|
CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2019
<br />NOTE 14 – OTHER POST EMPLOYMENT BENEFITS (Continued)
<br />Discount Rate – The discount rate used to measure the total OPEB liability is 5.25%. This is the expected
<br />long-term rate of return on City assets using a Moderately Conservative Highmark PLUS fund within the
<br />Public Agency Retirement Services (PARS). The projection of cash flows used to determine the discount
<br />rate assumed that the City contribution will be made at rates equal to the actuarially determined contribution
<br />rates. Based on those assumptions, the OPEB plan's fiduciary net position is projected to cover all future
<br />OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return.
<br />C. Changes in Net OPEB Liability
<br />The changes in the net OPEB liability follows:
<br />Total OPEB Plan Fiduciary Net OPEB
<br />Liability Net Position Liability/(Asset)
<br />(a)(b)(a) - (b)
<br />Balance at June 30, 2018 Measurement Date 19,467,751$ 14,876,397$ 4,591,354$
<br />Changes Recognized for the Measurement Period:
<br />Service Cost 692,916 692,916
<br />Interest on the total OPEB liability 1,067,353 1,067,353
<br />Changes in benefit terms
<br />Differences between expected and actual experience 1,270,076 1,270,076
<br />Changes of assumptions 1,975,353 1,975,353
<br />Employer contributions - City 2,508,460 (2,508,460)
<br />Employer contributions - Implicit subsidy
<br />Net investment income 1,047,583 (1,047,583)
<br />Benefit payments (1,508,460)(1,508,460)
<br />Implicit rate subsidy fulfilled
<br />Administrative expenses (36,472)36,472
<br />Net changes 3,497,238 2,011,111 1,486,127
<br />Balance at June 20, 2019 Measurement Date 22,964,989$ 16,887,508$ 6,077,481$
<br />Plan fiduciary net position as percentage of the total OPEB liability 73.54%
<br />D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend
<br />Rates
<br />The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability
<br />would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point
<br />higher than the current discount rate:
<br />Net OPEB Liability/(Asset)
<br />Discount Rate -1% Current Discount Rate Discount Rate +1%
<br />(4.25%) (5.25%) (6.25%)
<br />9,045,791$6,077,481$ 3,626,639$
<br />84231
|