CITY OF TITUSVILLE COUNCIL AGENDA

Transcription

1 CITY OF TITUSVILLE COUNCIL AGENDA March 27, :30 PM - Council Chamber at City Hall 555 South Washington Avenue, Titusville, FL Any person who decides to appeal any decision of the City Council with respect to any matter considered at this meeting will need a record of the proceedings, and for such purpose, may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. The City desires to accommodate persons with disabilities. Accordingly, any physically handicapped person, pursuant to Chapter Florida Statutes, should, at least 48 hours prior to the meeting, submit a written request to the chairperson that the physically handicapped person desires to attend the meeting. 1. CALL TO ORDER 2. INVOCATION 3. PLEDGE OF ALLEGIANCE 4. SPECIAL RECOGNITIONS & PRESENTATIONS A. Employee(s) of the Month - February 2018 Recognize Mandy Lamothe and Mariana Hristova of the Community Development Department as the Employee(s) of the Month for February B. Award by Florida League of Cities Municipal Youth Video Contest Florida League of Cities Representative Mark Sittig will present the City's Student Advisory Council an award for taking 5th place in the League's 2017 Municipal Youth Video Contest (Fall 2017), whose theme was My City; I'm Proud of It; I'm Part of It! The 60-second video will be shown at this meeting. C Trails Promoter of the Year Award Presentation by Becky Alfonso, The Florida Bicycle Association, to the Mayor for the 2017 Trails Promoter of the Year Award. D. Other Post Employee Benefits (OPEB) Actuarial Valuation with GASB 75 Disclosures FY 2017 Acknowledge presentation and receipt of the OPEB Actuarial Valuation. Page 1 of 62

2 E. FY 2017 City Comprehensive Financial Audit Report (CAFR) Acknowledge receipt of the FY 2017 annual audit of the City of Titusville as prepared by the accounting firm of James Moore, Certified Public Accountants and Consultants. F. Letters of Appreciation Attached is a list of employee names that received Letters of Appreciation. 5. PETITIONS AND REQUESTS FROM THE PUBLIC PRESENT (NON-AGENDA ITEMS) Page 2 of 62

3 Category: 4. Item: A. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: The Honorable Mayor and City Council William S. Larese, City Manager Subject: Employee(s) of the Month - February 2018 Department/Office: Human Resources Recommended Action: Recognize Mandy Lamothe and Mariana Hristova of the Community Development Department as the Employee(s) of the Month for February Summary Explanation & Background: N/A Alternatives: N/A Item Budgeted: NA Source/use of funds/budget Book Page: N/A Strategic Plan: Strategic Plan Impact: N/A ATTACHMENTS: Description Upload Date Type Employee of the Month - February /13/2018 Backup Material Page 3 of 62

4 Memorandum TO: FROM: Tammy Mosher, Human Resources Assistant Jolynn Donhoff, Assistant City Clerk DATE: March 6, 2018 SUBJECT: Employee(s) of the Month I would like to nominate two (2) Community Development employees as the Employee(s) of the Month, including Mandy Lamothe, Development Office Manager and Mariana Hristova, GIS Analyst Lead for their assistance with the 2018 Youth Leadership Seminar hosted by the City s Student Advisory Council. In fall of 2017, the Student Advisory Council was in the midst of planning the program, keynote speakers, and activities for their upcoming leadership seminar. The students requested Ms. Lamothe and her expertise related to site planning requirements, due to the seminar s inter-active exercise would ask the guests (local high school students) to work in groups and design a mock, family-friendly, civic center on three possible properties located in City limits. Ms. Lamothe made herself available to the Student Advisory Council and attended their monthly meets to help the students develop the mock civic center exercise. Ms. Lamothe informed and guided the Student Advisory Council on City zoning and related development requirements, such as setbacks, landscaping, sidewalks, parking, water, sewer, stormwater, fire hydrants, water, sewer, etc. Ms. Lamothe also played a major role in co-writing and reviewing clear and concise written instructions for the civic center exercise with the Student Advisory Council, to ensure (1) The Student Advisory Council would be confident about leading and hosting the activity with their guests and (2) The seminar s guests could meet their goals. In addition, Ms. Hristova took time out of her busy schedule to assist the Student Advisory Council with their project by providing aerial maps for three properties within City limits. Ms. Hristova customized the aerial maps to allow each subject property to appear blank or like a silhouette, while the remainder of each aerial map displayed the usual colorful topography, adjacent roads, etc. Without the help of these two City staff members and their invaluable expertise, the Student Advisory Council would have had a more difficult time planning the program for the 2018 Leadership Seminar. Please consider these employees as the Employees of the Month during the next scheduled City Council meeting for Special Recognitions and Presentations. Thank you. Page 4 of 62

5 Category: 4. Item: B. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: Subject: The Honorable Mayor and City Council William S. Larese, City Manager Award by Florida League of Cities Municipal Youth Video Contest Department/Office: City Clerk Recommended Action: Florida League of Cities Representative Mark Sittig will present the City's Student Advisory Council an award for taking 5th place in the League's 2017 Municipal Youth Video Contest (Fall 2017), whose theme was My City; I'm Proud of It; I'm Part of It! The 60-second video will be shown at this meeting. Summary Explanation & Background: NA Alternatives: NA Item Budgeted: NA Source/use of funds/budget Book Page: NA Strategic Plan: Strategic Plan Impact: NA ATTACHMENTS: Description Upload Date Type No Attachments Available Page 5 of 62

6 Category: 4. Item: C. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: Subject: The Honorable Mayor and City Council William S. Larese, City Manager 2017 Trails Promoter of the Year Award Department/Office: City Manager Recommended Action: Presentation by Becky Alfonso, The Florida Bicycle Association, to the Mayor for the 2017 Trails Promoter of the Year Award. Summary Explanation & Background: N/A Alternatives: N/A Item Budgeted: NA Source/use of funds/budget Book Page: N/A Strategic Plan: Strategic Plan Impact: N/A ATTACHMENTS: Description Upload Date Type 2017 Trails Promoter of the Year Award 2/21/2018 Backup Material Page 6 of 62

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8 Category: 4. Item: D. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: Subject: The Honorable Mayor and City Council William S. Larese, City Manager Other Post Employee Benefits (OPEB) Actuarial Valuation with GASB 75 Disclosures FY 2017 Department/Office: Finance Recommended Action: Acknowledge presentation and receipt of the OPEB Actuarial Valuation. Summary Explanation & Background: The City's actuary from Foster & Foster to review the Actuarial Valuation Report with GASB 74/75 Disclosures for FY ending 9/30/2017. Alternatives: N/A Item Budgeted: No Source/use of funds/budget Book Page: N/A Strategic Plan: Strategic Plan Impact: N/A ATTACHMENTS: Description Upload Date Type OPEB Acturial Valuation FY /7/2018 Backup Material Previously Reported GASB 74/75 Liability 3/15/2018 Backup Material Page 8 of 62

