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City of Redwood City <br />Notes to the Basic Financial Statements (Continued) <br />For the Year Ended June 30, 2025 <br /> <br /> <br />115 <br />Note 13 – Other Postemployment Benefits (Continued) <br /> <br />B. City Plan (Continued) <br /> <br />Sensitivity of the Net OPEB Liability to Changes in the Discount Rate <br /> <br />The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if <br />it were calculated using a discount rate that is 1-percentage-point lower (5.25 percent) or 1-percentage- point higher <br />(7.25 percent) than the current discount rate: <br /> <br />Discount Rate -1% Current Discount Rate Discount Rate +1% <br />(5.25%) (6.25%) (7.25%) <br />67,506,461$ 52,841,103$ 40,588,436$ <br />Plan's Net OPEB Liability <br /> <br /> <br />Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates <br /> <br />The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if <br />it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher <br />than the current healthcare cost trend rates: <br /> <br />1% Decrease <br />Current Healthcare <br />Trend Rate 1% Increase <br />38,043,028$ 52,841,103$ 70,908,570$ <br />Plan's Net OPEB Liability <br /> <br /> <br />OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB <br /> <br />For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $8,454,200. At June 30, 2025, the <br />City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following <br />sources: <br /> <br />Deferred Deferred <br />Outflows of Inflows of <br />Resources Resources <br />Contributions made after measurement date 10,438,000$ -$ <br />Differences between expected and actual experience 8,173,925 (3,437,772) <br />Changes in assumptions 3,723,827 (207,134) <br />Net difference between projected and actual <br />earnings of OPEB Plan investments 601,376 - <br />22,937,128$ (3,644,906)$ <br /> <br />The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year <br />period. The remaining gains and losses are amortized over the expected average remaining service life. The <br />expected average remaining service life is 6.3 years, which was determined as of June 30, 2023, the beginning of <br />the measurement period, for employees covered by the OPEB plan benefit terms as of the valuation date. <br /> <br />7.C. - Page 147 of 269 <br />166