5.1. ERMUSR 04-13-2010 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 Nate 4: ~THE~ II~F~RI~ATI~N - C~NTINUEI~ ~. Commitments The Utilities has received notice from. theiz• power supplier regarding the existing all requirements power contract exercising their right to give ten years notice to cancel the contract. The cancellation date would be effective September 3 0, 2018. The process has begun to renegotiate the existing contract, or contract with another power supplier. Note 5: P~~TEIV~PL®'YIVIENT BENE~`ZTS ~THEI~ THAN PENS~~N In 2008, the Utility prospectively implemented the requirements of a new accounting pronouncement, GASB Statement No. 45, Accounting and Financial Reporting ~y Employers for Pasternploymer~t Benefits ~thcr than Pensions. Plan Description. Elk River Municipal Utilities (the Utilities} administers amulti-employer defrned benefit healthcare plan ~"the Retiree Health Plan"}. The plan provides lifetime healthcare insurance for eligible xeti~•ees and their spouses through the Utilities group health insurance plan, which covers both active and retired members. Benelzt provisions are reviewed intermittently through the relationship with the Utilities' insurance broker. The Retiree Health Plan does not issue a publicly available financial report. .Funding Policy, Contribution requirements also are reviewed at the time changes are made to the plan, The Utility contributes none of the cost afcurrent-year premiums for eligible retired plan members and their spouses. For Fiscal year 2009, the Utility cant~~ibuted $0 to the plan, Plan members receiving benefits cont~•ibute 100 percent of their premium costs. In fiscal year 2009, total member contributions were $0. ~4nnual ~PEB Cosh and .I~et ~PEB obligation. The Utilities' a~rnual other postemployment benefit ~OPEB) cost expense) is calculated based on the annual required contribution of the employer (ARC), The Utility has elected to calculate the ARC and related information using the alternative measurement method permitted by GASB Statement 45 for employers in plans with fewer than one hundred total plan members, The ARC represents a level of funding that, if paid on an ongoing basis, is prof ected to cover normal cost each year and to amol•tize any unfiurded actuarial liabilities for funding excess) over a period not to exceed thirty years. The following table shows the components of the Utilities annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Utilities' net OPEB obligation to the Retiree Health Plan; Annual required contribution $ 10,213 Interest on net OPEB obligation 409 Adjustment to annual required contribution 592 Annual OPEB Cost expense} 10,030 Contributions made - Increase in net 4PEB obligation 10,030 Net 4PEB obligation- beginning of year 10,213 Net OPEB obligation- end of year $ 20,243 ~45-