149 / 373
38oo
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB
obligation/asset were as follows:
Fiscal Year
Annual OPEB Percentage of Annual
Net OPEB
Ending
Cost
OPEB Cost Contributed Obligation
6/30/2014
8,097,401
$
102.4%
1,219,448
$
6/30/2015
8,429,516
81.8%
2,754,352
6/30/2016
8,743,851
54.1%
6,763,896
Funded Status and Funding Progress
As of the December 31, 2014 report, the most recent actuarial valuation date, the Plan was partially funded at 16.8%. The
actuarial accrued liability for benefits was $90,252,610 and the actuarial value of the assets was $15,182,164 resulting in an
unfunded actuarial accrued liability (UAAL) of $75,070,446. The estimated covered payroll (annual payroll of active
employees covered by the Plan) was $146,382,467 and the ratio of the UAAL to the covered payroll was 51.3%. Actuarial
valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of
occurrence of events far into the future. Examples include assumptions about future employment, mortality, and health care
trends. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer
are subject to continual revision as actual results are compared with past expectation and new estimates are made about the
future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the
financial statements, presents multiyear trend information about whether the actuarial value of Plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understood by the
employer and the Plan members) and include the types of benefits provided at the time of each valuation and the historical
pattern of sharing of benefit costs between the employer and Plan members at that point. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the December 31, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial
assumptions included a 7.25% investment rate of return which is the expected long-term investment return on the Trust assets
calculated based on the funded level of the Plan at the valuation date, and an annual medical cost trend increase of 7.50% to
5.00% annually. Both rates included a 3.00% inflation assumption. The actuarial value of assets, if any, was determined
using a market valuation. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. The
remaining amortization period at December 31, 2014, was 26 years.
H. Deferred Compensation
The City offers all of its employees a Deferred Compensation Plan (Plan) in accordance with Internal Revenue Code Section
457 and 401. The Plan, available to permanent City employees, permits them to defer a portion of their salary until future
years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable
emergency.
The City has complied with changes in laws which govern the City’s Plan, requiring all assets of the Plan to be held in trust,
custodial accounts or into annuity contracts for the exclusive benefit of participants and their beneficiaries. Effective January
1, 1999, the City entered in a trust arrangement in compliance with GASB Statement No. 32,
Accounting and Financial
Reporting for Internal Code Section 457 Deferred Compensation Plans
. All transactions are administered by third party
administrators and accordingly, Plan assets are not included in the City’s financial statements.
The City contributes 3.25% of salary for participating full time employees to the 401(a) Plan. The City also contributes an
additional 1.75% to a 401(a) plan prior to FICA deduction of salary if applicable, for those engaged in firefighting, if
firefighters choose to defer at least 1.75% of their salary, as well. Those employees engaged in law enforcement may
participate in the 457 Plan, however, no City contributions are made on their behalf, but instead, the City contributes 5% of