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Other Post -Employment Benefit Programs of the City of ""
<br />Actuarial Valuation as of Juiv 1, 2015
<br />A. Executive Summary
<br />This report presents the results of the July 1, 2015 actuarial valuation of the City of ° " (the
<br />City) other post -employment benefit (OPEB) programs. Briefly, benefits include subsidized
<br />medical and life insurance coverage for eligible retirees. The purposes of this valuation are
<br />to assess the OPEB liabilities and provide disclosure Information as required by Statement
<br />No. 45 of the Governmental Accounting Standards Board (GASB 45) and to provide
<br />information to be reported to the California Employers' Retiree Benefit Trust (CERBT), Note
<br />that providing medical and life insurance coverage to retirees at the same premium rates as
<br />are charged for active employees is considered a benefit subsidy;under GASB 45.
<br />How much the City contributes each year affects the calci j1tion of [!abilities. The City is
<br />prefunding its OPEB obligations by consistently making coritritautions greater than or equal
<br />to the Annual Required Contribution (ARC) each year. Trust assets are Currently invested in
<br />the CERBT with Asset Allocation Strategy 1. Whlle,the 2013 valuation"used a discount rate
<br />of 7.5%, this valuation was prepared using a 7.28%i ispount rate. This lower rate;. reflects a
<br />change in the projected long term rate of return on trust assets, Please note that'use of this
<br />rate is an assumption and Is not a guarantee of;future investment performaricb'.
<br />Exhibits presented in this report are based on the assumptlon'that the results of this July 1,
<br />2015 valuation will be applied in determining thp,annu4OPEB expense for the fiscal years
<br />ending June 30, 2016 and 2017. Appendix 1 -provides an updated development of the
<br />results for the fiscal year ending June 30 2015, based on the July 1, 2013 valuation and on
<br />reported OPEB contributions between July `1:;'2014 arrd June 30, 2015.
<br />The Actuarial Accrued Liabilityand Assets`as of July 1, 2015 are shown below:
<br />Subsidy
<br />Explicit Implicit
<br />Total
<br />Discount Rate
<br />7.28% 7.28%
<br />7.28%
<br />Actuarial Accrued Liability
<br />Actuarial Value of Assets
<br />Unfunded Actuarial Accrued Liability
<br />$ 107,587,812 $ 19,169,132
<br />26,019,812 -
<br />81,568,000 19,169,132
<br />$ 126,756,944
<br />26,019,812
<br />100,737,132
<br />Funded Ratio
<br />24.20/ 0.0%
<br />20.5%
<br />Assuming the City continues to fellow its previously established policy of prefunding its
<br />OPEB liabilities, the following summarizes results for the fiscal year ending June 30, 2016:
<br />Subsidy
<br />Explicit
<br />implicit
<br />Total
<br />Annual Required Contribution ARC for FYE 2016
<br />$ 6,877,504 $
<br />1,787,877 $
<br />8,665,381
<br />Expected employer paid benefits for retirees
<br />5,213,932
<br />5,213,932
<br />Current year's implicit subsidy credit
<br />-
<br />911,979
<br />911,979
<br />Expected contribution to OPEB trust
<br />1,663,572
<br />875,898
<br />2,539,470
<br />Expected net OPEB obligation at June 30, 2016
<br />945
<br />945
<br />These results are shown in tables beginning on page 13. Projected results for the fiscal year
<br />ending June 30, 2017 begin on page 15. Additional information to facilitate OPER reporting
<br />in the City's financial statements is provided in Appendix 2.
<br />B ckmore (`f'a
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