02-14-11 Regular Meeting of Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS Notes to the Financial Statements September 30, 2010 10. Post - Employment Benefits — Continued Fiscal Year 2010 2009 Annual required contribution (ARC) $ 2,472,961 $ 2,190,180 Interest on net OPEB obligation 81,894 - Adjustment to the ARC ( 75,874) - Annual OPEB cost 2,478,981 2,190,180 Contributions made ( 538,884) ( 370,318) Increase in net OPEB obligation 1,940,097 1,819,862 Net OPEB obligation, beginning of year 1,819,862 - Net OPEB obligation, ending of year $ 3,759,959 $ 1,819,862 Percentage of ARC contribution 21.7% 16.9% The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2010 and 2009 are as follows. This information is not included for fiscal year 2008 due to fiscal year 2009 being a transition year of the implementation of GASB Statement 45. Percentage of Net Fiscal Annual Annual OPEB OPEB Year Ended OPEB Cost Cost Contributed Obligation 9/30/2009 $ 2,190,180 16.91% $ 1,819,862 9/30/2010 2,478,981 21.74% 3,759,959 Funded Status and Funding Progress. The funding status of the post employment medical plan as of the most recent actuarial valuation date is as follows: Actuarial Valuation Date 12/31 /2008 Actuarial value of assets $ - Actuarial accrued liabilities (AAL) 32,839,108 Unfunded actuarial accrued liability (UAAL) 32,839,108 Funded ratio 0.00% Covered payroll (active plan members) 18,626,734 UAAL as a percentage of covered payroll 56.72% Actuarial valuations of an ongoing plan involve estimates of the value reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. 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 expectations and new estimates are made about the future. A schedule of funding progress presents multi -trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The 2008 actuarial valuation is the most recent and only actuarial valuation available; therefore a schedule of funding progress with multi -trend information is not available. 73