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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2013 NOTE 4- DETAII.ED NOTES ON ALL FUNDS (Continued) G. Long-term debt (Continued) For governmental activities, other post-employment benefits are liquidated through the general fund. For compensated absences, payments are made �rom the fund to which the employee is assigned at the time employment ceases. In addition to the general fund, recreation, community development, and all non- major special revenue funds are involved in paying compensated absences. From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to privat�sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2013, there were eleven series of Industrial Revenue Bonds outstanding, with an aggregate principal amount payable of $61.6 million. H. Crossover refunding On April 11, 2013, the City issued $3,980,000 of G.O. Municipal Building Bonds with an interest rate of .7990%. The proceeds were used to crossover refund $4,750,000 of outstanding G.O. Building Bonds, Series 2003A which had interest rates of 3.750°10 to 4.125°Io . The net proceeds were deposited into a Crossover Escrow Fund with an escrow agent to provide payment of the principal maturities and interest of the refunded bonds on the call date of March l, 2014. The refunding resulted in a net present value savings of $317,634. NOTE 5 - OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts; theft of damage to, and the destruction of assets; errors and omissions; injuries to employees and natural disasters. During the fiscal years of 1980 and 1987, the City established a Workers' Compensation Fund and a Risk Management Fund, respectively (internal service funds) to account for and finance its uninsured risks of loss. For the year 2013, the Worker's Compensation Fund provided coverage up to a maximum of $470,000 for each occurrence. The City purchases excess loss coverage from the Workers' Compensation Reinsurance Association, a nonprofit organization established by Minnesota State Statutes. The Risk Management Fund provides comprehensive general liability and comprehensive automotive liability up to the statutory maximum of $],500,000. The City retains the risk of the first $]00,000 of each occurrence with an annual maximum exposure of $200,000. Liabilities of the fund are reported when it is probable that a loss has occurred and amount of the loss can be reasonably estimated. 63