2002 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Lawsuits There are several lawsuits pending in which the City is involved. The City Attorney estimates that the potential claims against the City exceed $2,000,000. These lawsuits are at various stages of court proceedings. D. Conduit Dek-t Obligation From time to time, the government has issued industrial revenue bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and com- mercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the government, the State, nor any political subdi- vision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2002, there were eighty-four series of industrial revenue bonds outstanding. The aggregate principal amount payable for seven series issued after July 1, 1995, was $24,491,555. The aggregate principal amount payable for the seventy-seven series issued prior to July 1, 1995, could not be determined; however, their original issue amounts totaled $164,989,215. E, Postemployment Benefits In addition to the pension benefits described below, the government provides postemployment healthcare benefits, as authorized by IC 5-10-8, to retired police officers and firefighters who reach normal retirement age while working for the City. Currently, 97 retirees meet these eligibil- ity requirements. The retirees must pay the employee and employer assessments to remain eli- gible.. During the year ended December 31, 2002, expenditures of $245,483 were recognized for postemployrnent benefits. F. Pension Plans 1 Agent Multiple-Emplover and Single-Emplover Defined Benefit Pension Plans a. Public Employees' Retirement Fund Plan Description The government contributes to the Indiana Public Employees' Retirement Fund (PERF), a defined benefit pension plan. PERF is an agent multiple-employer public employee retirement system, which provides retirement benefits to plan members and beneficiaries. All full-time employees are eligible to participate in the defined benefit plan. State statutes (IC 5-10.2 and 5-10.3) govern, through the PERF Board, most requirements of the system and give the primary government authority to contribute to the plan. The PERF retirement benefit consists of the pension provided by employer contributions plus an annuity provided by the member's annuity savings account. The annuity savings account consists of member's contributions, set by state statute at three percent of compensation, plus the interest credited to the member's account. The employer may elect to make the contributions on behalf of the member. 54