6.4 SR 06-16-2025 - Laserfiche WebLink

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80 City of Elk River Notes to Basic Financial Statements NOTE 11 – RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. NOTE 12 – PENSION PLANS The City participates in various pension plans. Total pension expense for the year ended December 31 , 2024, was $1,369,978. The components of pension expense are noted in the following plan summaries. The General Fund and Municipal Liquor , Sewer, Electric, and Water Funds typically liquidate the liability related to the pensions. Public Employees' Retirement Association A.Plan Description The City participates in the following cost -sharing multiple-employer defined benefit pension plans administered by PERA. PERA's defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353, 353D, 353E, 353G, and 356. Minnesota Statutes Chapter 356 defines each plan's financial reporting requirements. PERA 's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan Membership in the General Plan includes employees of counties, cities, townships, schools in non - certified positions, and other governmental entities whose revenues are derived from taxation, fees, or assessments. Plan membership is required for any employee who is expected to earn more than $425 in a month, unless the employee meets exclusion criteria. Public Employees Police and Fire Plan Membership in the Police and Fire Plan includes full -time, licensed police officers and firefighters who meet the membership criteria defined in Minnesota Statutes § 353.64 and who are not earning service credit in any other PERA retirement plan or a local relief association for the same service. Employers can provide Police and Fire Plan coverage for part -time positions and certain other public safety positions by submitting a resolution adopted by the City of Elk River's governing body. The resolution must state that the position meets plan requirements. Page 270 of 637