08-08-2022 Council Packet - Laserfiche WebLink

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2021 Note 6: Other Information (Continued) All property of the Plan and income attributable to that property is solely the property of the City, subject to the claims of the City’s general creditors. Participants’ rights under the Plan are equal to those of general creditors of the City in an amount equal to the eligible healthcare and dependent care expenses incurred by the participants. The City believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. D. Conditional State Grant In 2005, as a part of the City’s acquisition of Big Island Park, the City was awarded a grant from the state of Minnesota in the amount of $2,000,000. The grant is repayable to the state if the property is not maintained for low -impact recreation and conservation use. E. Police Services Contracts As of December 31, 2019, the City of Orono had severa l contracts to provide police services to neighboring cities. The most significant of those was a contract with the city of Mound, which the City entered into as of January 1, 2013 and which extends 10 years to December 31, 2022. The contract also included annual payments from the city of Mound starting at $1,545,000 in 2013 and increasing between 1%-5% each year through the end of the contract. The City also has a contract with the cities of Minnetonka Beach and Spring Park to furnish law enforcement serv ices to each respective city. The original contract term ended December 31, 2012 and includes the option to verbally extend it each year for an additional one-year period. The contract has been extended each year through 202 1. Note 7: Subsequent Event On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and the risks to the international community as virus spreads globally. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In response to the pandemic, the State of Minnesota has issued stay-at-home orders and other measures aimed at slowing the spread of the coronavirus. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Due to the rapid development and fluidity of this situation, the City cannot determine the ultimate impact that the COVID-19 pandemic will have on its financial condition, liquidity, and future revenue collection, and therefore any prediction as to the ultimate impact on the City’s financial condition, liquidity, and future results of its revenue collections is uncertain. Note 8: Prior Period Adjustment The City’s nonmajor Senior Housing TIF fund and HRA General fund recorded a prior period adjustment related to an interfund loan and land sale agreement, which was approved in previous years but not recorded until 2021. The interfund loan decreased the Senior Housing TIF fund balance by $580,667 and increased the HRA General fund balance by the same amount. DRAFT 81