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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2021
<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, 2020 Measurement Date 23,752,824$ 19,149,376$ 4,603,448$
<br />Changes Recognized for the Measurement Period:
<br />Service Cost 868,358 - 868,358
<br />Interest on the total OPEB liability 1,257,969 - 1,257,969
<br />Changes in benefit terms
<br />Differences between expected and actual experience
<br />Changes of assumptions
<br />Employer contributions - City - 1,319,716 (1,319,716)
<br />Employer contributions - Implicit subsidy
<br />Net investment income - 2,700,965 (2,700,965)
<br />Benefit payments (1,319,716) (1,319,716)-
<br />Implicit rate subsidy fulfilled
<br />Administrative expenses - (43,249)43,249
<br />Net changes 806,611 2,657,716 (1,851,105)
<br />Balance at June 20, 2021 Measurement Date 24,559,435$ 21,807,092$ 2,752,343$
<br />Plan fiduciary net position as percentage of the total OPEB liability 88.79%
<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 />5,970,773$ 2,752,343$ 97,034$
<br />85346
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