9 THE CITY OF TITUSVILLE OTHER POSTEMPLOYMENT BENEFITS PROGRAM ACTUARIAL VALUATION AS OF OCTOBER 1, 2016 GASB 74 / 75 DISCLOSURES FOR THE PLAN/FISCAL YEAR ENDING SEPTEMBER 30, 2017 Page 9 of 62

10 March 2, 2018 City of Titusville OPEB Board c/o Ms. Laura Bledsoe 555 South Washington Avenue Titusville, FL Re: City of Titusville GASB 74/75 Valuation for Plan/Fiscal Year Ending September 30, 2017 Dear Committee Members: We are pleased to present to the City of Titusville this report of the annual actuarial valuation of the City of Titusville s Other Postemployment Benefits (OPEB) Program. This valuation was performed to determine annual expenses associated with providing OPEB benefits, the current funded status of the Plan, and to provide all necessary schedules required to comply with the Governmental Accounting Standards Board No. 75. The City has elected to early adopt GASB 75 for the Fiscal Year The schedules related to the Governmental Accounting Standards Board No. 74 can be found in Appendix 1. The measurements shown in this actuarial valuation may not be applicable for other purposes. Future actuarial measurements may differ significantly from the current measurements presented in this report due to factors such as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period); and changes in plan provisions or applicable law. The valuation has been conducted in accordance with generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board, and reflects all applicable federal laws and regulations. In our opinion, the assumptions used in this valuation, as adopted by the City, represent reasonable expectations of anticipated plan experience. In conducting the valuation, we have relied on personnel and plan design information supplied by the City, and the actuarial assumptions and methods described in the Actuarial Assumptions section of this report. While we cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and reasonableness. Because of this review, we have no reason to doubt the substantial accuracy of the information and believe that it has produced appropriate results. This information, along with any adjustments or modifications, is summarized in various sections of this report. The total OPEB liability, net OPEB liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of October 1, It is our opinion that the assumptions used for this purpose are internally consistent, reasonable, and comply with the requirements under GASB No.74 and GASB No. 75. The undersigned is familiar with the immediate and long-term aspects of OPEB valuations, and meets the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. All the sections of this report are considered an integral part of the actuarial opinions Parker Commons Blvd Suite 104 Fort Myers, FL (239) Fax (239) Page 10 of 62

11 March 2, 2018 Page 2 To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any direct financial interest or indirect material interest in the City of Titusville, nor does anyone at Foster & Foster, Inc. act as a member of the City Council of the City of Titusville. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report. If there are any questions, concerns, or comments about any of the items contained in this report, please contact either Brad or Aimee at Respectfully submitted, Foster & Foster, Inc. By: Bradley R. Heinrichs, FSA, EA, MAAA By: Aimee M. Strickland, FSA, EA, MAAA By: Matt Plachta, ASA, MAAA BRH\aw Enclosures Parker Commons Blvd Suite 104 Fort Myers, FL (239) Fax (239) Page 11 of 62

12 Table of Contents SECTION 1 EXECUTIVE SUMMARY... 1 SECTION 2 - NOTES TO THE FINANCIAL STATEMENTS... 4 SECTION 3 GASB 75 DISCLOSURE SCHEDULES... 9 SECTION 4 GASB 75 AMORTIZATION SCHEDULES SECTION 6 - PER CAPITA CLAIMS COSTS AND CONTRIBUTION AMOUNTS SECTION 7 - MEMBER STATISTICS STATISTICAL DATA AGE AND SERVICE DISTRIBUTION SECTION 8 - ACTUARIAL ASSUMPTIONS AND FUNDING METHODS SECTION 9 - SUMMARY OF PLAN PROVISIONS APPENDIX 1 GASB 74 DISCLOSURES FOR PLAN YEAR APPENDIX 2 GASB 74/75 CROSSOVER TEST Page 12 of 62

13 SECTION 1 Executive Summary SECTION 1 EXECUTIVE SUMMARY The regular annual actuarial valuation of the City of Titusville Other Postemployment Benefits (OPEB) Program, performed as of October 1, 2016, has been completed and the results are presented in this Report. For purposes of this valuation, Medical, Dental, and Life Insurances were taken into consideration. The results of this valuation are applicable to the plan/fiscal year ending September 30, The City is implementing GASB 74 for the Plan Year ending September 30, 2017 as provided in the Appendix. The City is early adopting the GASB 75 standard for the Fiscal Year ending September 30, 2017, based on a measurement date of September 30, The following table shows the key components of the City of Titusville s OPEB valuation for FY 2017 under GASB 75: Measurement Date: 9/30/2017 Total OPEB Liability 62,801,304 Plan Fiduciary Net Position 2,526,828 Sponsor's Net OPEB Liability $ 60,274,476 Covered Employee Payroll $ 16,889,001 Sponsor's Net OPEB Liability as a percentage of Covered Employee Payroll % Active Participants 396 Retired Members 285 Covered Spouses 28 Total 709 For the Year Ended September 30, 2017: GASB 75 OPEB Expense $ 1,375,087 Page 13 of 62 1 F oster & Foster

14 SECTION 1 Executive Summary Changes since the Prior Valuation The following changes have been made since the prior valuation: The census data reflects changes in status for the twelve (12) month period since October_1,_2015. The annual per capita claims costs have been updated to reflect current age-adjusted premiums. The premium rates have been updated to use the rates effective for fiscal year The mortality rates have been updated to use rates mandated by Chapter , Florida Statutes for pension plans. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The rates are those outlined in Milliman s July 1, 2015 FRS valuation report. Health care inflation rates have been updated with Post-65 trend set to a flat 4%. In response to actions taken at the May 9, 2017 council meeting, non-medicare retirees who were hired before 10/1/2013 and retired before 4/4/2014 had the $500 per month cap on health insurance benefits lifted. Sponsor s Funding Policy The numbers shown above reflect a decision to begin funding the program, starting with partial funding of the ARC in the Fiscal Year ending in 2009 and continuing for each subsequent fiscal year. Therefore, the Contributions made to the program are assumed to be at least the benefits paid to retirees (both on an explicit and implicit basis) and administrative expenses. Page 14 of 62 2 F oster & Foster

15 SECTION 1 Executive Summary GASB 74/75 The GASB 74/75 disclosure results are developed using an October 1, 2016 valuation date. For purposes of GASB 75 reporting, the measurement date is September 30, 2017, with the measurement period equal to the fiscal year reporting period (consistent with the GASB 68 methodology used for the pension plan). The balance of this Report presents additional details of the actuarial valuation and the general operation of the Fund. The undersigned would be pleased to meet with the Board of Trustees in order to discuss the Report and any pending questions concerning its contents. Respectfully submitted, FOSTER & FOSTER, INC. By: Brad Heinrichs, FSA, MAAA By: Aimee M. Strickland, FSA, MAAA Page 15 of 62 3 F oster & Foster

