Comprehensive Annual Financial Report 12/31/1998

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1998 Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE (CONTINUED) PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 514 St. Peter Street #200, St. Paul, Minnesota, 55102 or by calling (612)296 -7460 or 1- 800 -652- 9026. B. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.75% and 4.75 %, respectively, of their annual covered salary. PEPFF members are required to contribute 7.60% of their annual covered salary. The City of Lino Lakes is required to contribute the following percentages of annual covered payroll: 11.43% for Basic Plan PERF members, 5.18% for Coordinated Plan PERF members, and 11.40% for PEPFF members. The City's contributions for the years ending June 30, 1998, 1997, and 1996 were $183,662, $149,261, and $124,930, respectively, equal to the contractually required contributions for each year as set by state statute. Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. The MWCC merged with the Metropolitan Council during 1994 to form Metropolitan Council Wastewater Services (MCWS) and is now called the Metropolitan Council Environmental Services (MCES). The MCES bills the City annually based upon estimated volume and budgeted costs. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed. Note 8 RECONCILIATION OF CONTRIBUTED CAPITAL Changes to contributed capital during the year are as follows: Water Sewer Total Beginning Balance 5,935,664 8,564,111 14,499,775 Capital Contributions 1,488,624 2,524,472 4,013,096 Depreciation on Contributed Assets (126,168) (196,639) (322,807) Ending Balance 7,298,120 10,891,944 18,190,064 The capital contribution amounts shown above for the Sewer Fund includes $655,283 of assets contributed from the Water Fund. The Water Fund shows this transaction as a residual equity transfer out. 48