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IV-37CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Since the plan is ftmded on a pay-as-you-go basis, both the discount rate and the investment rate of return was based on the 20 year AA rated municipal bond rate as ofNovember 22, 2017, obtained from www.finsbonds.com/market-yields. Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2014 and Improvement Scale BB. Based on past experience of the plan, 90% of future retirees are assumed to continue medical coverage until age 65. 50"A, of police/fire employees are assumed to retire at age 55, the balance at age 65. 50% of other City employees are assumed to retire at age 62, the balance at age 65. F. SENSITIVITY OF THE TOTAL OPED LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is I% lower (1.85%) or I% higher (3.85%) than the current discount rate: Total OPEB liability !%Decrease {1.85%) $841,593 Discount Rate {2.85%) $756,644 !%Increase (3.85%) $681,860 G. SENSITIVITY OF THE TOTAL OPED LIABILITY TO CHANGES IN THE HEALTHCARE COST TREND RATES The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are I% lower (7% decreasing to 2%) or 1% higher (9"A, decreasing to 4%) than the current healthcare cost trend rates: Total OPEB liability 1% Decrease (7% decreasing to 2%) $671,431 Healthcare Cost Trend Rates (8% decreasing to 3%) $756,644 !%Increase (9% decreasing to 4%) $855,544 H. OPED EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPED For the year ended December 31, 2018, the City recognized $33,979 ofOPEB expense. At December 31, 2018, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Deferred Outflows of Resources $0 Deferred Inflows of Resources $47,160 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended December 31, 2019 2020 2021 2022 2023 Thereafter OPEB Ex.e.ense ($3,923) (3,923) (3,923) (3,923) (3,923) (27,545) ($47,160) Note 10 STEWARDSHIP. COMPLIANCE AND ACCOUNTABILITY A. DEFICIT FUND BALANCES The City has deficit ftmd balances at December 31, 2018 as follows: Major Funds: G.O. Improvement Bonds of2016B Nonmajor Funds: Tax Increment Financing 1-11 2040 Comp Plan Update Fund Balance Deficit ($2,150,105) (782,682) {2,672) The City intends to fund these deficits through future tax levies, special assessment collections, tax increments, transfers from other funds, and various other sources.