07-26-1999 Council Packet - Laserfiche WebLink

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CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31,1998 I I NOTE 12 - COMMITMENTS AND CONTINGENCIES A. General Amounts recorded or receivable from 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 be disallowed by the grantor agencies cannot be determined at this time although the City expects such amounts, if any, to be immaterial. B. Construction During the year ended December 31, 1998, the City awarded certain contracts for various construction projects. The City ’s commitment for uncompleted work on these contracts at December 31, 1998 was $741,349. C. Facility Lease During the year ended December 31, 1991, the City entered into an unconditional lease with the Housing and Redevelopment Authority of Orono for the City Hall and the police and public works faciliti. s. The lease was amended in 1998 revising the minimum required lease payments, with an option to purchase, continues until February 1, 2008 or until terminated through cancellation by not appropriating sufficient funds for payment, defeasance, default, or purchase of the project by the City. The City is responsible for the insurance, utilities, and maintenance of the property. The rent expense in 1998 was $406,903. Future minimum rental commitments under the lease are as follows: Year Amount 1999 2000 2001 2002 2003 Thereafter $ 187,757 145,360 124,753 397,995 395,335 1,995,753 $ 3,246,953 The lease purchase payments will equal the principal and interest due on the 1991 - HRA Public Facilit.es Revenue Bonds issued to construct the facilities and then the 1998 - HRA Public Facilities Revenue Refunding Bonds upon the reftmding cross over date in 2001. -47- I I I I J ] I