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CITY OF RAMSEY Notes to Financial Statements (continued) December 31, 2001 NOTE 18 — COMMITMENTS AND CONTINGENCIES (CONTINUED) C. Legal Claims The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although the outcome of these lawsuits is not presently determinable, the City's management believes that the City will not incur any material monetary loss resulting from these claims. No loss has been recorded on the City's financial statements relating to these claims. D. Condemnation Action The City is currently involved in a lawsuit relating to a condemnation of property in 1998 for right-of- way and related drainage facilities for the construction of County Road 116. The landowner, who is seeking between $750,000 and $1,000,000 in damages, has appealed the original decision, awarding damages of $126,000 paid by the City in 2000. As the present time, the City cannot reasonably determine the level of additional exposure it has with this case. Therefore, no additional liability has been accrued as of December 31, 2001. E. Centralized Law Enforcement Records System The City of Ramsey has entered into an agreement with the County of Anoka, and the following cities located within the county: Anoka, Blaine, Circle Pines, Centerville, Columbia Heights, Coon Rapids, Fridley, Lexington, Lino Lakes, St. Francis (including Bethel), and Spring Lake Park. The purpose of this agreement is to provide for the joint financing of a centralized law enforcement records system and to provide for the sharing of the ongoing costs of the system. Under the terms of the agreement, the City of Ramsey has committed to pay the County approximately 5% of the combined total shared costs of the participating entities annually beginning in fiscal year 2000 for a period of four years. NOTE 19 — FUTURE REPORTING REQUIREMENT The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements -and Management's Discussion and Analysis -for State and Local Governments in June 1999. This is one of the most significant changes to occur in the history of governmental financial reporting. The basic financial statements, consisting of the government -wide financial statements, fund financial statements and notes to the financial statements will replace the current general purpose financial statements. The government -wide financial statements, consisting of a statement of net assets and a statement of activities will be prepared using the economic resource measurement focus and the accrual basis of accounting. Fund financial statements will consist of a series of statements that focus on information about the City's major funds. Certain additional disclosures relating to GASB Statement No. 34 will be required in the notes to the financial statements. The City will implement GASB Statement No. 34 for fiscal year ending December 31, 2004. -36-