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CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2017, was calculated as follows: Annual required contribution (ARC)$71,295 Interest on net OPEB obligation 29,907 Adjustment to ARC (25,944) Annual OPEB cost 75,258 Contributions made during the year (17,517) Increase (decrease) in net OPEB obligation 57,741 Net OPEB obligation - beginning of year 664,590 Net OPEB obligation - end of year $722,331 For the governmental activities, the net OPEB obligation is generally liquidated by the General Fund. The City had an actuarial valuation performed for the plan as of January 1, 2016 to determine the funded status of the plan as of that date as well as the employer’s annual required contribution (ARC) for the fiscal year ended December 31, 2017. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2015, 2016, and 2017 were as follows: Percentage of Fiscal Year Annual OPEB Employer Annual OPEB Cost Net OPEB Ended Cost Contributions Contributed Obligation December 31, 2015 $110,886 $19,485 18%$601,108 December 31, 2016 72,361 8,879 12%664,590 December 31, 2017 75,258 17,517 23%722,331 F. FUNDED STATUS AND FUNDING PROGRESS The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the actuarial value of assets is zero. The funded status of the plan was as follows: Actuarial Unfunded Actuarial UAAL as a Actuarial Actuarial Accrued Accrued Funded Covered Percentage of Valuation Value of Assets Liability (AAL)* Liability (UAAL) Ratio Payroll Covered Payroll Date (a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2016 $ - $644,198 $644,198 0.00% $4,162,000 15.48% *Using the Projected Unit Credit Actuarial cost method. G. ACTUARIAL METHODS AND ASSUMPTIONS Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) of the employer 78