CAFR 2017

Sensitivity of the City’s net OPEB liability to changes in the discount rate The following presents the City’s net OPEB liability calculated using the discount rate of 3.66 percent, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.66 percent) or one percentage point higher (4.66 percent) than the current rate:

1%

Discount

1%

Decrease

Rate

Increase (4.66%)

(2.66%)

(3.66%)

Net OPEB Liability

$

145,955,523

$

131,023,045

$

117,663,743

Sensitivity of the net OPEB liability to changes in healthcare cost trends The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were to calculate healthcare cost trend rates that are 1% point lower or 1% point higher than the current healthcare cost trend rates:

1%

Healthcare Cost

1%

Decrease

Trend Rate

Increase (8.75%)

(6.75%)

(7.75%)

$

113,269,986

$

131,023,045

$

152,216,659

Annual OPEB Cost and Net OPEB Obligation The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost, the amount actually contributed to the Plan, and changes in the City’s net OPEB obligation for postemployment benefits for the Fiscal Year Ending June 30, 2017:

Annual Required Contribution Interest on Net Pension Obligation

$

9,701,120 372,014 (355,439) 9,717,695 (5,155,834) 4,561,861 6,763,896

Adjustment to Annual Required Contribution

Annual OPEB Cost (expense)

Contributions Made

Increase (decrease) in Net OPEB Obligation Net OPEB Obligation-Beginning of Year

Net OPEB Obligation-End of Year

$

11,325,757

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

6/30/2015 6/30/2016 6/30/2017

8,429,516 $

81.8% 54.1% 53.1%

2,754,352 $ 6,763,896 11,325,757

8,743,851 9,717,695

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