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CITY OF ROSEVILLE, MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31, 2016 <br /> <br /> <br /> <br /> <br /> Projections of benefits for financial reporting purposes are based on the substantive plan (the plan <br /> as understood by the employer and plan members) and include the types of benefits provided at <br /> the time of each valuation and the historical pattern of sharing of benefit costs between the <br /> employer and plan members to that point. The actuarial methods and assumptions used include <br /> techniques that are designed to reduce the effect of short-term volatility in actuarial accrued <br /> liabilities and the actuarial value of assets, consistent with the long-term perspective of the <br /> calculations. <br /> <br /> In the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was <br /> used. The actuarial assumptions included a 4.5% investment rate of return (net of investment <br /> expenses), salary increases of 3.0% (only used to bring salaries into the valuation year) and an <br /> initial annual health care cost trend rate of 7.5% reduced by .25% each year to arrive at an <br /> ultimate health care cost trend rate of 5.0% over 10 years. The health care cost trend rate includes <br /> a 2.5% inflation rate. The actuarial value of assets was $0. The plan’s unfunded actuarial <br /> accrued liability is being amortized using the level percentage of projected payroll method over <br /> 30 years on a closed basis. The remaining amortization period at December 31, 2015, is 22 <br /> years. <br /> <br />Note 6 PRIOR PERIOD ADJUSTMENT AND CHANGE IN ACCOUNTING PRINCIPLE <br /> <br />Prior Period Adjustment <br /> <br />The government-wide and proprietary-fund financial statements were adjusted for an error in <br />earned revenue for $154,650, which was determined to be unearned as of December 31, 2016. <br />The unearned grant funds were returned to the granting agency in 2016. <br /> <br />The government-wide and proprietary fund statements were adjuste d f o r t h e e r r o r s i n d i c a t e d <br />above. <br /> <br />A summary of the corrections to net position are as follows: <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Government-Wide Proprietary Funds <br />Business-Type Storm <br />Activities Drainage <br />Net position, January 1 30,859,340$ 9,112,697$ <br />Net position increase (decrease): <br /> Overstated revenue correction (154,650) (154,650) <br />Net position, January 1, as restated 30,704,690$ 8,958,047$ <br /> <br />77 <br />Item 8: Attachment D