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City of Elk River <br />Notes to Basic Financial Statements <br />NOTE 12 — POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED) <br />F. Total OPEB Liability (Continued) <br />Changes in the total OPEB liability are as follows: <br />Balance at December 31, 2020 $ 917,415 <br />Changes for the year <br />Service cost 62,443 <br />Interest 27,703 <br />Differences between expected and actual experience (101,343) <br />Changes of assumptions 13,730 <br />Benefit payments (49,504) <br />Net changes (46,971) <br />Balance at December 31, 2021 $ 870,444 <br />Changes of assumptions and other inputs reflect a change in the discount rate from 2.90% in 2020 to <br />2.00% in 2021. The inflation rate changed from 2.50% to 2.00%. Changes to health care trend rates, <br />mortality tables, retirement and withdrawal rates, and salary increase rates were also made. <br />The General Fund and Municipal Liquor and Sewer Funds typically liquidate the liability related to <br />OPEB. <br />G. OPEB Liability Sensitivity <br />The following presents the City's total OPEB liability calculated using the discount rate of 2.00% as well <br />as the liability measured using 1% lower and 1% higher than the current discount rate. <br />Total OPEB Liability <br />1% decrease Current 1% increase <br />1.00% 2.00% 3.00% <br />$ 929,716 $ 870,444 $ 814,208 <br />The table on the next page presents the total OPEB liability of the City, as well as what the City's total <br />OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower and 1% <br />higher than the current healthcare cost trend rates. <br />97 <br />