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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 1993
<br />Page 12 of 19
<br />Note 5 LEGAL DEBT MARGIN,
<br />The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable
<br />principally from property taxes. The City of Lino Lake's legal debt margin for 1993 and 1992 is computed as
<br />follows:
<br />Market value
<br />Applicable percentage
<br />Debt limit
<br />December 31,
<br />1993 1992
<br />$368,367,100 $320,784,400
<br />2% 2%
<br />7,367,342 6,415,688
<br />Amount of debt applicable to debt limit:
<br />Total bonded debt 10,991,000 12,328,500
<br />Less: Special assessment bonds (8,405,000) (9,715,000)
<br />Public project revenue bonds (1,115,000) (1,115,000)
<br />Cash and investments in
<br />Debt Service Funds (90,270) (73,819)
<br />Revenue bonds (1,060,000) (1,060,000)
<br />Total debt applicable to debt limit 320,730 364,681
<br />Legal debt margin
<br />Note 6 PENSION PLANS
<br />$7,046,612 $6,051,007_
<br />A . PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA)
<br />Plan Description
<br />All full-time and certain part-time employees of the City of Lino Lakes are covered by defined benefit
<br />pension plans administered by the Public Employees Retirement Association of Minnesota (PERA).
<br />PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police
<br />and Fire Fund (PEPFF) which are cost- sharing multiple- employer retirement plans. PERF members
<br />belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social
<br />Security and Basic members are not. All new members must participate in the Coordinated Plan. All
<br />police officers, fire fighters and peace officers who qualify for membership by statute are covered by the
<br />PEPFF. The payroll for employees covered by PERF and PEPFF for the year ended December 31,
<br />1993, was $884,213 and $418,087, respectively; the City's total payroll was $1,390,264.
<br />PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
<br />upon death of eligible members. Benefits are established by State Statute, and vest after three years of
<br />credited service. The defined retirement benefits are based on a member's average salary for any five
<br />successive years of allowable service, age, and years of credit at termination of service. Two methods
<br />are used to compute benefits for Coordinated and Basic members. The retiring member receives the
<br />higher of step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under
<br />Method 1, the annuity accrual rate fora Basic member is 2 percent of average salary for each of the first
<br />10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity
<br />accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each
<br />remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic
<br />members and 1.5 percent for Coordinated members. For PEPFF members, the annuity accrual rate is
<br />2.5 percent for each year of service through June 30, 1993. (Effective July 1, 1993, the annual accrual
<br />rate for PEPFF is 2.65 percent.) For PERF members whose annuity is calculated using Method 1, and
<br />for all PEPFF members, a full annuity is available when age plus years of service equal 90.
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