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<br />ELK RIVER FIRE DEPARTMENT RELIEF ASSOCIATION <br />ELK RIVER., MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2005 AND 2004 <br /> <br />Note 5: CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE <br /> <br />The Association's funding policy provided for contnbutions from the State and the City in amounts sufficient to <br />accumulate sufficient assets to pay benefits when due. The annual contnbution is the sum of the normal cost, the State <br />contribution payment and the provision for administrative expenses. <br /> <br />The Association is comprised of volunteers; therefore, there are no payroll expenditures or covered payroll percentage <br />calculations. <br /> <br />Required contributions of $136,429 were made in 2005 and $148,589 including $1,000 of supplemental <br />reimbursement in 2004 were made by the State in accordance with Minnesota statute.. Contributions of $28, 1 00 and <br />$24,800 were made by the City for the years ended December 31,2005 and 2004, respectively. <br /> <br />Note 6: RISK MANAGEMENT <br /> <br />The Association is exposed to various risks of loss related to theft of assets for which the Association carried <br />commercial insurance policies. There were no significant reductions in insurance from the previous year or settlements <br />in excess of insurance coverage for any part of the past three fiscal years. The Association invests in mutual funds that <br />are subject to market value fluctuations. <br /> <br />Note 7: <br /> <br />SUBSEQUENT EVENT <br /> <br />The Association approved an increase in pension benefit level from $4,000 to $4,175 effective January 1, 2006. <br /> <br />-8- <br />