05-11-2022 Council Packet - Laserfiche WebLink

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CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2021 NOTE 6 LONG-TERM LIABILITIES (CONTINUED) D. Revenues Pledged Canabury Square Condos Note – The City has pledged future housing improvement assessment revenue to repay the note payable to Ramsey County issued in 2010. Proceeds from the note provided financing for the 2010 Housing Improvement Area Project – Canabury Square Condos. Housing improvement assessments were projected to produce 100% of the debt service requirements over the life of the note. Total principal and interest remaining on the note is $25,282, payable through 2025. For the current year, principal and interest paid and total housing improvement assessment revenues were $7,679 and $348,566, respectively. The City’s outstanding notes from direct borrowings related to governmental activities contain provisions that in an event default, the County may declare the balance of the principal and interest outstanding under the notes to be immediately due and payable in full. NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE A. Plan Description The City of Little Canada participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined-benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined-benefit pension plans are tax- qualified plans under Section 401(a) of the Internal Revenue Code. 1. General Employees Retirement Fund All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. B. Benefits Provided PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Vested, terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. 1. General Employees Plan Benefits General Employees Plan benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent of average salary for all years of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. 67