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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2010 <br />Note 4: OTHER INFORMATION -CONTINUED <br />c. Annual OPEB Cost and Net OPEB Obligation <br />The City's annual OPEB cost for each plan is calculated based on the annual required contribution (ARC) of the <br />employer, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The <br />ARC represents the level of funding that, if paid on an ongoing basis, is projected to cover normal cost each <br />year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. <br />The unfunded actuarial liabilities included in the ARC were amortized over one year for the MRHP and is <br />amortized over thirty years for the URHP. The URHP has elected to calculate the ARC and related information <br />using the alternative measurement method permitted for employers in plans with fewer than one hundred total <br />plan members. <br />The following table shows the components of the City's annual OPEB cost for the year, the amount actually <br />contributed to the plan, and changes in the City's net OPEB obligation: <br />Municipal Utility <br />Retiree Retiree <br />Health Plan Health Plan <br />Annual required contribution (ARC) $ 99,402 $ 10,2]3 <br />Interest on net OPEB obligation 4,028 810 <br />Adjustment to ARC (100,696) (1, ] 70) <br />Annual OPEB cost 2,734 9,853 <br />Contributions made (2,851) - <br />Increase in net OPEB obligation (117) 9,853 <br />Net OPEB obligation -beginning of year 100,696 20,243 <br />Net OPEB obligation -end of year $ 100,579 $ 30,096 <br />The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB <br />obligation for 2010, 2009, and 2008 are as follows: <br />Percentage of <br />Annual Employer Annual OPEB Net Pension <br />Fiscal Year Ended OPEB Cost Contribution Cost Contributed Obligation <br />MRHP: <br />12/31/2008 $ 99,402 $ 2,030 2% $ 97,372 <br />12/31/2009 5,925 2,601 44% 100,696 <br />12/31/2010 2,734 2,851 104% 100,579 <br />URHP: <br />12/31/2008 $ 10,213 $ - - % $ 10,213 <br />12/31/2009 10,030 - - % 20,243 <br />12/31/2010 9,853 - - % 30,096 <br />61 <br />