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NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) D. Pension Costs 1. GERF Pension Costs At December 31, 2023, the City reported a liability of $1,867,690 for its proportionate share of the GERF's net pension liability. The City's net pension liability reflected a reduction, due to the state of Minnesota's contribution of $16.0 million. The state of Minnesota is considered a nonemployer contributing entity and the state's contribution meets the definition of a special funding situation. The state of Minnesota's proportionate share of the net pension liability associated with the City totaled $51,455. 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 the 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 the PERA's participating employers. The City's proportionate share was 0.0334 percent at the end of the measurement period and 0.0348 percent for the beginning of the period. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City's proportionate share of the net pension liability $ 1,867,690 State's proportionate share of the net pension liability associated with the City 51,455 Total $ 1,919,145 For the year ended December 31, 2023, the City recognized pension expense of $333,809 for its proportionate share of the GERF's pension expense. In addition, the City recognized an additional $231 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota's contribution of $16.0 million to the GERF. At December 31, 2023, the City reported its proportionate share of the GERF's 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 collective difference between projected and actual investment earnings Changes in proportion Contributions paid to the PERA subsequent to the measurement date Total Deferred Deferred Outflows Inflows of Resources of Resources 61,953 $ 11,826 279,385 511,918 6,742 — 129,512 83,160 104,588 — $ 582,180 $ 606,904 -53-