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Application of this valuation report and implications of GASB 75 It Is our understanding that the City will be required to implement GASB Statement 75 for its fiscal year ending June 30, 2018. Four key changes under GASB 75, among others, are: (1) GASB 75 introduces the concept of a "Measurement Date" for each fiscal year; this date may or may not be the same as the valuation date. In addition, the Measurement Date should be a date consistently applied from year to year, not later than the last day of the current fiscal year and not earlier than the last day of the prior fiscal year. Note: it is often easier to choose the 12 month prior date because this allows the actuary to develop the calculations in plenty of time prior to fiscal year end. As you know, CalPERS takes this approach for GASB 68. If using the last day of the period, there are more agencies needing to get the work completed by in a narrower window of time. (2) The Net OPEB Liability (a.k,a. unfunded OPEB liability) will be reported in the statement of net position, rather than in a footnote. (3) The period for recognizing certain deferrals (amortization items) will be considerably shorter than the maximum 30 year period permitted under GASB 45. (4) The discount rate used to value the OPEB liability under GASB 75 is determined differently than under GASB 45; this rate and the resulting plan liability must be reviewed and potentially updated every year, not every other year. However, we anticipate that the underlying actuarial calculations from the July 2017 valuation may be used to make these updates and additional calculations, without need to gather and analyze new employee or premium data during the interim (FYE 2019) year, just as was allowed under GASB 45. Please note that where GASB 45 typically served as the valuation basis for both financial reporting and funding (contribution) development, it is expected that GASB 75 will serve only for financial reporting purposes; separate calculations would be required to support the development of future prefunding contributions, if any, based on the City's long term funding policy and current funded position. Assuming the City does select a "12 month prior" Measurement Date for GASB 75 reporting, the July 1, 2017 valuation would likely produce the following outputs at these times: • The July 1 (or June 30), 2017 Measurement Date information to be reported in financial statements under GASB 75 for the fiscal year ending June 30, 2018. Estimated completion: on or before April 30, 2018. • The July 1, 2018 (roll forward and re -measurement from the July 2017 valuation) would review the discount rate for continued suitability, gather updated contribution information and develop the GASB 75 information to be reported by the City for the fiscal year ending June 30, 2019. Estimated completion: on or before April 30, 2019. • The process would repeat with the next valuation as of July 1, 2019. One other option would be to choose a "January 1" Measurement Date (i.e., 1/1/2018 for FYE 2018, 1/1/2019 for FYE 2019, etc.) The 12 month prior appears to be more common, but we wanted to mention this as another date used in some instances. Please let us know if you have any questions about these components or the timelines,