Laserfiche WebLink
CITY OF EUGENE, OREGON <br /> <br />Notes to Basic Financial Statements <br /> <br />continued <br />(5) Other Information, continued <br /> <br />(F) Other Post-Employment Benefits (OPEB) – Retiree Health and Life Insurance Plan (RHLI), continued <br /> <br />Discount Rate <br /> <br />The discount rate used to measure the total OPEB liability was 3.75%, which is based on municipal bond rates. <br /> <br />Sensitivity of the City's proportionate share of the net OPEB asset (liability) to changes in the discount rate and trend <br />rates <br /> <br />The following presents the City's net OPEB asset (liability) calculated using the discount rate of 3.75%, as well as <br />what the City's net OPEB asset (liability) would be if it were calculated using a discount rate that is one percentage- <br />point lower (2.75%) or one percentage-point higher (4.75%) than the current rate: <br /> <br />Current <br />1% decrease discount rate 1% increase <br />(2.75%) (3.75%) (4.75%) <br />City’s proportionate share of the net <br /> OPEB asset (liability) $ (19,036,556) (17,528,794) (16,150,833) <br /> <br />The following presents the City's net OPEB asset (liability) calculated using the healthcare cost trend rate of 7.00% <br />graded down to 5.00%, as well as what the City’s net OPEB asset (liability) would be if it were calculated using a <br />healthcare cost trend rate that is one percentage-point lower (6.00%) or one percentage-point higher (8.00%) than the <br />current rate. <br />Current <br />1% decrease trend rate 1% increase <br />6.00% graded 7.00% graded 8.00% graded <br />down to 4.00% down to 5.00% down to 6.00% <br />City’s proportionate share of the net <br /> OPEB asset (liability) $ (15,608,143) (17,528,794) (19,799,019) <br /> <br />Changes in OPEB Liability (RHLI) <br /> <br />Balance at 6/30/17 (17,194,556) <br />Changes for the year: <br />Service cost (840,339) <br />Interest (639,080) <br />Benefit payments 1,145,181 <br />Net changes (334,238) <br />Balance at 6/30/18 (17,528,794) <br />Estimated covered payroll 106,063,368 <br />Total OPEB Asset (Liability) as a percentage <br />of payroll 16.52% <br /> <br />(G) Contingencies <br /> <br />The City is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its <br />operations. Claims covered by the City’s self-insurance internal service fund are reviewed and losses are accrued <br />based upon the judgment of City management. Based upon the advice of legal counsel with respect to such litigation <br />and claims, City management cannot determine what effect the ultimate disposition of these matters will have on the <br />financial position or results of operations of City funds. <br /> <br />83 <br />December 10, 2018, Meeting - Item 2D