16 SECTION 2 Notes to Financial Statements SECTION 2 - NOTES TO THE FINANCIAL STATEMENTS Summary of Significant Accounting Policies Postemployment Benefits Other Than Pensions (OPEB) For purposes of measuring the net OPEB Liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City of Titusville 's Retiree Health Care Plan (Plan) and additions to/ deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by The Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. General Information about the OPEB Plan Plan Description The City of Titusville s Retiree Health Care Plan (Plan) is a single-employer defined benefit postemployment health care plan that covers eligible retired employees. The Plan, which is administered by the City, allows employees who retire and meet retirement eligibility requirements under one of the City s retirement plans to continue medical and dental coverage as a participant in the City s plan. Employees covered by benefit terms. At September 30, 2016, the following employees were covered by the benefit terms: Inactive Plan Members, Covered Spouses, or Beneficiaries Currently Receiving Benefits 313 Inactive Plan Members Entitled to But Not Yet Receiving Benefits - Active Plan Members Benefits Provided The benefits provided are the same as those provided for active employees. Spouses and dependents of eligible retirees are also eligible for medical coverage. All employees of the City of Titusville are eligible to receive postemployment health care benefits. Coverage for retirees and their spouses and dependents is provided for the life of the retiree. The Trust was established to advance fund benefits provided under the Plan. Page 16 of 62 4 F oster & Foster

17 SECTION 2 Notes to Financial Statements Contributions The City of Titusville adopted health-related benefit changes during 2013 with effective dates varying by employee class (December 2013 for service workers represented by LIUNA, April 2014 for Fire and Nonrepresented employees, and June 2014 for Police employees). For employees who retire after the effective dates listed above, the City of Titusville will contribute the greater of 50% of the active health premium or $8/month for every year of service for retirees participating in the City s group insurance plans. This benefit is capped at $500 a month. For retirees who were hired after 10/1/2003, the City provides a credit of $8/month for every year of service, up to a maximum of $200/month, toward the premium of the City s group insurance plans. The retiree is responsible for 100% of the costs of dental coverage. For all retirements prior to the effective dates listed above, the City of Titusville will continue to contribute a portion (either 75% or 100%) of the active health and dental premiums for retirees participating in the City s group insurance plans who were hired prior to 10/1/2003. The City s subsidy is no longer capped for these retirees, per the City Council s decision to rescind the cap at its May 9, 2017 meeting. For retirees who were hired after 10/1/2003, the City provides a credit of $8/month for every year of service, up to a maximum of $200/month, toward the premium of the City s group insurance plans. Retirees may purchase spouse coverage through the City s group insurance plans at their own expense. An employer-provided implicit subsidy for the health plan will still exist even for those participants receiving 50%, 75% or 100% of the premium paid by the City. In future years, contributions are assumed to increase at the same rate as premiums. Note that the projected premiums for the dental benefit are assumed to cover the entire cost of the program. Page 17 of 62 5 F oster & Foster

18 SECTION 2 Notes to Financial Statements Net OPEB Liability SECTION 2 NOTES TO FINANCIAL STATEMENTS The measurement date for GASB 75 reporting is September 30, The measurement period for the OPEB expense was October 1, 2016 to September 30, The reporting period is October 1, 2016 through September 30, The Sponsor s Net OPEB Liability was measured as of September 30, The Total OPEB Liability used to calculate the Net OPEB Liability was determined as of that date. Note - The Sponsor s Net OPEB Liability for the City of Titusville s ledger adjustment was measured as of September 30, 2016 using a discount rate of 3.06%. The Total OPEB Liability was rolled-forward from September 30, 2016 at 3.06%, thus producing no experience gain or loss for the period ending September 30, Actuarial Assumptions: The Total OPEB Liability was determined by an actuarial valuation as of October 1, 2016 using the following actuarial assumptions: Inflation 2.50% Salary Increases 6.00% Discount Rate 3.64% Investment Rate of Return 7.00% Healthcare cost trend rates 4.00% % For general employees, mortality rates were based on the RP-2000 mortality tables. For female lives, 100% of the white collar table was used. For male lives, a 50% white collar table, 50% blue collar table blend was used. All tables include fully generational adjustments for mortality improvements using improvement scale BB. For disabled lives, mortality rates were based on the RP-2000 sex-distinct disabled mortality tables with female lives set forward two (2) years, male lives set back four (4) years. Disabled mortality has not been adjusted for mortality improvements. For police and fire employees, mortality rates were also based on various RP-2000 mortality tables. For female lives, 100% of the white-collar table was used. For male lives, a 10% white collar table, 90% blue collar table blend was used. All tables include fully generational adjustments for mortality improvements using improvement scale BB. For disabled female lives, a blend of 60% of the RP-2000 disabled female mortality table set forward two (2) years and 40% of the white-collar table with no setback was used. For disabled male lives, a blend of 60% of the RP-2000 disabled male mortality table set back four (4) year and 40% of the white-collar table with no setback was used. Disabled mortality has not been adjusted for mortality improvements. Page 18 of 62 6 F oster & Foster

19 SECTION 2 Notes to Financial Statements Actuarial Assumptions (Continued): The long-term expected rate of return on OPEB Plan investments was determined using the OPEB Investment Policy, latest revision was approved March 14, The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Actual Allocation Long Term Expected Real Rate of Return Domestic Equity 42% 45% 7.50% International Equity 23% 23% 8.50% Fixed Income 35% 30% 2.50% Cash Equivalent 0% 2% 0.00% Total 100% 100% Asset Class allocations were provided to us by the City. Long term expected real rates of return by asset class match those used in the pension valuation for the respective asset classes. Discount Rate: The City contributes a portion of the ARC to the fund annually, but otherwise funds benefits on a pay-asyou-go basis. The expected rate of return on trust investments is 7.00%. This rate was used to discount projected benefit payments for 0 years at which point the trust will become insolvent. The remaining projected benefit payments were discounted at a municipal bond rate. The high quality municipal bond rate, 3.64%, was based on the week closest but not later than the measurement date of the Bond Buyer 20-Bond Index as published by the Federal Reserve. The 20-Bond Index consists of 20 general obligation bonds that mature in 20 years. The average rating of the 20 bonds is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard & Poor's Corp.'s AA. 7 F oster & Foster Page 19 of 62

