06-09-1997 Council Packet - Laserfiche WebLink

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^0 CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31, 1996 NOTE 1 - SlGNmCANT ACCOUNTING POLICIES (CONTINUED) Improvement and Equipment Capital Outtay Fund - The budget was increased to provide for police department reimbursement of costs related to the conversion to a stand alone record keeping system. Building Capital Outlay Fund - The budget was increased to provide for additional groundwater sampling, prevention of soil and groundwater contamination, and monitoring of wells at the old city hall site. M. Memorandum Only Columns Because the accounting system is organized and operated on a fund basis, the columns on the combined financial statements captioned, “Totals (Memorandum Only)," are presented for informational purposes only and are not intended to represent consolidated information. Data in these columns does not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. N. Comparative Data/Reclassifications Comparative total data for the prior year has been presented in the accompanying financial statements in order to provide an understanding of changes in the City ’s financial position and operations. However, comparative data has not been presented in all statements because its inclusion would make ceruin statements unduly complex and difficult to understand. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year ’s presentation. O. Statement of Cash Flows For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase by the City of three months or less to be cash equivalents. The Proprietary Funds’ portion in the Citywide cash and investment management pool is considered to be cash equivalent. P. Risk Management 'The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets: errors and omissions; and natural disasters. The City participates in the Uague of Minnesota Cities Insurance Trust (LMC Trust), a public entity risk pool for its general property and casualty, workers ’ compensation, and other miscellaneous insurance coverages. The LMC Trust operates as a common risk management and insurance program for approximately 780 cities. The City pays an annual premium to the LMC Trust for insurance coverage. The LMC Trust agreement provides that the Trust will be self- sustaining through member premiums and wUl reinsure through commercial companies for claims in excess of certain limits. The major reinsurance points are generally $200,(XX) per occurrence for property loss or damage and $540,000 per occurrence for workers ’ compensation. -34- 1 I >1 i II n ti ti m 4 » I