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CITY OP ROSBVILLB NOTHS TO PINANCIAL STARBMHNTS DBC6MBSA 31. 1994 N t ] - Lonq-Texm Debt (Continuedl Aeczued vacation and eeverance pay addition ie net o£ any changee within the related employee benefit accounte for the year. On PebHazy 10, 1994, the City ieeved $8,640,000 in general obligation bonde with an average interest rate of 4.23i to refvnd $8,640,000 of general obligation improvement bonde with average intereet raGee zanging fsom 6.034 to ].086. The net proceede of $8,553,600 (a£[er payment of $86,40o in diecomte, legal ac�d other ieevance coete) plue additional Eunde on hand of $281,698.]5, wese ueed to pur<haee U.S. Govesnment aecurities. Those eecuritiee were depoeited in an irrevocable trust with an eecrow agent to provide for all future debt aervice paymente on General Obligation Impmvement Seziea 14,15.16, and 1'/. Ae a reeult, theee Series o£ bonde are eonaidezed paid and the liability for thoee bonde has been removed from the general long tesm debt account group. The advance refunding of the general obligation impmvement 6onde will redute the total debt eervice paymente over the next 12 yeaze by $1,046,183 and obtained an economic gain (diEference between the preeent value o£ the debt eervice paymente on the o1d and new debt) o£ $'/52,118. The City defeaeed eeveral debt ieevee in 1990 and called two ieeuee; one in 1990 and one in 1991. The balance of defeaeed debt outetanding ae o£ Decembez 31. 1994 ie 5344.�58. Total aeeete in the eecmw ae of Decembes 31, 1994 have a book value of 53'11,41'I. It ie expected that interee[ earninge on the aeaete combined vith the pzintipal will provide more than euf£icient revenue for the life of the eecrow. Note e- Defined Benefit Penaion Plane - Statewide A. Plan Deecription All full-time and eertain part-time employeee of the City are covered by defined beneEit peneion plane adminietered by the Public employeee Retirement Aaeociation of Mi�eeota (P%RA). PaItA a�inieteza the Public Bmployeee Retirement Pund (PHRF) and the Pubic 6mployeea Police and Pire Pund (PSPPP) which are coet eharing multiple-employer retixement plans. P6RF members belong to either the Coordinated Plan oz the Baeic Plan. Coozdinated membere are covered by Social Security and Haeic membere aze not. All new membexe muet participate in the Coordinated Plan. All police officere, fixe fightera and peace o£fieere who qualify for membezehip by s[atute are covered by the PaPFP. The payroll for employeee covered by PSRP and P6PPP Eoz the year ended Decembez 31, 1994, wae $3,38'/,134 and $2,241,413 reepeetively: the City'e total payroll wav $5,839,154. pera pmvidee retirement bene£ita ae well ae dieability bene£ite to membera, and benefits to eurvivoxe upon death o£ eligible membere. SeneEits are eetabliehed by State Statute, and veet after thzee yeare oE czedited aervice. The defined retirement bene£ite are baeed on a member'e higheet average ealary Eor any five eucceeaive yeare of allowable service, age, and yeare of credit at tezmination oP eervice. 14ro methode are ueed to compute bene£ite for Coordinated and easic membere. The retizing member zeceivee the higher o£ etep-rate beneEit accrual foxmula (Me[hod 1) or a level accrual foxmula (Method 2). Under Method 1, the annuity actxual rate £or a Saeic member ie 2 pereent o£ average salary for eaeh o£ the £iret 1� yeare of service and 2.5 pexcent for each remaining year. Por a Coordinated mamber, the azmuity aecrual rate is 1 percent of average ealary for each o£ the Eirat i0 yeare and 1.5 percent for each zemaining year. Ueing Method 2, the annuity accsual rate ie 2.5 peicent o£ avexage ealary fox Baeic membeie and 1.5 percent for Coozdinated membeie. Por PHPPP members, the azss�uity acerual rate ie 2.65 percent £or each yeaz o£ eerviee. Poz PHRP membere -whoee axu�uity ie calculated using Method 1, and for all P6PPP membere, a full axu�uity ie available when age plue years of eervice equal 90. There are diF£erent typee of azmuitiee available to membere upon retirement. A normal azu�uity ie a lifetime annuity [hat ceaees upon [he death of the retiree. No eurviwr annuity ie payable. There are aleo various types of joint and eurvivor annuity optione available whith will reduce the monthly normal azinuity amount, beca�ee the az�nuity ie payable over joint livae. Membere may aleo leave theiz contributione in the £und upon texmination of pablic eervice, in order to quali£y for a deferred a*uiuity at retirement age. ReFunda of contributione are available at any time to members who leave public eervice, but before retirement beneEits begin. B. Contributione Required and Contiibutione Made Mimmeeota Statutee Chapter 353 eete the ratee foz employer and employee contributions. The City makes acu�ual contributione to the peneion plane equal to the amount required by etate atatvea. According to MiMeeota Statuee Chapter 356.215, Sud. 4(g) the daCe o£ full funding reguized for PSRP and PBPPF ie the year 2020. As part o£ the annual actuarial valuation, PHRA'e actuary detesmi�ee [he aufficiency of Che etatvtory contzibution ratee tovarde meeting ffie requized full funding deadline. 38