AgdaPkt 2015-04-13 Closed and Joint SA and PFA REVISED 04_10_2015

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8.A. - Page 79 The tables below show projected employer contribution rates (before employee cost sharing which,by 2016,will range from 5% to 12% depending opn bargaining group)for the next five fiscal years assuming PERS earns 18 percent for Fiscal Year 2013-14 and 7.50 percent every fiscal year thereafter and assuming that all other actuarial assumptions will be realized and that no further changes to assumptions, contributions,benefits or funding will occur between now and the beginning of Fiscal Year 2016-17. Miscellaneous Plan New Rate Projected Future Employer Contribution Rates 2015-16 2016-17 2017-18 2018-19 2019-2020 2020-21 Contribution Rates: 24.134% 26.2% 27.8% 29.3% 30.9% 31.0% Safety Plan New Rate Projected Future Employer Contribution Rates 2015-16 2016-17 2017-18 2018-19 2019-2020 2020-21 Contribution Rates: 42.457% 45.4% 47.4% 49.3% 51.3% 51.3% During fiscal year 2014-15, governmental agencies are required to implement a new accounting standard, Governmental Accounting Standards Board Statement 68 (GASB 68). GASB 68 requires all governmental agencies to record the unfunded pension liability on their balance sheet (i.e. Statement of Net Position). Previously, the unfunded pension liability was required to be reported only in the notes to the financial statements. This unfunded pension liability will now be reflected on the entity-wide balance sheet,and the balance sheet of the proprietary funds,which includes the City's Water Utility Fund. The new balance sheet presentation of this existing obligation will create a deficit in the unrestricted portion of the City's total unrestricted equity (i.e. Unrestricted Net Position), and will negatively impact the equity of the Water Utility Fund. GASB 68 will also change the pension expense calculation from actual contributions made to a pension plan, to an expense based on actuarial calculations. The GASB 68 derived change in pension expense does not have an impact on operations or debt service coverage and will therefore be excluded from the debt service coverage ratio calculation. Post Employment Benefits. The City administers a defined benefit post-employment healthcare plan. Permanent employees who retire under the City's retirement plan (Ca1PERS) are, pursuant to the vesting schedule in their respected collective bargaining agreements, eligible to have their medical insurance premiums reimbursed by the City up to the Kaiser single-employee premium rate. Generally, medical insurance premiums for spouses and other dependents are not paid by the City,but dependents may be added at the retiree's expense. In the case of public safety industrial disability retirement, the City reimburses up to the Kaiser family rate for the retiree and dependents. There are currently 319 retirees receiving the retiree-only health benefit,and 48 retirees receiving the family health benefit. The City is not required by law or contractual agreement to provide funding for retiree health costs other than the pay-as-you-go amount necessary to provide current benefits to retirees. The City's retiree health plan is being managed through the California Employer's Retiree Benefits Trust (CERBT), an irrevocable trust fund that allows public employers to prefund the future cost of their retiree health insurance benefits and other post employment benefits for their covered employees or retirees. The CERBT's administrator, Ca1PERS, issues a publicly available financial report consisting of financial statements and required supplementary information for CERBT in aggregate.The report may be obtained by writing to Ca1PERS, Lincoln Plaza North, 400 Q Street, Sacramento, CA 95811. During FY 2013-14, the City contributed $4,890,000, or 100%, of the actuarially required contributions to the retiree health plan. Total current payroll for all covered employees for the fiscal year ended June 30, 2014 was $48,399,901. The City's annual other post employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution(ARC)of the employer,an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an Appendix A Page 5