Comprehensive Annual Financial Report 12/31/2001

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 Note 5 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Lino Lake's legal debt margin for 2001 and 2000 is computed as follows: Market value Applicable percentage Debt Limit December 31, 2001 2000 903,685,700 775,398,200 2 % 2 % 18,073,714 15, 507,964 Amount of debt applicable to debt limit: Total bonded debt 20,346,430 24,416,450 - Less: Special assessment bonds (10,195,000) (13,165,000) Public project revenue bonds (6,035,000) (6,285,000) Revenue bonds (3,465,000) (4,340,000) Total debt applicable to debt limit 651,430 626,450 Legal debt margin 17,422,284 14,881,514 Note 6 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION All full -time and certain part-time employees of the City of Lino Lakes are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost - sharing, multiple - employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement 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 PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years and 2.7 percent for each remaining year. For a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year.