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CITY OF SAN LEANDRO <br />STAFF REPORT <br />DATE: May 18, 2009 <br />TO: Stephen L. Hollister, City Manager <br />FROM: Perry Carter, Interim Finance Director <br />SUBJECT/DESCRIPTION: <br />APPROVED AND <br />FORWARDED <br />TO CITY COUNCIL <br />Stephen L. Hollister <br />City Manager <br />MATTER OF ADOPTING AN OTHER POST EMPLOYMENT BENEFITS (OPEB) PLAN <br />AND TRUST, APPOINTMENT OF A PLAN AND TRUST ADMINISTRATOR, <br />AUTHORIZATION OF AN ADMINISTRATIVE SERVICES AGREEMENT AND <br />AUTHORIZATION OF THE 2008-09 OPEB CONTRIBUTION OF $500,000 FROM THE <br />CITY'S SELF INSURANCE FUND. <br />SUMMARY AND RECOMMENDATION <br />Authorize the City Manager to implement an OPEB Post-Retirement Health Care Plan and Trust <br />for San Leandro, execute an administrative services agreement to administer the Trust and <br />authorize the City Manager to make a transfer from the Self Insurance Fund to the Trust of <br />$500,000 for FY 2008-09. <br />BACKGROUND <br />GASB 45 <br />In 2004 the Governmental Accounting Standards Board (GASB) released Statement No. 45, <br />Accounting and Financial Reporting for Post-Employment Benefits Other than Pension, <br />generally referred to as OPEB. GASB 45 requires public agencies, including the City, to report <br />costs and obligations for post-employment health care and other post-employment benefits much <br />like the current requirement to report pension obligations. <br />GASB 45 applies to the City of San Leandro, as the City provides fixed payments towards the <br />cost of health benefits for most retirees until age 65. The City will be required to report in <br />accordance with GASB 45 starting with fiscal year 2008-09. <br />It is important to note that GASB 45 does not require the City to fund its OPEB obligation in any <br />particular manner. However, regardless of the funding approach, GASB 45 does require an <br />actuarial study and disclosure of the City's Unfunded Actuarial Accrued Liability, (UAAL), if <br />any, and the Annual Required Contribution, (ARC), for any OPEB obligations. <br />The UAAL refers to the obligation for both existing retirees and current employees that have <br />earned benefits as of a specific date, in this case June 30, 2007. To the extent that assets have <br />