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in Fund Balance – Budget and Actual
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021
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The following presents the total OPEB liability of the City, calculated using the discount rate of 2 .12 percent, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (1 .12 percent) or 1 percentage point higher (3 .12 percent) than the current rate:
Total OPEB liability
1% Decrease Current Discount Rate 1% Increase 1 .06% 2 .06% 3 .06% $ 2,745,028 $ 2,550,360 $ 2,364,167
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the total OPEB liability of the City, calculated using healthcare cost trend rates that are 1 percentage point lower or one percentage point higher than the current healthcare cost trend rate:
Current Healthcare Cost 1% Decrease Trend Rates Assumption 1% Increase Total OPEB liability $ 2,204,410 $ 2,550,360 $ 2,973,896
F. Related Party Notes
In February 2010, the City and AURA entered into a promissory note in which the City loaned AURA $2,745,000 at a simple interest rate of 3 .5% for 2 years . Interest payments are due monthly . The loan was due and payable in full on April 1, 2016 . The loan was collateralized with a building and two parcels of land . During 2015, the property was sold and the note amended . Under the amended note, AURA made a lump sum payment to the City in the amount of $500,000 at the time of sale and the remaining balance of $2,245,000 is being paid in monthly installments beginning January 2016 and continuing through November 2023 at a simple interest rate of 1 .5% . The balance as of December 31, 2021 is $1,406,060 . Though the note is not unsecured, the City shall be authorized to withhold payment to AURA derived from the incremental sales tax in the event of default .
In June, 2016, the City entered into a loan agreement with AURA in which the City’s Wastewater Fund loaned AURA $5,000,000 at a simple interest rate of 3% through June 2028 . Interest payments are due monthly beginning in June 2017 through 2018 . Principal and interest is being paid monthly thereafter until maturity . The balance as of December 31, 2021 is $3,821,677 . The loan is unsecured, though the City shall be authorized to withhold payment to AURA derived from incremental sales tax or public improvement fees in the event of default .
