2022 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022

NOTE 14 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) D. Changes in the Total OPEB Liability

Total OPEB Liability (a)

Balances at December 31, 2021 Changes for the Year:

$

3,178,694

Service cost

67,656 (755,344) (471,095) (88,083) (998,739) 248,127

Interest Differences between expected and actual experience

Changes in assumptions or other inputs Benefit payments Net Changes

Balances at December 31, 2022

$

2,179,955

Since the prior measurement date, the following benefit terms changed: The discount rate was changed from 2.00% as of 12/31/2020 to 1.84% as of 12/31/2021 based on

updated 20-year municipal bond rates as of each measurement date. Since the prior measurement date, the following benefit terms changed:

The discount rate was changed from 3.71% to 1.84% based on updated measurement dates and GASB 75 requirements.

E. Sensitivity of the Total OPEB Liability

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (0.84 percent) or 1 percentage-point higher (2.84 percent) than the current discount rate:

1% Decrease (0.84%)

Current (1.84%)

1% Increase (2.84%)

$

2,048,483

$

2,179,955

$

1,979,840

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a Healthcare Cost Trend Rates that is 1-percentage point lower (5.20 percent decreasing to 2.70 percent) or 1-percentage-point higher (7.20 percent decreasing to 4.70 percent) than the current discount rate:

Healthcare Cost Trend Rates (6.2% Decreasing to 3.7%) 2,179,955 $

1% Decrease (5.2% Decreasing to 2.7%)

1% Increase (7.2% Decreasing to 4.7%)

$

1,913,562

$

2,502,011

91