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2014 CAFR
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2014 CAFR
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CITY OF ROSEVILLE, MINNESOTA <br />NOTES TO FINANClAL STATEMENTS <br />December 31, 2014 <br />For governmental activities, other post-employment benefits are liquidated through the general fund. <br />For compensated absences, payments are made from the fund to which the employee is assigned at <br />the time employment ceases. In addition to the general fund, recreation, community development, <br />and all non-major special revenue funds are involved in paying compensated absences. For Insurance <br />claims payables, payments are made from the Worker's Compensation and Risk Management Funds. <br />From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to <br />private-sector entities for the acquisition and construction of industrial and commercial facilities <br />deemed to be in the public interest. The bonds are secured by the property financed and are payable <br />solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, <br />ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. <br />Neither the City, the State, nor any political subdivision thereof is obligated in any manner for <br />repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying <br />financial statements. As of December 31, 2014, there were eleven series of Industrial Revenue <br />Bonds outstanding, with an aggregate principal amount payable of $61.6 million. <br />H. Crossover refunding <br />On April 11, 2013, the City issued $3,980,000 of G.O. Municipal Building Bonds with an interest <br />rate of .7990%. The proceeds were used to crossover refund $4,750,000 of outstanding G.O. Building <br />Bonds, Series 2003A which had interest rates of 3.750% to 4.125%. The net proceeds were <br />deposited into a Crossover Escrow Fund with an escrow agent to provide payment of the principal <br />maturities and interest of the refunded bonds on the call date of March 1, 2014. The difference in <br />cash flows required to service the old debt and the new debt will be $548,700. The refunding <br />resulted in a net present value savings of $317,634. <br />Note 4 OTHER INFORMATION <br />A. Risk management <br />The City is exposed to various risks of loss related to torts; theft of damage to, and the destruction of <br />assets; errors and omissions; injuries to employees and natural disasters. During the fiscal years of <br />1980 and 1987, the City established a Workers' Compensation Fund and a Risk Management Fund, <br />respectively (internal service funds) to account for and finance its uninsured risks of loss. For the <br />year 2013, the Worker's Compensation Fund provided coverage up to a maximum of $470,000 for <br />each occurrence. The City purchases excess loss coverage from the Workers' Compensation <br />Reinsurance Association, a nonprofit organization established by Minnesota State Statutes. <br />The Risk Management Fund provides comprehensive general liability and comprehensive autoinotive <br />liability up to the statutory maximum of $1,500,000. The City retains the i-isk of the first $100,000 of <br />each occurrence with an annual maximum exposure of $200,000. Liabilities of the fund are reported <br />it is probable that a loss has occurred and amount of the loss can be reasonably estimated. <br />Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result <br />of the process to estimate the claims liability is not an exact amount as it depends on many complex <br />59 <br />
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