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—.'r -T' <br />CITY OF ORONO. MINNESOTA <br />Notes to Financial Statements (continued) <br />December 31, 1994 <br />NOTE 13 - COMMITMENTS AND CONTINGENCIES <br />t <br />A.General <br />Amounts recorded or receivable from state agencies are subject to agency audit and adjustment. Any <br />disallowed claims, including amounts already collected, may constitute a liability of the applicable hinds. <br />The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined <br />at this time although the City expects such amounts, if any, to be immaterial. <br />B.Construction <br />During the year ended December 31, 1994, the City awarded certain contracts for various construction <br />projects. The City ’s commitment for uncompleted work on these contracts at December 31, 1994 was <br />approximately $463,000. <br />C.Facility Lease <br />During the year ended December 31, 1991, the City entered into an unconditional lease with the Housing <br />and Redevelopment Authority of Orono for the City Hall and the police and public works facilities. The <br />lease with an option to purchase continues until February 1.2008 or until terminated through cancellation <br />by not appropriating sufficient funds for payment, defeasance, default, or purcha.se of the project by the <br />City. The City is responsible for the real estate taxes, insurance, utilities, and maintenance of the <br />property. The rent expen.se in 1994 was approximately $394,135. <br />Future minimum rental commitments under the lease are as follows: <br />V ! <br />Year Amount <br />1995 <br />1996 <br />1997 <br />1998 <br />1999 <br />Thereafter <br />$ 396.266 <br />402.455 <br />402,700 <br />406,903 <br />405,017 <br />3,704.484 <br />$ 5,717.825 <br />The lease purchase payments will equal the principal and interest due on the 1991 - HRA Public Facilities <br />Bonds issued to construct the facilities. <br />-55- <br />! <br />1 <br />I <br />I <br />i <br />il <br />I <br />1