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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2016 <br /> <br /> <br />NOTE 14 – OTHER POST EMPLOYMENT BENEFITS (Continued) <br /> <br />Annual maximum reimbursement amounts differ depending on when an employee retired from City <br />service. The majority of retirees may be eligible for a maximum of $4,320 in annual reimbursements. <br />Amendments to benefit provisions are negotiated by various bargaining units at the City and must be <br />approved by Council. In fiscal year 2008-09, the City established an irrevocable exclusive agent multi- <br />employer benefit trust which is administered by Public Agency Retirement Services (PARS). The trust <br />will be used to accumulate and invest assets necessary to reimburse retirees. Separate financial reports <br />are issued by PARS for the OPEB plan. The report can be obtained by writing to PARS at 5141 <br />California Avenue, Suite 150, Irvine, CA. 92617-069, or by calling 800-540-6369. <br /> <br />B. Funding Policy <br /> <br />Annual required contributions (ARC) are based upon actuarial valuations. The contribution requirements <br />of the ARC are established and may be amended by the City Council. Plan members do not make <br />contributions to the plan; the plan is funded entirely by the employer contributions. <br /> <br />The City’s annual OPEB cost is calculated based upon the ARC, an amount actuarially determined in <br />accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, <br />if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded <br />actuarial liabilities (or funding excess) over a period not to exceed twenty-five years. The following table <br />shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the <br />plan, and changes in the City’s net OPEB obligation: <br /> <br />Annual required contribution 959,103$ <br />Interest on net OPEB obligation 64,478 <br />Adjustment to the annual required contribution (63,101) <br />Annual OPEB cost 960,480 <br />Less: Contributions made - medical and dental (866,649) <br />Less: Contributions made - PARS (1,750,000) <br />Decrease in net OPEB obligation (1,656,169) <br />Net OPEB obligation - beginning year 422,331 <br />Net OPEB (asset) - end of year (1,233,838)$ <br /> <br />80