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<br />CITY OF LA PORTE, TEXAS
<br />Notes to the Financial Statements - Continued
<br />September 30, 2004
<br />5. Long Term Liabilities - Continued
<br />Bonds Authorized and Unissued -
<br />At September 30, 2004, the City had $2,900,000 in Certificate of Obligations Bonds which were authorized
<br />and unissued.
<br />Defeased Bonds Outstanding -
<br />In 1994, the City defeased certain general obligation and revenue bonds by placing the proceeds of the new
<br />bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly,
<br />the trust account assets and the liability for the defeased bonds are not included in the City's financial
<br />statements.
<br />In the 1994 refunding of the revenue bonds, the difference between the reacquisition price and the net
<br />carrying amount of the old debt was $189,855 and is being amortized over the life of the new debt, which
<br />was 12 years. The unamortized balance at September 30, 2004 is $15,822.
<br />On September 30, 2000, $2.45 million of general obligation bonds .and $900 thousand of revenue bonds
<br />outstanding are considered defeased. -On October 6, 1999, the La Porte Area Water Authority issued $8.08
<br />million in Contract Revenue Refunding Bonds, Series 1999, with an average interest rate of 5.159 percent to
<br />refund $8.08 million in outstanding Water Supply Contract Revenue Bonds, Series I and II, 1998 with an
<br />average interest rate of 6.94 percent. The Authority completed the current refunding to reduce its total debt
<br />service payments over the next 18 years by $1.476 million and to obtain an economic gain (difference
<br />between the present values of the old and new debt service payments) of $1.048 million. The bonds are
<br />payable from the net revenues of the Authority. The bonds are in $5,000 denominations. The Authority is in
<br />compliance with all significant requirements and restrictions contained in the bond resolution.
<br />S. Pension Benefits
<br />Plan Descriptions
<br />The City provides pension benefits for all of its full-time employees through a non-traditional, joint
<br />contributory, hybrid defined benefit plan (the Plan) in the statewide Texas Municipal Retirement System
<br />(TMRS), one of 794 administered by TMRS, an agent multiple -employer public employee retirement system.
<br />A copy of the 2003 TMRS Comprehensive Annual Financial Report may be obtained by writing to P.O. Box
<br />149153, Austin, Texas 78714. In addition, the city provides pension benefits to its volunteer firemen through
<br />the Texas Statewide, Emergency Services Personnel Retirement Fund, one of 150 administered by the Fire
<br />Fighters' Pension Commissioner, a cost sharing multiple employer pension system. That report may be
<br />obtained by writing to Firefighters Pension Commission, P.O. Box 12577, Austin, Texas 78711. Both Plans
<br />are more fully described below.
<br />Texas Municipal Retirement System
<br />Benefits depend upon the sum of the employee's contributions to the Plan, with interest, and the City
<br />financed monetary credits, with interest. At the date the Plan began, the city granted monetary credits for
<br />service rendered before the Plan began of a theoretical amount equal to two times what would have been
<br />contributed by the employee, with interest, prior to the establishment of the Plan. Monetary credits for
<br />service since the Plan began are a percentage (100%, 150%, or 200%) of the employee's accumulated
<br />contributions. In addition, the City can grant annually another type of monetary credit referred to as an
<br />updated service credit which is a theoretical amount which, when added to the employee's accumulated
<br />contributions and the monetary credits for service since the Plan began, would be the total monetary credits
<br />and employee's contributions accumulated with interest if the employee's contribution rate and City's
<br />matching percentage had always been in existence and if the employee's salary had always been the
<br />average of his salary in the last three years and that are one year before the effective date. At retirement,
<br />the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the
<br />employer -finance monetary credits with interest were used to purchase an annuity.
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