03-22-21 Regular Meeting of the La Porte City Council

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CITY OF LA PORTE, TEXAS Exhibit A-10 NOTES TO FINANCIAL STATEMENTS (continued) Note 1 Î Summary of Significant Accounting Policies (continued) S. Deferred Outflows/Inflows of Resources (continued) Deferred inflows of resources for OPEB Î Reported in the government wide financial statement of net position, this deferred inflow results primarily from 1) changes in actuarial assumptions; and 2) differences between expected and actual actuarial experiences. These OPEB related deferred inflows will be amortized over the expected remaining service lives of all employees (active and inactive employees) that are provided with OPEB through the OPEB plan. T. Pensions For purposes of measuring the net pension liability for the Texas Municipal Retirement System (TMRS), pension related deferred outflows and inflows of resources, and pension expense, City specific information about its Fiduciary Net Position in the TMRS and additions to/deductions from the CityÓs Fiduciary Net Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For purposes of measuring the net pension liability for the Texas Emergency Services Retirement System (TESRS), pension related deferred outflows and inflows of resources, and pension expense, City specific information about its Fiduciary Net Position in the TESRS and additions to/deductions from the CityÓs Fiduciary Net Position have been determined on the same basis as they are reported by TESRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. U. Post-employment Healthcare Benefits The City participates in a defined benefit group-term life insurance plan, both for current and retired employees, administered by the Texas Municipal Retirement System (TMRS). The City reports the total liability for this plan on the government-wide and proprietary fund financial statements. The City administers other post-employment benefits (ÐOPEBÑ) through a defined benefit medical plan to provide coverage for eligible retirees and their dependents. Information regarding the CityÓs total OPEB liability is obtained from TMRS through a report prepared for the City by TMRSÓ consulting actuary, Gabriel Roeder Smith & Company, in compliance with GASB Statement No. 75. V. Use of Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenditures, and expenses during the reporting period. Actual results could differ from those estimates. Draft 3-12-21 45 Fiscal Year 2020 Annual Report