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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2012 <br />Note 6: OTHER INFORMATION <br />A.Risk management <br /> <br />The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and <br />omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance <br />through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is a risk sharing pool with <br />approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation <br />and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for <br />claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the Citys coverage <br />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). The Citys <br />management is not aware of any incurred but not reported claims. <br /> <br /> B. Legal debt margin <br /> <br />In accordance with Minnesota statutes, the City may not incur or be subject to net debt in excess of 3 percent of the <br />market value of taxable property within the City. Net debt is payable solely from ad valorem taxes and, therefore, <br />excludes debt financed partially or entirely by special assessments, Enterprise fund revenues or tax increments. The <br />market value of taxable property is $312,695,800 which leaves a debt margin of $9,380,874. Currently the City has <br />$1,024,980 of general obligation debt outstanding, leaving a debt margin of $8,355,894. <br /> <br /> C. Tax increment districts <br /> <br />The City is the administering authority for tax increment financing district No.1-6. The district is a redevelopment <br />district established in 2005. The property in the district is tax exempt; therefore there is no tax capacity. <br /> <br />o review by the State of Minnesota Office of the State Auditor (OSA). Any <br />disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated <br />that they are not aware of any instances of noncompliance which would have a material effect on the financial <br />statements. <br /> <br /> <br /> <br /> <br />-69- <br /> <br />