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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December3l, 2013
<br />Note 17 JOINT VENTURES (CONTINUED)
<br />Fire (Continued)
<br />Each calendar year, participating cities are to pay the District its share of the total operating and capital budget in
<br />accordance with a funding formula contained in Section VII of the joint powers agreement. The funding formula
<br />takes into account each city's average number of calls, population, and total market value.
<br />During 2013, the City of Lino Lakes' contributions to the District were as follows:
<br />Operating
<br />Capital
<br />Total
<br />$ 511,770
<br />85,250
<br />$ 597,020
<br />The audited financial statements of the District as of December 31, 2012 can be reviewed upon request of the
<br />Centennial Fire District.
<br />In January 2014 the City Council voted to start the process to withdraw from the District which will be effective
<br />January 27, 2016. The City is currently exploring options for fire protection starting in January 2016.
<br />Anoka County
<br />The City of Lino Lakes has a joint powers agreement with Anoka County for the reconstruction of County State Aid
<br />Highway 14 (Main Street) and 1-35E Interchange County Project.
<br />Note 18 OTHER POSTEMPLOYMENT BENEFIT PLAN
<br />At December 31, 2008, the City adopted Govemmental Accounting Standards Board (GASB) Statement No. 45,
<br />Accounting and Financial Reporting by Employers for Postemployment Benefits Other Man Pensions. The City
<br />engaged an actuary to determine the City's liability for postemployment healthcare benefits other than pensions as
<br />of January 1, 2011.
<br />A. PLAN DESCRIPTION
<br />The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active
<br />employees, who retire from the City when over age 50 and with 20 years of service, may continue
<br />coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits
<br />program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium
<br />cost. As of December 31, 2013 there were approximately 49 active participants and 7 retired participants
<br />receiving benefits from the City's health plans.
<br />B. FUNDING POLICY
<br />The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2013, the City contributed
<br />521.289 to the plan.
<br />CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2013
<br />Note 18 OTHER POSTEMPLOYMENT BENEFIT PLAN (CONTINUED)
<br />C. ANNUAL OPEB COST AND NET OPEB OBLIGATION
<br />The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual
<br />required contribution (ARC), an amount actuarially determined in accordance with the parameters of
<br />GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected
<br />to cover normal cost each year and amortize any un -funded actuarial liabilities over a period not to exceed
<br />thirty years. The following table shows the components of the City's annual OPEB cost for the year, the
<br />amount actually paid from the plan, and changes in the City's net OPEB obligation.
<br />Annual Required Contribution
<br />Interest on Net OPEB Obligation
<br />Adjustment to Annual Required Contribution
<br />Annual OPEB Cost (Expense)
<br />Contributions Made
<br />Increase in Net OPEB Obligation
<br />Net OPER Obligation- Beginning of Year
<br />Net OPEB Obligation- End of Year
<br />$ 29,449
<br />1,663
<br />(3,675)
<br />27,437
<br />(21,289)
<br />6,148
<br />77,821
<br />$ 83,969
<br />The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net
<br />OPER obligation for 2013 and the two preceding years:
<br />Percentage
<br />Fiscal Annual of Annual Net
<br />Year OPEB OPEB Cost OPEB
<br />Ended Cost Contributed Obligation
<br />12/31/2011 $ 27,917 65.9% $ 72,808
<br />12/31/2012 29,610 65.2% 77,821
<br />12/31/2013 27,437 77.6% 83,969
<br />D. FUNDED STATUS AND FUNDING PROGRESS
<br />As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued
<br />liability (UAAL) was $474,770. The annual payroll for active employees covered by the plan in the
<br />actuarial valuation was $4,953,560 for a ratio of UAAL to covered payroll of 9.6%.
<br />Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
<br />assumptions about the probability of occurrence of events far into the future. Examples include
<br />assumptions about future employment, mortality, and healthcare cost trends. Amounts determined
<br />regarding the funded status of the plan and the annual required contributions of the employer are subject to
<br />continual revision as actual results are compared with past expectations and new estimates are made about
<br />the future. The schedule of funding progress, presented as required supplementary information following
<br />the notes to the financial statements, presents multiyear trend information about whether the actuarial value
<br />of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
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