1998 CAFR - Laserfiche WebLink

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RISK MANAGEMENT The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers' compensation, and other miscellaneous insurance coverages. The LMCIT operates as a common risk management and insurance program for approximately 780 cities. The City pays an annual premium to the LMCIT for insurance coverage. The LMCIT agreement provides that the Trust will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. The City has elected higher deductibles through the LMCIT in order to keep premiums at a minimum. To supplement the commercial coverages, the City established the Self-Insurance Internal Service Fund. Premiums for the LMCIT policies are not paid from this Fund, but rather are budgeted and paid from the respective operating funds. The City also carries commercial insurance for certain other risks of loss, including employee health insurance. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. Net bonded debt per capita and the percentage of net debt to the tax capacity and market value are useful indicators of the City's debt position to municipal management, citizens, and investors in city bonds. Debt statistics. are listed as follows: Net Bonded Debt per Capita $ 252.41 Ratio of Net Bonded Debt to Tax Capacity 46.22% Ratio of Net Bonded Debt to Market Value 0.66% The following is a summary of bonded debt for fiscal year 1998: Gross Debt Outstanding, January 1, 1998 $ 5,110,000 Add Bonds Issued - 1998 - Deduct Bonds Redeemed - 1998 ~415,000~ Gross Debt Outstanding, December 31, 1998 4,695,000 Less Amounts Available in Debt Service Funds, December 31, 1998 (157) Net Bonded Debt, December 31, 1998 $ 4,694,843 The City has a current Moody's Investors Service bond rating of Al, which was last increased during 1993. This above average rating has had a positive effect on the sale of the City's bonds by broadening the City's market and lowering the interest rates on borrowing. TAX INCREMENT DISTRICTS The City has one development district which was created in accordance with State Statute 472. Within this district are five tax increment financing districts, three of which are for redevelopment and two for economic development. These tax increment financing districts capture increments from residential and commercial development that occur within the districts. As of December 31, 1998, the City had one financing district decertify, leaving the City accountable for the reporting of five financing districts. -x-