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CITY OF LAKE ELMO, MINNESOTA NOTES TO THE BASIC FINANCIAL STATEMENTS DECEMBER 31, 2023 60 NOTE 3 DEFINED BENEFIT PENSION PLANS – STATEWIDE (Continued) Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Police and Fire Fund Pension Costs At December 31, 2023, the City reported a liability of $421,356 for its proportionate share of the Police and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2022 through June 30, 2023, relative to the total employer contributions received from all of PERA’s participating employers. The City’s proportionate share was 0.0244 percent at the end of the measurement period and 0.0256 percent for the beginning of the period. The State of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2023. The contribution consisted of $9 million in direct State aid that does meet the definition of a special funding situation and $9 million in supplemental State aid that does not meet the definition of a special funding situation. The $9 million direct State was paid on October 1, 2022. 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 percent funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90 percent funded, whichever occurs later. The State of Minnesota’s proportionate share of the net pension liability associated with the City totaled $16,984. City’s proportionate share of the net pension liability: $421,356 State of Minnesota’s proportionate share of the net pension liability associated with the City 16,984 Total $438,340 The State of Minnesota is included as a non-employer contributing entity in the Police and Fire Retirement Plan Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $9 million in direct State aid. Police and Fire Plan employers need to recognize their proportionate share of the State of Minnesota’s pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting requirements. For the year ended December 31, 2023, the City recognized pension expense of negative $19,749 for its proportionate share of the Police and Fire Plan’s pension expense. The City recognized negative $1,023 as grant revenue and pension expense for its proportionate share of the State of Minnesota’s pension expense for the contribution of $9 million to the Police and Fire Fund. 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 $9 million in supplemental State aid. The City recognized $2,199 for the year ended December 31, 2023 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf contributions to the Police and Fire Fund. Year ended December 31, Pension Expense 2024 30,096$ 2025 (160,031)$ 2026 2,403$ 2027 (25,716)$