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Annual Pension Cost. For Fiscal Year 2009 -10 the City's annual pension costs of $7,339,843 for PERS was equal to the City's required and actual contribution. The required contribution rate for the Fiscal Year 2009 -10 was determined as a part of the June 30, 2007, actuarial valuation which used the entry age normal actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative expenses); (b) projected salary increases that range from 3.25% to 14.45% for miscellaneous members, and from 3.25% to 13.15% for safety members; (c) an inflation component of 3 %, and (d) 2% per year cost -of- living adjustments for retirees. The actuarial values of assets of the Miscellaneous Plan and Safety Plan were determined using a technique that smoothes the effect of short -term volatility in the market value of investments over a three - year period. The City's annual pension costs for the Fiscal Years 2007 -08, 2008 -09 and 2009 -10 are shown in the following tables: Three -Year Information for Citv of San Leandro Safety Plan Fiscal Year Ended Annual Pension Cost June 30, 2007 $ 4,097,795 June 30, 2008 4,374,571 June 30, 2009 4,254,064 Three -Year Information for City of San Leandro Miscellaneous Plan Fiscal Year Ended Annual Pension Cost June 30, 2007 $ 3,244,159 June 30, 2008 3,306,405 June 30, 2009 3,085,779 Unfunded Actuarial Accrued Liability. The table below shows the recent history of the actuarial value of assets, accrued liability, their relationship, and the relationship of the unfunded liability to payroll for the City. More information is available in Note _ of the City's Fiscal Year 2010 -11 audited financial statements attached as Appendix C. Because the City has less than 100 active members in the Safety Plan as reported in the June 30, 2003 PERS valuation and in one valuation since June 30, 2004, the City is required to participate in a risk pool with other cities and agencies with less than 100 members in their own plans. An actuarial valuation of this single risk pool has been performed, and, standalone information of the schedule of the funding progress for any pooled single entity's plan, including the City's Safety Plan. is not available. A separate, standalone financial statement has been prepared for the City's Side Fund. See "THE FINANCING PLAN" and "THE CITY'S PENSION PLAN" for information about the Safety Plan Side Fund obligations being refunded with proceeds of the Bonds; the City is not refunding any obligations with respect to the Miscellaneous Plan. A -27