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CITY OF SAN LEANDRO NOTES TO BASIC FINANCIAL STATEMENTS For The Year Ended June 30, 2014 NOTE 14 - EMPLOYEE RETIREMENT PLANS (Continued) The City of San Leandro Safety Plan is in a cost-sharing multiple -employer plan which is a single plan with pooling (cost-sharing) arrangements for the participating employers. All risks, rewards, and costs, including benefit costs, are shared and are not attributed individually to the employers. A single actuarial valuation covers all plan members and the same contribution rate(s) applies for each employer. A menu of benefit provisions and other requirements are established by State statutes within the Public Employee's Retirement Law. The City of San Leandro selects optional benefit provisions from the benefit menu by contract with Ca1PERS and adopts those benefits through local resolutions. The City of San Leandro participates in separate Safety and Miscellaneous (Police, and Miscellaneous) Employee Plans. Funding Policy - Active plan members are required by state statute to contribute 8% for miscellaneous employees hired before January 1, 2010 and 9% for safety employees of their annual covered salary. The City makes the contributions required for most City employees on their behalf and for their account, which amounted to $2,571,364 for the year ended June 30, 2014. The city is required to contribute at an actuarially determined rate; the fiscal year 2013-14 rate for miscellaneous employees is 22.69%. As previously mentioned the safety fund is in a cost-sharing multiple -employer plan and the city's current employer contribution rate required is 27.88% of annual covered payroll. In 2003-04, Ca1PERS combined the retirement plans for all public agencies with less than 100 active members to reduce the volatility of employer contribution rates. CaIPERS also created for each member a side fund to amortize each agency's June 30, 2003 unfunded liabilities, amortized over a closed period that depends on the plan date of entry into Ca1PERS. A negative side fund, which the city incurred at the time causes the required employer contribution rate to be increased by the amortization of the side fund. The safety side fund is distinct from the City's other Ca1PERS plans and liabilities. The public safety side fund employer contribution rate is 0% which is amortized at 7.5% and scheduled to be fully amortized by June 30, 2024. The total required contribution rate in fiscal year 2013-14 for public safety is 27.88% of annual covered payroll for both side fund and multiple -employer plan, a decrease of 21.16% from prior fiscal year. The safety side fund is distinct from the City's other Ca1PERS plans. Side funds are retired over a fixed term with a fixed amortization schedule based on Ca1PERS actuarial earnings assumption rate (7.5%). The City's plan has the side fund scheduled to be fully amortized by June 30, 2024. The City's actuary has measured the amortization pay off of the side fund balance to amount to $24,000,000 as of June 30 2011. In March 2012, the City issued $18,305,000 taxable Pension Obligation Bonds to save the City money with lower interest rate significantly less than the interest rate the Ca1PERS charges to amortize the side fund. These bonds are not tax exempt under Federal regulations. The taxable bonds true interest cost rate was 4.72%, which is significantly less than the 7.75% charged by Ca1PERS, represents an expected savings over the life of the bonds. During fiscal year 2011-2012, the City deposited $24,971,910 with Ca1PERS to pay off the side fund. VX