20 SECTION 2 Notes to Financial Statements Changes in Net OPEB Liability Increase (Decrease) Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability (a) (b) (a)-(b) Reporting Period Ending September 30, 2016 $ 67,515,138 $ 2,069,368 $ 65,445,770 Changes for the Year: Service Cost 1,097,474-1,097,474 Interest 2,062,341-2,062,341 Differences between Expected and Actual Experience Changes of assumptions (5,423,507) - (5,423,507) Changes of benefit terms Explicit Contributions - Employer - 1,657,884 (1,657,884) Implicit Contributions - Employer - 566,062 (566,062) Explicit Contributions - Employee - 443,463 (443,463) Net Investment Income - 263,882 (263,882) Explicit Benefit Payments (1,884,080) (1,884,080) - Implicit Benefit Payments (566,062) (566,062) - Administrative Expense - (23,689) 23,689 Other Changes Net Changes (4,713,834) 457,460 (5,171,294) Reporting Period Ending September 30, 2017 $ 62,801,304 $ 2,526,828 $ 60,274,476 Sensitivity of the Net OPEB Liability to changes in the Discount Rate: The following presents the Net OPEB Liability of the Sponsor, as well as what the Sponsor s Net OPEB Liability would be if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current discount rate: Current Discount 1% Decrease Rate 1% Increase 2.64% 3.64% 4.64% Net OPEB Liability (asset) $ 70,101,016 $ 60,274,476 $ 52,408,711 Sensitivity of the Net OPEB Liability to changes in the Healthcare Cost Trend Rates: The following presents the Net OPEB Liability of the Sponsor, as well as what the Sponsor s Net OPEB Liability would be if it were calculated using healthcare cost trend rates that are one percentage-point lower or one percentage-point higher than the current healthcare cost trend rates: 1% Decrease Healthcare Cost Trend Rates 1% Increase 3.00% % 4.00% % 5.00% % Net OPEB Liability (asset) $ 52,775,437 $ 60,274,476 $ 69,317,563 OPEB Plan Fiduciary Net Position: Detailed information about the OPEB Plan s Fiduciary Net Position is available in a separately issued Plan financial report. Page 20 of 62 8 F oster & Foster

21 SECTION 3 GASB 75 Disclosure Schedules SECTION 3 GASB 75 DISCLOSURE SCHEDULES OPEB EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO OPEB For the year ended September 30, 2017, the Sponsor will recognize OPEB Expense of $1,375,087. On September 30, 2017, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to OPEB from the following sources: Deferred Inflows of Resources Deferred Outflows of Resources Differences between Expected and Actual Experience - - Changes of assumptions 4,338,806 - Net difference between Projected and Actual Earnings on - 16,371 OPEB Plan investments Total $ 4,338,806 $ 16,371 Amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to OPEB will be recognized in OPEB Expense as follows: Year ended September 30: 2018 $ (1,080,608) 2019 $ (1,080,608) 2020 $ (1,080,608) 2021 $ (1,080,611) 2022 $ - Thereafter $ - Page 21 of 62 9 F oster & Foster

22 SECTION 3 GASB 75 Disclosure Schedules SCHEDULE OF CHANGES IN THE SPONSOR'S NET OPEB LIABILITY AND RELATED RATIOS Reporting Period Ending 09/30/2017 Measurement Date 09/30/2017 Total OPEB Liability Service Cost $ 1,097,474 Interest 2,062,341 Changes of benefit terms - Differences between Expected and Actual Experience - Changes of assumptions (5,423,507) Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Net Change in Total OPEB Liability (4,713,834) Total OPEB Liability - Beginning 67,515,138 Total OPEB Liability - Ending (a) $ 62,801,304 Plan Fiduciary Net Position Explicit Contributions - Employer $ 1,657,884 Implicit Contributions - Employer 566,062 Explicit Contributions - Employee 443,463 Net Investment Income 263,882 Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Other Income - Administrative Expense (23,689) Net Change in Plan Fiduciary Net Position 457,460 Plan Fiduciary Net Position - Beginning 2,069,368 Plan Fiduciary Net Position - Ending (b) $ 2,526,828 Sponsor's Net OPEB Liability - Ending (a) - (b) $ 60,274,476 Plan Fiduciary Net Position as a percentage of the Total OPEB Liability 4.02% Covered Employee Payroll $ 16,889,001 Sponsor's Net OPEB Liability as a percentage of Covered Employee Payroll % Page 22 of F oster & Foster

23 SECTION 3 GASB 75 Disclosure Schedules SCHEDULE OF SPONSOR CONTRIBUTIONS 09/30/2017 Actuarially Determined Contribution 3,297,320 Contributions in relation to the Actuarially Determined Contributions 1,657,884 Contribution Deficiency (Excess) $ 1,639,436 Covered Employee Payroll % Contributions as a percentage of Covered Employee Payroll $ 16,889,001 Notes to Schedule Actuarially determined contribution rates shown above are calculated as of October 1, 2016 for the plan/fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates are the same as those found in Section 8, starting on page 19 of this report. The only exception is that an investment return rate of 6.0% was used for funding valuation purposes. Page 23 of F oster & Foster

24 SECTION 4 GASB 75 Expense COMPONENTS OF OPEB EXPENSE Fiscal Year Ending September 30, 2017 Net OPEB Liability Deferred Inflows Deferred Outflows OPEB Expense Beginning balance $ 65,445,770 $ - $ - $ - Total OPEB Liability Factors: Service Cost 1,097, ,097,474 Interest 2,062, ,062,341 Changes in benefit terms Differences between Expected and Actual Experience with regard to economic or demographic assumptions Current year amortization of experience difference Change in assumptions about future economic or demographic factors or other inputs (5,423,507) 5,423, Current year amortization of change in assumptions (1,084,701) - (1,084,701) Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Net change $ (4,713,834) $ 4,338,806 $ - $ 2,075,114 Plan Fiduciary Net Position: Explicit Contributions - Employer 1,657, Implicit Contributions - Employer 566, Explicit Contributions - Employee 443, (443,463) Net Investment Income 284, (284,346) Difference between projected and actual earnings on OPEB Plan investments (20,464) - 20,464 - Current year amortization - - (4,093) 4,093 Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Administrative Expenses (23,689) ,689 Other Net change 457,460-16,371 (700,027) Ending Balance $ 60,274,476 $ 4,338,806 $ 16,371 $ 1,375,087 Page 24 of F oster & Foster

25 SECTION 5 GASB 75 Amortization Schedules SECTION 4 GASB 75 AMORTIZATION SCHEDULES AMORTIZATION SCHEDULE DUE TO RECOGNITION OF THE DIFFERENCES BETWEEN PROJECTED AND ACTUAL EARNINGS ON TRUST INVESTMENTS Differences Between Expected Year and Actual Experience* Recognition Period (Years) Recognitio $ 20,464 5 $ 4,093 $ 4,093 $ 4,093 $ 4,093 $ 4,092 $ - $ - $ - $ - $ Net Increase (Decrease) in OPEB Expense $ 4,093 $ 4,093 $ 4,093 $ 4,093 $ 4,092 $ - $ - $ - $ - $ - Page 25 of F oster & Foster

26 SECTION 5 GASB 75 Amortization Schedules AMORTIZATION SCHEDULE DUE TO RECOGNITION OF THE EFFECTS OF ASSUMPTION CHANGES Differences Between Expected Year and Actual Experience* Recognition Period (Years) Recognitio $ (5,423,507) 5 $ (1,084,701) $ (1,084,701) $ (1,084,701) $ (1,084,701) $ (1,084,703) $ - $ - $ - $ - $ Net Increase (Decrease) in OPEB Expense $ (1,084,701) $ (1,084,701) $ (1,084,701) $ (1,084,701) $ (1,084,703) $ - $ - $ - $ - $ - Page 26 of F oster & Foster

