2005 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Lawsuits Several lawsuits are pending in which the City is involved. The City is in various court proceedings phases or settlement phase on lawsuits; the City Attorney estimates that the potential damages against the City may exceed $2,300,000. 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, 2005, there were several series of industrial revenue bonds outstanding. The aggregate principal amount payable is not available to the City. During 2005, the City approved three series of industrial revenue bonds in the total amount of $17,200,000. E. Postemployment Benefits In addition to the pension benefits described below, the primary government provides postemploy- ment healthcare benefits, as authorized by Indiana Code 5 -10 -8, to retired police officers and fire- fighters who reach normal retirement while working forthe City. Currently, 91 retirees meetthese eli- gibility requirements and are covered by the postemployment program. The retirees must pay the em- ployee and employer assessments. During the year ended December 31, 2005, expenditures of $825,468 were recognized for postemployment benefits. F. Pension Plans 1. A gent Multiple-Employer and Single-Employer Defined Benefit Pension Plans a. Public Employees' Retirement Fund Plan_ Description The primary government contributes to the Indiana Public Employees' Retirement Fund (PERF), a defined benefit pension plan. PERF is an agent multiple - employer public em- ployee retirement system, which provides retirement benefits to plan members and bene- ficiaries. 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 retire- ment benefit consists of the pension provided by employer contributions plus an annuity pro- vided by the member's annuity savings account. The annuity savings account consists of member's contributions, set by state statute at 3% 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