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NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) The state of Minnesota is included as a nonemployer 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 $9.0 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 $840,366 for its proportionate share of the Police and Fire Plan's pension expense. The City recognized $6,730 as a reduction of grant revenue and pension expense for its proportionate share of the state of Minnesota's pension expense for the contribution of $9.0 million to the PEPFF. The state of Minnesota is not included as a nonemployer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9.0 million in supplemental state aid. The City recognized $14,454 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 PEPFF. At December 31, 2023, the City reported its proportionate share of the PEPFF'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 $ 803,940 $ — 3,620,906 3,900,488 — 22,321 113,002 882,401 184,784 — $ 4,722,632 $ 4,805,210 A total of $184,784 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31, Amount 2024 $ 133,374 2025 $ 9,518 2026 $ 709,547 2027 $ (257,652) 2028 $ (862,149) NS2