07-27-1998 Council Packet - Laserfiche WebLink

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r I I CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31, 1997 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 certain 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 tne League 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 Ti>.st agreement provides that the Trust will be self-sustaining tlvough member premiums and will reinsure through commercial companies for claims in excess of certain limits. The major reinsurance points are generally $200,000 per occurrence for property loss or damage and $450,000 per occurrence for workers’ compensati n. The City also carries commercial insurance for certain other risks of loss, including employee health insurance and liquor liability. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. There were no significant reductions in the City ’s insurance coverage in 1997. ) I -34-