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CITY OF EUGENE, OREGON <br />Notes to Basic Financial Statements <br />continued <br />(5) Other Information, continued <br />(F) Other Post-Employment Benefits (OPEB) – Retiree Health and Life Insurance Plan (RHLI), continued <br />Discount Rate <br />The discount rate used to measure the total OPEB liability was 4.00%, which is based on municipal bond rates. <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 />The following presents the City's net OPEB asset (liability) calculated using the discount rate of 4.00%, 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 (3.00%) or one percentage-point higher (5.00%) than the current rate: <br />Current <br />1% decrease discount rate 1% increase <br />(3.00%) (4.00%) (5.00%) <br />City’s proportionate share of the net <br /> OPEB asset (liability) $ (19,233,260) (17,722,000) (16,333,291) <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) $ (15,654,635) (17,722,000) (19,672,332) <br />Changes in OPEB Liability (RHLI) <br />Balance at 6/30/18 (17,528,794) <br />Changes for the year: <br />Service cost (861,347) <br />Interest (645,964) <br />Differences between expected and actual experience (1,113,421) <br />Changes of assumptions or other input 98,644 <br />Benefit payments 2,328,882 <br />Net changes (193,206) <br />Balance at 6/30/19 (17,722,000) <br />Estimated covered payroll 102,474,145 <br />Total OPEB Liability as a percentage of covered payroll 17.29% <br />(G) Contingencies <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 />79 <br />December 9, 2019, Meeting - Item 2CCC Agenda - Page 123