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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 />Balance at June 30, 2018 Measurement Date
<br />Changes Recognized for the Measurement Period:
<br />Service Cost
<br />Interest on the total OPEB liability
<br />Changes in benefit terms
<br />Differences between expected and actual experience
<br />Changes of assumptions
<br />Employer contributions - City
<br />Employer contributions - Implicit subsidy
<br />Net investment income
<br />Total OPEB Plan Fiduciary Net OPEB
<br />Liability Net Position Liability/(Asset)
<br />(a) (b) (a) - (b)
<br />$ 19,467,751 $ 14,876,397 $ 4,591,354
<br />692,916
<br />1,067,353
<br />1,270,076
<br />1,975,353
<br />Benefit payments (1,508,460)
<br />Implicit rate subsidy fulfilled
<br />Administrative expenses
<br />Net changes 3,497,238
<br />Balance at June 20, 2019 Measurement Date $ 22,964,989
<br />Plan fiduciary net position as percentage of the total OPEB liability
<br />2,508,460
<br />1,047,583
<br />(1,508,460)
<br />(36,472)
<br />2,011,111
<br />$ 16,887,508
<br />692,916
<br />1,067,353
<br />1,270,076
<br />1,975,353
<br />(2,508,460)
<br />(1,047,583)
<br />36,472
<br />1,486,127
<br />$ 6,077,481
<br />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 />011
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