27 SECTION 5 GASB 75 Amortization Schedules AMORTIZATION SCHEDULE DUE TO DIFFERENCES BETWEEN EXPECTED AND ACTUAL EXPERIENCE Differences Between Expected Year and Actual Experience* Recognition Period (Years) Recognitio $ - 5 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Net Increase (Decrease) in OPEB Expense $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Page 27 of F oster & Foster

28 SECTION 7 Member Statistics SECTION 6 - PER CAPITA CLAIMS COSTS AND CONTRIBUTION AMOUNTS Per Capita Annual Claims Costs Per Participant Program Pre 65 Cost Post 65 Cost Health Insurance $13,408 $4,812 Dental Insurance $375 $ Annual Premium Amounts Program Pre 65 Cost Post 65 Cost Health Insurance - Retiree Health Insurance - Spouse $6,111 Age Based Table (See Below) $8,402 Age Based Table (See Below) Dental Insurance $375 $375 Age Retiree Premium Spouse Premium $4,381 $4, $4,688 $4, $4,942 $4, $5,221 $5,221 Page 28 of F oster & Foster

29 SECTION 7 Member Statistics SECTION 7 - MEMBER STATISTICS STATISTICAL DATA 10/1/2016 Number of Active Participants Eligible for Retiree Health Benefits 100 Not Yet Eligible for Retiree Health benefits 296 Total 396 Average Current Age 43.7 Average Age at Employment 34.9 Average Past Service 8.8 Covered Payroll $ 16,889,001 Average Salary 42,649 Number of Inactives Receiving Medical Benefits Retirees, Beneficiaries, and Disabled Members 285 Dependent Spouses 28 Total 313 Average Current Age of Inactives 66.3 Page 29 of F oster & Foster

30 SECTION 7 Member Statistics AGE AND SERVICE DISTRIBUTION TOTAL PAST SERVICE AGE Total < Total Page 30 of F oster & Foster

31 SECTION 8 - Actuarial Assumptions and Funding Methods SECTION 8 - ACTUARIAL ASSUMPTIONS AND FUNDING METHODS Actuarial Assumptions Valuation Date October 1, 2016 Measurement Date GASB 75 September 30, Reporting Period Fiscal Year End September 30, Actuarial Value of Assets Mortality Rate General Pension Plan Employees Market Value. Healthy Lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB. Disabled Lives: Female: 100% RP2000 Disabled Female set forward two years Male: 100% RP2000 Disabled Male setback four years. Police & Fire Pension Plan Employees Healthy Lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB Male: RP2000 Generational, 10% Annuitant White Collar / 90% Annuitant Blue Collar, Scale BB. Disabled Lives: Female: 60% RP2000 Disabled Female set forward two years / 40% Annuitant White Collar with no setback, no projection scale Male: 60% RP2000 Disabled Male setback four years / 40% Annuitant White Collar with no setback, no projection scale. Discount Rate as of 9/30/ %. Based on the September 28, 2017 Bond Buyer 20-Bond Index, as published by the Federal Reserve. 19 F oster & Foster Page 31 of 62

32 SECTION 8 - Actuarial Assumptions and Funding Methods Actuarial Assumptions (continued) Discount Rate as of 9/30/16 Assumed Investment Return Retirement Rates General Pension Plan Employees 3.06%. Based on the September 29, 2016 Bond Buyer 20-Bond Index, as published by the Federal Reserve. 7.00% per year, net of investment expenses. Disabled employees retire immediately upon completion of at least 10 years of service. Those with at least 10 years of service as of August 26, 2013: Earlier of: 1) age 58 and 7.5 years of service or 2) 28 years of service, regardless of age. Those with less than 10 years of service as of August 26, 2013: Earlier of: 1) age 62 and 10 years of service or 2) 30 years of service, regardless of age. Police & Fire Pension Plan Employees Service-incurred disabled employees retire immediately, while non-duty related disabled employees retire immediately upon completion of at least 10 years of service. Those with at least 10 years of Service as of June 1, 2013: Earlier of age 55 and 8 years of service or 25 years of service, regardless of age. Those with less than 10 years of service as of June 1, 2013: Earlier of age 55 and 10 years of service or age 52 with 25 years of service. Early Retirement Rates General Pension Plan Employees. Commencing at eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5% per year. 20 F oster & Foster Page 32 of 62

33 SECTION 8 - Actuarial Assumptions and Funding Methods Actuarial Assumptions (continued) Police & Fire Pension Plan Employees Commencing at eligibility for Early Retirement (age 50 with 10 years of service), Members are assumed to retire with an immediate benefit at the rate of 5% per year. The assumption is 2% per year for Members who have at least 10 years of service on June 1, Termination Rates Sample rates below (modified T-3 for General Employees; modified T-5 for Police & Fire Employees): Age General Rates Police & Fire Rates % 9.4% % 8.7% % 6.7% % 4.1% % 3.4% Disability Rates Sample rates below (D1202 for General Employees; D1205 for Fire and Police Employees). 75% of disabilities are assumed to be in-line-of-duty: Age General Rates Police & Fire Rates % 0.140% % 0.190% % 0.320% % 1.100% % 1.310% Payroll Growth Inflation Salary Increase Health Care Participation DROP Participation Life Insurance Participation 1.50% per year. 2.50% per year. 6.00% per year. 80% participation assumed, with 10% electing spouse coverage. 50% participation assumed. 40% participation assumed. 21 F oster & Foster Page 33 of 62

34 SECTION 8 - Actuarial Assumptions and Funding Methods Actuarial Assumptions (continued) Health Care Inflation Pre-65 Initial rate of 8.75% in fiscal 2017, then 8.50% in fiscal 2018, grading down to the ultimate trend rate of 4.00% in fiscal See rates below: Fiscal Year Rate % % % % % % % % % % % % % % % % % Health Care Inflation Post-65 Dental Care Inflation 4% per year. 5% each year. Medical Aging Factors 4% per year prior to age 65; 3% per year between ages 65 and 75; 2% per year between ages 75 and 85; 0% per year thereafter. Dental Aging Factors Medical Claims Dental and Life Claims Costs are assumed to remain constant over all ages. Developed using a blend of updated manual rates and active fully insured rates for Pre-Medicare costs. The updated manual rating tool includes more recent claims data from which to develop expected Pre- Medicare costs, and higher expected discounts from providers in-network than used in prior valuations. Projected Medicare Supplement premiums offered by AETNA Life Insurance Company and CIGNA Health and Life Insurance Company are assumed to cover the entire cost of Post-Medicare claims. Premiums are assumed to cover the entire cost of the claims. 22 F oster & Foster Page 34 of 62

35 SECTION 8 - Actuarial Assumptions and Funding Methods Funding Method Entry Age Cost Method (Level Percentage of Pay) 23 F oster & Foster Page 35 of 62

