06-05-2017 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 D. FUNDING POLICY The additional cost of using a blended rate for actives and retirees is currently funded on a pay-as-you- go basis. The City Council may change the funding policy at any time. E. ANNUAL OPEB COSTS AND NET OPEB OBLIGATION The City’s annual OPEB cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2016, was calculated as follows: Annual required contribution (ARC)$31,590 Interest on net OPEB obligation 974 Adjustment to Annual Required Contribution (3,756) Annual OPEB cost (expense)28,808 Contributions made 22,513 Increase in net OPEB obligation 6,295 Net OPEB obligation - beginning of year 90,852 Net OPEB obligation - end of year $97,147 The net OPEB obligation is generally liquidated by the General Fund. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the previous three years was as follows: Percentage of Fiscal Year Annual OPEB Employer Annual OPEB Cost Net OPEB Ended Cost Contributions Contributed Obligation December 31, 2014 $26,468 $36,109 136.4% $91,023 December 31, 2015 28,814 28,984 100.6% 90,852 December 31, 2016 28,808 22,513 78.1% 97,147 F. FUNDED STATUS AND FUNDING PROGRESS As of January 1, 2014, the most recent actuarial valuation date, the City’s unfunded actuarial accrued liability (UAAL) was $547,626. The annual payroll for active employees covered by the plan in the actuarial valuation was $5,265,020 for a ratio of UAAL to covered payroll ratio of 10.4%. 76