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CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 3 I, 2004 n A, Risk Management - n Note 5: OTHER INFORMATION The City is exposed to various risks ofloss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance, The City obtains r1[ insurance throngh participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sbaring pool with approximately 800 other governmental units, The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance, The LMCIT is self sustaining throngh member premiums and [1 will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded . the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably [....1 estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. [.1 B. Legal Debt Margin I The City's statutory debt limit is computed as two percent of the taxable market value of property within the City, [I Long-term debt issued and financed partially or entirely by special assessments or the net revenues of enteIprise fimd operations is excluded from the debt limit computation. There is no outstanding debt at year end that is applied against the statutory debt limit. C. Commitments u Ice Arena Financing ~ The City, along with three other cities and Ramsey County, entered into an agreement January 1, 1997 with the Minnesota Amateur Sports Commission to provide fmancing of a four sheet ice arena. The agreement provides for rental income to cover principal, interest and operating expenses, In the case of default, each City will be responsible for a specific portion of the debt. Arden Hills' percentage is 15.5 percent of one of the four sheets and the amount of the debt will not exceed $9,000,000 for all four sheets in the complex. No expenditures were incurred under this commitment in 2004. [1 J D. Lake Johanna Volunteer Fire Department, Ine. [l The City receives fIre protection under a contract with the Lake Johanna Volunteer Fire Department, Inc. The [j contract calls for annual payments and expires December 31, 2008 and allows renewal for two additional fIve-year periods. The contract cost will be based on the budget submitted by the fire department and approved by the City. Capital costs are billed separately in addition to the contract rate, The amount expended under the contract was [ II' $219,736 in 2004, [ 1 IJ , , -: Li. -32.