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NOTE 8 — FUND BALANCE POLICY AND CLASSIFICATION (CONTINUED) <br />When General Fund actual expenditures exceed actual revenues in a given year, the deficit shall be treated <br />as follows: <br />a) "Unassigned" fund balance shall first be adjusted to an amount equal to fifty percent (50%) of <br />the next years adopted operating budget plus prior year encumbrances (if any). <br />b) If shortage after complying with fund balance requirement in step "a" shall draw funds in the <br />following manner: <br />Thirty percent (30%) to Fund #234 - Equipment Revolving Fund <br />Thirty percent (30%) to Fund #810 — Capital Maintenance Fund (reported in General Fund) <br />Ten percent (10%) to Fund #412 — Public Facilities Construction Fund <br />Thirty percent (30%) to Fund #400 - Public Improvement Revolving Fund <br />At December 31, 2025, the City has met its general fund balance policy goal. <br />NOTE 9 — DEFINED BENEFIT PENSION PLANS SUMMARY <br />The city has reported the following balances for defined benefit pension plans as detailed further in these <br />notes: <br />Pension Plans <br />Deferred Deferred <br />Net Pension Outflows Inflows Pension <br />Liabilities of Resources of Resources Expense <br />PERA - GERF $ 2,415,103 $ 997,143 $ 1,516,700 $ 85,075 <br />PERA - PEPFF 2,883,660 4,116,746 5,144,482 762,072 <br />Total - all pensions <br />$ 5,298,763 $ 5,113,889 $ 6,661,182 $ 847,147 <br />NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE <br />A. Plan Descriptions <br />The City participates in the following cost -sharing multiple -employer defined benefit pension plans <br />administered by the Public Employees Retirement Association (PERA) of Minnesota. These plan <br />provisions are established and administered according to Minnesota Statutes chapters 353, 353D, <br />3535E, 353G, and 356. Minnesota Statutes chapter 356 defines each plan's financial reporting <br />requirements. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the <br />Internal Revenue Code (IRC). <br />1. General Employees Retirement Fund (GERF) <br />Membership in the GERF includes employees of counties, cities, townships, schools in non -certified <br />positions, and other governmental entities whose revenues are derived from taxation, fees, or <br />assessments. Plan membership is required for any employee who is expected to earn more than $425 <br />in a month, unless the employee meets exclusion criteria. <br />81 <br />