2003 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) The interim agreement is in effect until December 31, 2005. At that time, the NFF can terminate their participation in the operations and the City shall reimburse the NFF the full amount of the NFF contri- butions towards operations. The reimbursement will be made in five annual installments beginning December 31, 2005. If the NFF elects to continue their participation, then the City will resume oper- ating the Hall of Fame as it had done from 1996 to 2001. The $1,900,000 contingent liability to the NFF is not recognized on the financial statements. Proiect Future The Common Council approved Resolution 3037 -02 in which the City pledges support to Project Future through the year 2006. Project Future promotes the City for economic development purposes. The City has committed $110,000 for each year from 2003 through 2006 contingent upon the fiscal condition of the City. Lawsuits There are several lawsuits pending in which the City is involved. The City is in settlement phase on two of the lawsuits and City Attorney estimates that the potential damages against the City may exceed $1,300,000 on these two. The other lawsuits are at various stages of court proceedings. D, Conduit Debt Obligation From time to time, the primary government has issued industrial revenue bonds to provide financial assistance to private- sector entities for the acquisition and construction of industrial and commercial 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 primary government, the State, nor any political subdivision 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, 2003, there were eighty -four series of industrial revenue bonds outstanding. The aggregate principal amount payable for seven series issued after July 1, 1995, was estimated at twenty-four million dollars. 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 primary government provides postemploy- ment healthcare benefits, as authorized by IC 5 -10 -8, to retired police officers and firefighters who reach normal retirement while working for the City. Currently, seventy-eight retirees meet these eligibility requirements and are covered by the postemployment program. The retirees must pay the employee and employer assessments to remain. During the year ended December 31, 2003, ex- penditures of $504,804 were recognized for postemployment benefits. 52