2025 Annual Comprehensive Financial Report

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

OTHER POST EMPLOYMENT BENEFITS (CONTINUED)

2018 Changes Assumption changes: The discount rate was changed from 3.81% as of 12/31/2016 to 3.31% as of 12/31/2017 based on updated 20 year municipal bond rates as of each measurement date. 2017 Changes Assumption changes: The discount rate was changed from 3.50% to 3.81% based on updated measurement dates and GASB 75 requirements. Healthcare trend rates were reset to reflect updated cost increase expectations, including an adjustment to reflect the impact of the Affordable Care Act's Excise Tax on high-cost health insurance plans. Medical per capita claims costs were updated to reflect recent experience and new plan offerings. Withdrawal, retirement, mortality and salary increase rates were updated from the rates used in the 7/1/2015 PERA General and Police & Fire Employees Retirement Plan to the rates used in the 7/1/2018 valuation. The percent of future regular retirees assumed to elect coverage at retirement changed from 50% to 30% to reflect recent plan experience. The inflation assumption changed from 2.75% to 2.50% based on an updated historical analysis of inflation rates and forward looking market expectations. B. Summary of Significant Budget Amendments Intergovernmental revenues was increased $80,000 for MnDot Safe Road Zones Grant and $130,000 for the MN DNR shade tree grant program. Additionally charges for services increased $90,000 for the West End AUAR and $267,900 for engineering construction inspection services. The expenditure budget adjustments of $1,702,900 included increases in expenditures related to the revenue adjustments noted above and capital purchases of modular barriers, inspection vehicle, security cameras, irrigation upgrades and fire extinguisher training and training props. C. Summary of Significant Budget Variances Licenses and permits came in over budget on account of an influx of development and conservative budgeting. Intergovernmental revenue came in over budget due to an increase in fire aid, police aid and public safety grants received during the year. Charges for services came in over budget as a result of an increases in development resulting in increased engineering service fees. Additionally conduit debt fees were received in 2025. Investment income came in over budget, as a result of an increase in interest earnings and an unrealized gain from the market value of investments. BUDGETARY COMPARISON SCHEDULES Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. A. Legal Level of Budgetary Compliance

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