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CITY OF CENTERVILLE, MINNESOTA
<br /> NOTES TO FINANCIAL STATEMENTS
<br /> DECEMBER 31, 1999
<br /> Note 5: 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
<br /> and omissions; 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 units. The City pays an annual premium to LMCIT for
<br /> its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member
<br /> premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims
<br /> have not exceeded the City's coverage 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).
<br /> The City's management is not aware of any incurred but not reported claims.
<br /> B. Segment Information for Enterprise Funds
<br /> Water Sewer Total
<br /> Operating revenue $ 343,308 $ 497,767 $ 841,075
<br /> Depreciation expense 21,965 15,644 37,609
<br /> Operating income 249,100 257,420 506,520
<br /> Net income 207,728 254,367 462,095
<br /> Fixed asset additions 80,889 16,483 97,372
<br /> Bonds payable 324,000 396,000 720,000
<br /> Net working capital 729,445 1,228,936 1,958,381
<br /> Total assets 2,134,390 2,642,771 4,777,161
<br /> Total equity 1,574,811 1,951,713 3,526,524
<br /> C. Legal Debt Margin
<br /> In accordance with Minnesota Statutes, the City may not incur or be subject to net debt in excess of two percent
<br /> of the market value of taxable property within the City. Net debt is payable solely from ad valorem taxes and,
<br /> therefore, excludes debt financed partially or entirely by special assessments, enterprise fund revenues or tax
<br /> increments. The City does not have any debt subject to the 2% limit.
<br /> Note 6: FIRE PROTECTION DISTRICT
<br /> In 1985, the City discontinued providing the fire protection services to the Centerville community. The City joined the
<br /> Centennial Fire District, along with the cities of Circle Pines and Lino Lakes. The City contributed all fire apparatus
<br /> and equipment items to the fire district. The City in turn will be receiving payments, from the district of $2,270 for 15
<br /> years on the apparatus values and $4,973 for 10 years on the equipment values. The City Council passed a resolution
<br /> to have these funds recorded in the City's fire capital projects fund. These payments are recognized as revenue when
<br /> they are received.
<br /> The City pays an annual membership fee to the fire district based on their percentage of the computed annual
<br /> depreciation on the apparatus and equipment values. The fire district still houses equipment in the City's building and
<br /> pays for a share of the utilities.
<br /> Note 7: COMMITMENTS
<br /> In 1997, the City entered into a Joint Powers agreement with the Anoka County Housing and Redevelopment Authority
<br /> (ACHRA) to provide senior housing to the City. The ACHRA has issued $1,290,000 of Housing Development
<br /> Revenue Bonds to provide for construction costs of the project. The City has reserved $71,631 in the Sewer Enterprise
<br /> Fund in accordance with the agreement with ACHRA. This amount is to be used in the event revenue is not sufficient
<br /> to cover operating expenses and debt service. The City would also be liable for any deficit above the amount reserved.
<br /> This commitment exists until December 31, 2012. No expenses were incurred relating to the commitment in 1999 or
<br /> 1998.
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