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<br />EXHIBIT A <br /> <br />BLl.R~TE L I <br />j/ lSS0CLATES~ LLa <br /> <br />September 21, 2005 <br /> <br />Ms. Alison Freeman <br />Financial Services Manager <br />City of Redwood City <br />P.O. Box 391 <br />Redwood City, CA 94063-0391 <br /> <br />Re: <br /> <br />GASB 45 - Other Post Employment Benefits (OPEB) Actuarial Study <br /> <br />Dear Ms. Freeman: <br /> <br />Bartel Associates is happy to provide the City of Redwood City actuarial consulting services. <br />This letter summarizes our project scope and fee estimates associated with the City's retiree <br />healthcare obligations. <br /> <br />Background <br /> <br />The City participates in CalPERS retirement program, providing Miscellaneous employees the <br />2% @ 55 benefit and Safety employees the 3% @ 50 benefit. The City currently has <br />approximately 500 active employees and approximately 270 retirees. Additionally, the City <br />participates in CalPERS healthcare program (PEMHCA), paying, for all employees who retire <br />directly from the City, the minimum PEMHCA subsidy ($48.40 per month during 2005, <br />increasing to $97 per month in 2008 and then by healthcare inflation thereafter). An additional <br />amount up to the Kaiser single premium is reimbursed to service retirements, while for several <br />of the bargaining groups, disability retirements receive an amount up to the Kaiser premium for <br />single, 2-party, or family coverage, depending on coverage at disability. The City currently <br />pays for this on a pay-as-you-go basis. <br /> <br />The Governmental Accounting Standards Board (GASB) issued Statement No. 45, Accounting <br />and Financial Reporting by Employers for Postemployment Benefit Plans Other Than Pension <br />Plans, called OPEB by GASB, in June 2004. I was a member GASB's task force providing <br />background information to the Board on this issue. It is important to note the new GASB OPEB <br />standards will almost certainly result in net obligations significantly different from the City's <br />current pay-as-you-go method. The GASB has made it clear the City will need to recognize this <br />promise to future retirees as employees render service to the City. <br /> <br />Valuation Process <br /> <br />Our valuation is a five step process consisting of: <br />1. Gather participant data; <br />2. Meet with City to discuss valuation method and assumptions; <br /> <br /><J.J i Borel .i\n:mlc. SUI"" 4.15 - S,m .!vhttc:u- Cajj¡:<.,ml~l ')4402 <br />main: (;SU/377"ctOU -fax: 6S0!:i4S-:30Sï - web: 'VWW,!:)Jrcd..aSWclai:(:~;,com <br />