2004-04-28 WS & CC Meeting - Laserfiche WebLink

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CITY OF CENTERVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 Note 5: CHANGE IN ACCOUNTING PRINCIPLE During fiscal year 2003, the City implemented several new accounting pronouncements issued by the Government Accounting Standards Board (GASB). They are Statement No. 34, "Basic Financial Statements - and Managements DiscussiDn and Analysis -for State and Local GovemmenJs ", Statement No. 37, "Basic Financial Statements - and Management's Discussion and Analysts -for State and Local Governments: Omnibus ", and Statement No. 38, "Certain Financial Statement Note Disclosures ", paragmpbs 6 through II. Because of implementation of the new standards, an adjustmenl is required for the December 31, 2002, carry forward (net asset) balance of the governmental funds. The following schedule reconciles the January 1,2003 balance to the December 31, 2002 net asset balance using the new accounting standards. Fund balance, December 31, 2002 Adjustments: Net book value of capital assets Bonds payable, net Accrued interest Compensated absences payable Deferred revenue on special assessments Deferred revenue on laxes $ 3,812,033 5,376,951 (2,932,237) (58,139) (14,347) 97,067 31.781 Total net assets as restated, January 1,2003 S 6113 109 Note 6: OTHER INFORMATION A. Risk Management 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 insurance through participation in the League of Minnesota Cities Insurance Trost (LMCIT), which is a risk sbaring pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its womrs compensation and property and casualty insurance. The LMCIT is self sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event SeUled 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 estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (ffiNRs). The City's management is not aware of any incurred but not reported claims. B. Legal Debt Margin In accordance with Minnesota sta1ntes, the City may not incur or be subject to net debt in excess of2 percent of the market value of taxable property within the City. Net debt is payable solely from ad valorem laxes and, therefore, excludes debt financed partially or entirely by special assessments, enterprise fund revenues or lax increments. The City does not have any debt subject to the 2 percent limit Note?: FIRE PROTECTION DISTRICT In 1985, the City discontinued providing the fire protection services to the Centerville colllDlUIlity. The City joined the Centennial Fire District (District), along with lbe cities of Circle Pines and Lino Lakes. The City conJributed all fire apparams and equipment items to the DistricL The City pays an annual membership fee to the District based on their percentage of the computed annual depreciation on the apparams and equipment values. The District still houses equipment in the City's building and pays for a share of the utilities.