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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2013 <br />Note 6: OTHER INFORMATION <br />A.Risk management <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-sustainingthrough member premiums and will reinsure for <br />claims above a prescribed dollar amount for each insurance event.Settled claims have not exceeded the City’s coverage <br />in any of the past three fiscal years. <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 City’s <br />management is not aware of any incurred but not reported claims. <br />B.Legal debt margin <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 theCity.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 $292,948,400which leaves a debt margin of $8,788,452.Currently the City has <br />$455,000 of general obligation debt outstanding, leaving a debt margin of $8,333,452. <br /> <br />