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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2019 <br /> <br /> <br /> <br /> <br />Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of <br />return was based on the 20 year AA rated municipal bond rate as of January 14, 2020, obtained from <br />www.fmsbonds.com/market-yields. <br /> <br />Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2019. <br />Based on past experience of the plan, 90% of future retirees are assumed to continue medical coverage <br />until age 65. 25% of future police/fire retirees are assumed to select spousal coverage. No spousal <br />coverage is assumed for other future retirees. 50% of police/fire employees are assumed to retire at age <br />55, the balance at age 65. 50% of other City employees are assumed to retire at age 62, the balance at <br />age 65. <br /> <br /> <br />F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT <br />RATE <br /> <br />The following presents the total OPEB liability of the City, as well as what the City’s total OPEB <br />liability would be if it were calculated using a discount rate that is 1% lower (1%) or 1% higher (3%) <br />than the current discount rate: <br /> <br />1% Decrease Discount Rate 1% Increase <br />1%2%3% <br />Total OPEB liability $595,065 $560,631 $526,577 <br /> <br /> <br />G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEALTHCARE <br />COST TREND RATES <br /> <br />The following presents the total OPEB liability of the City, as well as what the City’s total OPEB <br />liability would be if it were calculated using healthcare cost trend rates that are 1% lower (6% <br />decreasing to 2%) or 1% higher (8% decreasing to 4%) than the current healthcare cost trend rates: <br /> <br />Healthcare Cost <br />1% Decrease Trend Rates 1% Increase <br />(6% decreasing to 2%) (7% decreasing to 3%) (8% decreasing to 4%) <br />Total OPEB liability $499,408 $560,631 $633,959 <br /> <br /> <br />H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES <br />RELATED TO OPEB <br /> <br />For the year ended December 31, 2019, the City recognized $39,649 of OPEB expense. At December <br />31, 2019, the City reported deferred outflows and inflows of resources related to OPEB from the <br />following sources: <br /> <br />Deferred Outflows Deferred Inflows <br />of Resources of Resources <br />Differences between expected <br /> and actual experience $11,786 $279,081 <br /> <br />76