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NOTE 7 — COMMITMENTS AND CONTINGENCIES - A. Legal Claims The. City has the usual. and customary type.:pf -miscellaneous. legal claims pending at year-end. Although. the..outc�ome.of these lawsuits is not presently determinable, the City's management believes that the City .will not incur :any material monetary loss resulting from these claims. No loss has been recorded on the. Cityrs financial statements relating to these claims. B. Federal and State .Funds. Amounts recorded or.receivable from federal and state.. agencies are. subject to agency audit and adjustment. Any disallowed claims, including amounts already. collected; may constitute a liability of the applicable funds. The amount, if any, of claims which may. Lwdisallowed by the. grantor agencies cannot be determined at this time; although the City expects such amounts, if any, to be Int# terial. C. Construction Commitments At December 31., 2021,.the City is cQmmitfed to various construction contracts for the improvement of city property. The City's reitWning coinmitiment iirider these contracts -is $9,643. NOTES — SUBSEQUENT EVENTS A. NewAccognting Standards A new 'staridard has liven issued by the GASB that will result in significant changes in the reporting of {� leases.. once. it becomes. effective for. governmental entities. This standard will be adopted by the City beginning an02, and will:reguire the restatement of certain balances reported as of December 31, 2.021.. The effects .Qf xhis change. have. -not yet been determined. and. are not reflected in .these financial statements. B. COVID-19 Pkidemie The CO`VID-19 pandemic -has had.signifcant financial and operational impacts on the City for the last two fiscal years. Any potential impacts it may have:on-the City's future operations and .financial condition cannotbe determined at this time and has not: been..reflected in these financial statements. -3.0-