36 SECTION 8 - Actuarial Assumptions and Funding Methods DISCUSSION OF CENSUS DATA AND ASSUMPTIONS 1. Census Data We received October 1, 2016 census data from City personnel. We did not perform an audit of the data. We did review the information provided for consistency and reasonableness. 2. Medical Cost and Enrollment Data The City of Titusville provided medical and dental cost information for fiscal year 2017 and medical cost information only for fiscal year Enrollment data was provided in the census data and used to determine costs for future retirees as discussed in Sections 6 and 8 of this report. 3. Asset Information The City of Titusville provided the asset statement for the year ending September 30, 2017 and draft 2017 OPEB trust financial statement exhibits. The market value of assets as of October 1, 2016 and other supporting information was extracted from the City s Comprehensive Annual Financial Review for the Fiscal Year ending September 30, Actuarial Assumptions and Methods a. Demographic Assumptions i. Mortality rates were changed to be consistent with mortality rates used for the pension valuations. The mortality rates were mandated by Chapter , Florida Statutes for pension plans. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The rates are those outlined in Milliman s July 1, 2015 FRS valuation report. We feel this assumption sufficiently accommodates future mortality improvements. ii. Retirement rates, disability rates and termination rates are the same as the prior valuation. iii. Participation rates and spousal coverage election percentages are deemed reasonable based on current data and will continue to be monitored. iv. The remaining demographic assumptions are the same as the prior valuation. Page 36 of 62 b. Other Assumptions i. Health care inflation rates have been updated to reflect recent healthcare trend rate surveys, blended with the long-term rates from the Getzen model published by the Society of Actuaries. Post-65, healthcare inflation is assumed to be a flat 4.0%. ii. The discount rate as of the measurement date used has been updated to utilize the 24 Foster & Foster

37 SECTION 8 - Actuarial Assumptions and Funding Methods mandated discount rate based on the 20-year Municipal Bond Rate as of the measurement date, as required under GASB 75. iii. The salary increase rates are the same as the prior valuation. iv. The payroll growth rate remains the same as the prior year based on the rates developed for the corresponding pension valuations. c. Cost Method - The valuation results were calculated using the Entry Age cost method. This is the required cost method under the GASB 74/75 standards. Page 37 of F oster & Foster

38 SECTION 9 Summary of Plan Provisions SECTION 9 - SUMMARY OF PLAN PROVISIONS Credited Service Total completed years of employment with the City. 1. Retired prior to the Effective Date of Benefit Changes (December 2013 for service workers represented by LIUNA, April 2014 for Fire employees and Non-represented employees, June 2014 for Police Employees). City Benefits remain the same as when an employee retired with no cap. Eligibility for Insurance Coverage General Pension Plan Employees Police & Fire Pension Plan Employees Health and Dental Care Contributions General Employees Hired Prior to 10/1/2003 Age 48 to 53 at retirement or disability At least age 53 at retirement or disability or 28 years of service, regardless of age Less than age 48 at disability retirement Age 58 and 7.5 years of service or 28 years of service is normal retirement. Employees may retire early at age 48 and 7.5 years of service. Disabled employees with at least 10 years of service are also eligible for coverage. Age 55 and 8 years of service or 25 years of service, regardless of age, is normal retirement. Employees may retire early at age 50 and 10 years of service. Serviceincurred disabled employees may retire immediately, while non-duty related disabled employees may retire upon completion of 10 years of service. City pays 75% of the active premium rate or the Medicare Supplement premium rate. Retiree pays the remainder of the premium. City pays 100% of the active premium rate or the Medicare Supplement premium rate. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. 26 F oster & Foster Page 38 of 62

39 SECTION 9 Summary of Plan Provisions (Continued) Health and Dental Care Contributions General Employees Hired After 10/1/2003 Age 48 at retirement or 28 years of service, regardless of age Disability retirement City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. This subsidy is reduced by 3% for each year retirement precedes normal retirement. Retiree pays the remainder of the premium. Police & Fire Employees Hired Prior to 10/1/2003 Age 55 at retirement or disability or 25 years of service, regardless of age City pays 100% of the active premium rate or the Medicare Supplement premium rate. Age 50 at retirement or disability Less than age 50 with at least 10 years of service at disability retirement Less than 10 years of service at disability City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. Retiree pays 100% of the active or Medicare Supplement premium rate. 27 F oster & Foster Page 39 of 62

40 SECTION 9 Summary of Plan Provisions (Continued) Health and Dental Care Contributions Police & Fire Employees Hired After 10/1/2003 Age 50 at retirement or disability or 25 years of service, regardless of age City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. Less than age 50 with at least 10 years of service at disability retirement Less than 10 years of service at disability City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. This subsidy is reduced by 3% for each year retirement precedes normal retirement. Retiree pays the remainder of the premium. Retiree pays 100% of the active or Medicare Supplement premium rate. Note that retirees may purchase spouse coverage at their own expense at the active or Medicare Supplement premium rates based on the spouse s age. Page 40 of F oster & Foster

41 SECTION 9 Summary of Plan Provisions (Continued) 2. Retired on or after the Effective Date of Benefit Changes (December 2013 for service workers represented by LIUNA, April 2014 for Fire employees and Non-represented employees, June 2014 for Police Employees). City Benefit is generally greater of 50% of active premium or $8 per month times years of service, but not more than $500 per month. All persons retiring on or after the Effective Dates of Benefit Changes, whether hired before or after October 1, 2003, must pay the entire cost of the dental plan premium. Eligibility for Insurance Coverage General Pension Plan Employees Those with at least 10 years of service as of August 26, 2013: Age 58 and 7.5 years of service or 28 years of service is normal retirement. Employees may retire early at age 48 and 7.5 years of service. Disabled employees with at least 10 years of service are also eligible for coverage. Those with less than 10 years of service as of August 26, 2013: Age 62 & 10 years of service or 30 years of service is normal retirement. Employees may retire early at age 52 and 10 years of service. Disabled employees with at least 10 years of service are also eligible for coverage Police & Fire Pension Plan Employees Those with at least 10 years of service as of June 1, 2013: Age 55 and 8 years of service or 25 years of service, regardless of age, is normal retirement. Employees may retire early at age 50 and 10 years of service. Serviceincurred disabled employees may retire immediately, while non-duty related disabled employees may retire upon completion of 10 years of service. 29 F oster & Foster Page 41 of 62

42 SECTION 9 Summary of Plan Provisions (Continued) Eligibility for Insurance Coverage Police & Fire Pension Plan Employees Those with less than 10 years of service as of June 1, 2013: Age 55 and 10 years of service or age 52 and 25 years of service is normal retirement. Employees may retire early at age 50 and 10 years of service. Service-incurred disabled employees may retire immediately, while non-duty related disabled employees may retire upon completion of 10 years of service. Health Contributions (No Dental) General Employees Hired Prior to 10/1/2003 {Those with at least 10 years of service as of August 26, 2013} Age 48 to 53 at retirement or disability At least age 53 at retirement or disability or 28 years of service, regardless of age Less than age 48 at disability retirement City pays maximum of 50% of the active premium rate or the Medicare Supplement premium rate or $8 per year of service, up to a maximum of $500 per month. Retiree pays the remainder of the premium. City pays maximum of 50% of the active premium rate or the Medicare Supplement premium rate or $8 per year of service, up to a maximum of $500 per month. Retiree pays the remainder of the premium. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. 30 F oster & Foster Page 42 of 62

