06-02-25 - Council Work Session Agenda

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2024 The State of Minnesota contributed $37.4 million to the Police and Fire Fund during the plan fiscal year ended June 30, 2024. The contribution consisted of $9 million in direct state aid that meets the definition of a special funding situation, additional one-time direct state aid contribution of $19.4 million, and $9 million in supplemental state aid that does not meet the definition of a special funding situation. Additionally, $9 million supplemental state aid was paid on October 1, 2024. Thereafter, by October 1 of each year, the state will pay $9 million to the Police and Fire Fund until full funding is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will continue until the fund is 90% funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90% funded, whichever occurs later. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $113,147. City's proportionate share of the net pension liability $2,968,216 State of Minnesota's proportionate share of the net pension liability associated with the City 113,147 Total $3,081,363 For the year ended December 31, 2024, the City recognized pension expense of $497,222 for its proportionate share of the Police and Fire Plan's pension expense. The City recognized an additional $10,987 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $9 million to the Police and Fire Fund special funding situation. The State of Minnesota is not included as a non -employer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $28.4 million in supplemental state aid, because this contribution was not considered to meet the definition of a special funding situation. The City recognized $64,075 for the year ended December 31, 2024 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the Police and Fire Fund. At December 31, 2024, the City reported Police and Fire Fund deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion Employer contributions subsequent to the measurement date Total Deferred Outflows Deferred Inflows of Resources of Resources $1,153,122 $ - 3,229,476 4,370,147 - 946,573 100,353 230,876 265,985 - $4,748,936 $5,547,596 69