501 189,562
<br /> Net working capital 1,437,196 1,597,123 54,113 599,864 3,688,296
<br /> Total assets 6,226,977 4,596,918 105,532 672,979 11,602,406
<br /> Total equity 6,071,952 4,500,643 54,113 666,016 11,292,724
<br />C. Legal Debt Margin
<br />
<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 issned and financed partially or entirely by special assessments or the net revennes of enterprise
<br />flUld operations is excluded from the debt limit computation. There is no ontstanding debt at year end that is
<br />applied against the statutory deht limit.
<br />
<br />D. New Reporting Standard
<br />
<br />In JlUle 1999, the Governmental AeeolUlting Standards Board (GASB) issned Statement 34 "Basic Financial
<br />Statement and Management's Discussion and Analysis for State and Local Govennnents." This Statement
<br />establishes new financial reporting requirements for state and local govennnents throughout the United States.
<br />When implemented, it will require new information and restructure much of the infonnation that governments
<br />have presented in the past. Comparability \"-vith reports issued in all prior years 'Nill be affected. The Cit<j is
<br />required to implement this standard for the fiscal year ending December 3 I, 2004. The City has not yet
<br />determined the full impact that the adoption of GASB Statement 34 will have on the financial statements. These
<br />fmancial statements are presented in accordance with the financial reporting model in effect prior to that
<br />descrihed in GASB Statement No. 34.
<br />
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