CAFR 2016

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation/asset were as follows:

Fiscal Year

Annual OPEB Percentage of Annual

Net OPEB

Ending

Cost

OPEB Cost Contributed Obligation

6/30/2014 6/30/2015 6/30/2016

8,097,401 $

102.4% 81.8% 54.1%

1,219,448 $

8,429,516 8,743,851

2,754,352 6,763,896

Funded Status and Funding Progress As of the December 31, 2014 report, the most recent actuarial valuation date, the Plan was partially funded at 16.8%. The actuarial accrued liability for benefits was $90,252,610 and the actuarial value of the assets was $15,182,164 resulting in an unfunded actuarial accrued liability (UAAL) of $75,070,446. The estimated covered payroll (annual payroll of active employees covered by the Plan) was $146,382,467 and the ratio of the UAAL to the covered payroll was 51.3%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and health care trends. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectation and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understood by the employer and the Plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 7.25% investment rate of return which is the expected long-term investment return on the Trust assets calculated based on the funded level of the Plan at the valuation date, and an annual medical cost trend increase of 7.50% to 5.00% annually. Both rates included a 3.00% inflation assumption. The actuarial value of assets, if any, was determined using a market valuation. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at December 31, 2014, was 26 years. H. Deferred Compensation The City offers all of its employees a Deferred Compensation Plan (Plan) in accordance with Internal Revenue Code Section 457 and 401. The Plan, available to permanent City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. The City has complied with changes in laws which govern the City’s Plan, requiring all assets of the Plan to be held in trust, custodial accounts or into annuity contracts for the exclusive benefit of participants and their beneficiaries. Effective January 1, 1999, the City entered in a trust arrangement in compliance with GASB Statement No. 32, Accounting and Financial Reporting for Internal Code Section 457 Deferred Compensation Plans . All transactions are administered by third party administrators and accordingly, Plan assets are not included in the City’s financial statements. The City contributes 3.25% of salary for participating full time employees to the 401(a) Plan. The City also contributes an additional 1.75% to a 401(a) plan prior to FICA deduction of salary if applicable, for those engaged in firefighting, if firefighters choose to defer at least 1.75% of their salary, as well. Those employees engaged in law enforcement may participate in the 457 Plan, however, no City contributions are made on their behalf, but instead, the City contributes 5% of

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