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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2006 <br />Note 4: OTHER INFORMATION - CONTINUED <br /> Remaining amortization period: <br /> Normal cost 20 years <br /> Prior service cost 5 years <br /> Asset valuation method Market <br /> Actuarial assumptions: <br /> Investment rate of return 5% <br /> Projected salary increases N/A <br /> Inflation rate N/A <br /> Cost of living adjustment None <br />Three-Year Trend Information <br /> Annual Percentage Net <br /> Year Pension of APC Pension <br /> Ending Cost (APC) Contributed Obligation <br /> 12/31/04 $147,589 117% $0 <br /> 12/31/05 136,429 121% 0 <br /> 12/31/06 148,455 120% 0 <br /> <br />Required Supplementary Information – Schedule of Funding Progress <br /> Assets in <br /> Excess of Pension <br /> Actuarial Actuarial Actuarial (Unfunded) Benefit <br /> Valuation Value of Accrued Percentage Accrued Per Year <br /> Date Assets Liabilities Funded Liability of Service <br /> 12/31/04 $ 1,646,533 $1,664,129 98.9% $ (17,596) $ 4,000 <br /> 12/31/05 1,886,585 1,781,082 105.9 105,503 4,000 <br /> 12/31/06 2,092,351 1,823,195 114.8 269,156 4,175 <br />E. Segment Information <br />The City maintains five enterprise funds that account for the municipal liquor operations, garbage collections, and sewer, <br />water and electric utilities. The City considers each of its enterprise funds to be a segment. Since the required segment <br />information is already included in the City’s proprietary funds’ balance sheet and statement of revenues, expenses, and <br />changes in net assets balance, this information has not been repeated in the notes to the basic financial statements. <br />F. Conduit Debt Obligations <br /> From time to time, the City has issued industrial revenue bonds to provide financial assistance to private-sector entities <br />for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds <br />are secured by the property financed and are payable solely from payment received from the benefited entity. Neither <br />the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. <br />Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. <br />As of December 31, 2006, there were five series of industrial revenue bonds outstanding, with an estimated aggregate <br />principal payable amount of $20,400,000. <br />56 <br /> <br />