43 SECTION 9 Summary of Plan Provisions (Continued) Health Contributions (No Dental) General Employees Hired After 10/1/2003 {Those with less than 10 years of service as of August 26, 2013} Age 52 at retirement or 30 years of service, regardless of age Disability retirement City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. This subsidy is reduced by 3% for each year retirement precedes normal retirement. Retiree pays the remainder of the premium. Health Contributions (No Dental) Police & Fire Employees Hired Prior to 10/1/2003 {Those with at least 10 years of service as of June 1, 2013} Age 55 at retirement or disability or 25 years of service, regardless of age City pays maximum of 50% of the active premium rate or the Medicare Supplement premium rate or $8 per year of service, up to a maximum of $500 per month. Retiree pays the remainder of the premium. Age 50 at retirement or disability Less than age 50 with at least 10 years of service at disability retirement City pays maximum of 50% of the active premium rate or the Medicare Supplement premium rate or $8 per year of service, up to a maximum of $500 per month. Retiree pays the remainder of the premium. City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. 31 F oster & Foster Page 43 of 62

44 SECTION 9 Summary of Plan Provisions (Continued) Health Contributions (No Dental) Police & Fire Employees Hired Prior to 10/1/2003 {Those with at least 10 years of service as of June 1, 2013} Less than 10 years of service at disability Retiree pays 100% of the active or Medicare Supplement premium rate. Health Contributions (No Dental) Police & Fire Employees Hired After 10/1/2003 {Those with less than 10 years of service as of June 1, 2013} Age 50 at retirement or disability, or 52 and 25 years of service City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. Retiree pays the remainder of the premium. Less than age 50 with at least 10 years of service at disability retirement Less than 10 years of service at disability City pays $8 per year of service up to a maximum of $200 per month toward the active or Medicare Supplement premium rate. This subsidy is reduced by 3% for each year retirement precedes normal retirement. Retiree pays the remainder of the premium. Retiree pays 100% of the active or Medicare Supplement premium rate. Note that for purposes of the valuation, the dates for eligibility determination for General and Police & Fire (August 26, 2013 and June 1, 2013, respectively) in which 10 years of service is required are assumed to be approximately the same criteria as if a person had 10 years of service as of October 1, 2013 (i.e. if hired prior to October 1, 2003 the date used to determine the City subsidy amounts). There could certainly be scenarios for which this assumption would be invalid. For example, if an employee was hired prior to October 1, 2003 but after August 26, In this case, they would have less than 10 years of service for purposes of eligibility as of August 26, 2013, but would meet the criteria for benefits based on their date of hire prior to October 1, Note that retirees may purchase spouse coverage at their own expense at the active or Medicare Supplement premium rates based on the spouse s age. Page 44 of F oster & Foster

45 SECTION 9 Summary of Plan Provisions (Continued) Life Insurance (All retirees) Coverage Amount Increments of $1,000 up to $10,000. Employee Cost Retiree pays 100% of the retiree premium rate. City Cost $0. 33 F oster & Foster Page 45 of 62

46 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 APPENDIX 1 GASB 74 DISCLOSURES FOR PLAN YEAR 2017 ASSETS MARKET VALUE Cash and Short-Term Investments 35,631 Total Receivable 0 Investments: Money Market 42,592 Mutual Fund - Bonds 746,399 Mutual Fund - Equity 1,702,206 Total Investments 2,491,197 Total Assets 2,526,828 LIABILITIES Payables: 0 Total Liabilities 0 NET POSITION RESTRICTED FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS 2,526,828 Page 46 of F oster & Foster

47 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017 Market Value Basis ADDITIONS Contributions: Employer Contributions 1,657,884 Employee Contributions 443,463 Total Contributions 2,101,347 Investment Income: Net Increase in Fair Value of Investments 215,579 Interest & Dividends 48,303 Net Investment Income 263,882 Other Income 0 Total Additions 2,365,229 DEDUCTIONS Health Insurance Benefits 1,884,080 Total Distributions 1,884,080 Administrative Expense 23,689 Total Deductions 1,907,769 Net Increase in Net Position 457,460 NET POSITION RESTRICTED FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Beginning of the Year 2,069,368 End of the Year 2,526,828 Page 47 of F oster & Foster

48 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 General Information about the OPEB Plan Plan Description The City of Titusville s Retiree Health Care Plan (Plan) is a single-employer defined benefit postemployment health care plan that covers eligible retired employees. The Plan, which is administered by the City, allows employees who retire and meet retirement eligibility requirements under one of the City s retirement plans to continue medical and dental coverage as a participant in the City s plan. Employees covered by benefit terms. At October 1, 2016, the following employees were covered by the benefit terms: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 313 Inactive Plan Members Entitled to But Not Yet Receiving Benefits - Active Plan Members Benefits Provided The benefits provided are the same as those provided for active employees. Spouses and dependents of eligible retirees are also eligible for medical coverage. All employees of the City of Titusville are eligible to receive postemployment health care benefits. Coverage for retirees and their spouses and dependents is provided for the life of the retiree. The Trust was established to advance fund benefits provided under the Plan. Investment Policy: The following was the Board s adopted asset allocation policy as of September 30, Asset Class Target Allocation Actual Allocation Domestic Equity 42% 45% International Equity 23% 23% Fixed Income 35% 30% Cash Equivalent 0% 2% Total 100% 100% Page 48 of F oster & Foster

49 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 Contributions The City of Titusville adopted health-related benefit changes during 2013 with effective dates varying by employee class (December 2013 for service workers represented by LIUNA, April 2014 for Fire and Nonrepresented employees, and June 2014 for Police employees). For employees who retire after the effective dates listed above, the City of Titusville will contribute the greater of 50% of the active health premium or $8/month for every year of service for retirees participating in the City s group insurance plans. This benefit is capped at $500 a month. For retirees who were hired after 10/1/2003, the City provides a credit of $8/month for every year of service, up to a maximum of $200/month, toward the premium of the City s group insurance plans. The retiree is responsible for 100% of the costs of dental coverage. For all retirements prior to the effective dates listed above, the City of Titusville will continue to contribute a portion (either 75% or 100%) of the active health and dental premiums for retirees participating in the City s group insurance plans who were hired prior to 10/1/2003. The City s subsidy is no longer capped for these retirees, per the City Council s decision to rescind the cap at its May 9, 2017 meeting. For retirees who were hired after 10/1/2003, the City provides a credit of $8/month for every year of service, up to a maximum of $200/month, toward the premium of the City s group insurance plans. Retirees may purchase spouse coverage through the City s group insurance plans at their own expense. An employer-provided implicit subsidy for the health plan will still exist even for those participants receiving 50%, 75% or 100% of the premium paid by the City. In future years, contributions are assumed to increase at the same rate as premiums. Note that the projected premiums for the dental benefit are assumed to cover the entire cost of the program. Concentrations: The Plan did not hold investments in any one organization that represent 5 percent or more of the Fund's Fiduciary Net Position. Rate of Return: Page 49 of 62 For the year ended September 30, 2017 the annual money-weighted rate of return on investments, net of investment expense, was percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. Receivables If the OPEB plan reported receivables from long-term contracts with the City for contributions, the OPEB plan should disclose information required by paragraph 34c of this Statement. Allocated Insurance Contracts If the OPEB plan had allocated insurance contracts that are excluded from OPEB plan assets, the OPEB plan should disclose information required by paragraph 34d of this Statement. 37 F oster & Foster

