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<br />CITY OF ARDEN !!ILLS, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />DECEMBER 31.2003
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<br />Note S: OTHER INFORMATION
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<br />A. Risk Management
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<br />The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
<br />and onUssions; 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 nnits. The City pays an annual premiwn to LMCIT for
<br />its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member
<br />premiwns and will reinsure for claims above a prescribed dollar amount fOT each insurance event. SettJed claims
<br />bave 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 claims that have been incurred but not reported (IBNRs).
<br />The City's management is not aware of any incurred but not reported claims.
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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 infonnatlon for these
<br />enterprise funds for the year ended December 31, 2003 is as follows:
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<br /> Surface
<br /> Water
<br /> Water Sewer Recvcline Manaeement Total
<br /> Operating revenue $ 1,115,163 $ 848,976 $ 107,986 $ 178,782 $ 2,250,907 .
<br /> Depreciation expense 89,073 89,891 1,793 180,757
<br /> Operating income (loss) 21,821 (247,614 ) 10,515 81,126 (134,152)
<br /> Operating grants 16,669 16,669
<br /> Net income (loss) 52,277 (238,087 ) 27,051 89,194 (69,565 )
<br /> Acquisition of fixed assets 26,389 477,881 346,078 850,348
<br /> Capital assets contributed 236,623 451,113 687,736
<br /> Net working capital 1,299,841 ] ,223.363 81,164 344,773 2,949,141
<br /> Total assets 6,278,380 4,640,657 81,980 1,219,222 12,220,239
<br /> Total equity 6,360,854 4,262,554 81,164 1,206,323 11,910,895
<br />C. Legal Debt Margin
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<br />The City's statutnry debt limit is computed as two percent of the taxable market value of property within the City.
<br />Long~tenn debt issued and financed partially or entirely by special assessments or the net revenues of enterprise
<br />fund operations is excluded fTom the debt limit computation. There is no outstanding debt at year end that is
<br />applied against the statutory debt limit.
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<br />D. New Reporting Standard
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<br />In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement 34 "Basic Financial
<br />Statement and Management's Discussion and Analysis for State and Local Govenunents.... This Statement
<br />establishes new fmancial reporting requirements for st.ate and local governments throughout the United States.
<br />When implemented. it will require new information and restructure much of the information that governments
<br />have presented in the past. Comparability with reports issued in all prior years will be affected. The City is
<br />required to implement this standard for the fiscal year ending December 31, 2004. The City has not yet
<br />detennined the full impact that the adoption of GASB Statement 34 will have on the financial statements. These
<br />financial statements are presented in accordance with the fmancial reporting model in effect prior to that
<br />described in GASB Statement No. 34.
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