50 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 Page 50 of 62 Net OPEB Liability The measurement date for GASB 75 reporting is September 30, The measurement period for the OPEB expense was October 1, 2016 to September 30, The reporting period is October 1, 2016 through September 30, The Sponsor s Net OPEB Liability was measured as of September 30, The Total OPEB Liability used to calculate the Net OPEB Liability was determined as of that date. Note - The Sponsor s Net OPEB Liability for the City of Titusville s ledger adjustment was measured as of September 30, 2016 using a discount rate of 3.06%. The Total OPEB Liability was rolled-forward from September 30, 2016 at 3.06%, thus producing no experience gain or loss for the period ending September 30, The components of the Net OPEB Liability of the Sponsor on September 30, 2017 were as follows: Total OPEB Liability $ 62,801,304 Plan Fiduciary Net Position $ (2,526,828) Sponsor's Net OPEB Liability $ 60,274,476 Plan Fiduciary Net Position as a percentage of the Total OPEB Liability 4.02% Actuarial Assumptions: The Total OPEB Liability was determined by an actuarial valuation as of October 1, 2016 using the following actuarial assumptions: Inflation 2.50% Salary Increases 6.00% Discount Rate 3.64% Investment Rate of Return 7.00% Healthcare cost trend rates 4.00% % For general employees, mortality rates were based on the RP-2000 mortality tables. For female lives, 100% of the white collar table was used. For male lives, a 50% white collar table, 50% blue collar table blend was used. All tables include fully generational adjustments for mortality improvements using improvement scale BB. For disabled lives, mortality rates were based on the RP-2000 sex-distinct disabled mortality tables with female lives set forward two (2) years, male lives set back four (4) years. Disabled mortality has not been adjusted for mortality improvements. For police and fire employees, mortality rates were also based on various RP-2000 mortality tables. For female lives, 100% of the white-collar table was used. For male lives, a 10% white collar table, 90% blue collar table blend was used. All tables include fully generational adjustments for mortality improvements using improvement scale BB. For disabled female lives, a blend of 60% of the RP-2000 disabled female mortality table set forward two (2) years and 40% of the white-collar table with no setback was used. For disabled male lives, a blend of 60% of the RP-2000 disabled male mortality table set back four (4) year and 40% of the white-collar table with no setback was used. Disabled mortality has not been adjusted for mortality improvements. 38 F oster & Foster

51 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 Actuarial Assumptions (Continued): The long-term expected rate of return on OPEB Plan investments was determined using. [The City of Titusville to provide description from investment advisor] The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Actual Allocation Long Term Expected Real Rate of Return Domestic Equity 42% 45% 7.50% International Equity 23% 23% 8.50% Fixed Income 35% 30% 2.50% Cash Equivalent 0% 2% 0.00% Total 100% 100% Asset Class allocations were provided to us by the City. Long term expected real rates of return by asset class match those used in the pension valuation for the respective asset classes. Discount Rate: The City contributes a portion of the ARC to the fund annually, but otherwise funds benefits on a pay-as-you-go basis. The expected rate of return on trust investments is 7.00%. This rate was used to discount projected benefit payments for 0 years at which point the trust will become insolvent. The remaining projected benefit payments were discounted at a municipal bond rate. The high quality municipal bond rate, 3.64%, was based on the week closest but not later than the measurement date of the Bond Buyer 20-Bond Index as published by the Federal Reserve. The 20- Bond Index consists of 20 general obligation bonds that mature in 20 years. The average rating of the 20 bonds is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard & Poor's Corp.'s AA. 39 F oster & Foster Page 51 of 62

52 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 Sensitivity of the Net OPEB Liability to changes in the Discount Rate as of September 30, 2017: The following presents the Net OPEB Liability of the Sponsor, as well as what the Sponsor s Net OPEB Liability would be if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current discount rate: Current 1% Decrease Discount Rate 1% Increase 2.64% 3.64% 4.64% Net OPEB Liability (asset) $ 70,101,016 $ 60,274,476 $ 52,408,711 Sensitivity of the Net OPEB Liability to changes in the Healthcare Cost Trend Rates as of September 30, 2017: The following presents the Net OPEB Liability of the Sponsor, as well as what the Sponsor s Net OPEB Liability would be if it were calculated using healthcare cost trend rates that are one percentage-point lower or one percentage-point higher than the current healthcare cost trend rates: 1% Decrease Healthcare Cost Trend Rates 1% Increase 3.00% % 4.00% % 5.00% % Net OPEB Liability (asset) $ 52,775,437 $ 60,274,476 $ 69,317,563 Page 52 of F oster & Foster

53 APPENDIX 1 GASB 74 Disclosure for Plan Year /30/2017 Total OPEB Liability Service Cost $ 1,097,474 Interest 2,062,341 Changes of benefit terms - Differences between Expected and Actual Experience - Changes of assumptions (5,423,507) Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Net Change in Total OPEB Liability (4,713,834) Total OPEB Liability - Beginning 67,515,138 Total OPEB Liability - Ending (a) $ 62,801,304 Plan Fiduciary Net Position Explicit Contributions - Employer $ 1,657,884 Implicit Contributions - Employer 566,062 Explicit Contributions - Employee 443,463 Net Investment Income 263,882 Explicit Benefit Payments (1,884,080) Implicit Benefit Payments (566,062) Other Income - Administrative Expense (23,689) Net Change in Plan Fiduciary Net Position 457,460 Plan Fiduciary Net Position - Beginning 2,069,368 Plan Fiduciary Net Position - Ending (b) $ 2,526,828 Sponsor's Net OPEB Liability - Ending (a) - (b) $ 60,274,476 Plan Fiduciary Net Position as a percentage of the Total OPEB Liability 4.02% Covered Employee Payroll $ 16,889,001 Sponsor's Net OPEB Liability as a percentage of Covered Employee Payroll % Page 53 of F oster & Foster

54 APPENDIX 1 GASB 74 Disclosure for Plan Year 2017 SCHEDULE OF SPONSOR CONTRIBUTIONS 09/30/2017 Actuarially Determined Contribution 3,297,320 Contributions in relation to the Actuarially Determined Contributions 1,657,884 Contribution Deficiency (Excess) $ 1,639,436 Covered Employee Payroll % Contributions as a percentage of Covered Employee Payroll $ 16,889,001 Notes to Schedule Actuarially determined contribution rates shown above are calculated as of October 1, 2016 for the plan/fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates are the same as those found in Section 8, starting on page 19 of this report. The only exception is that an investment return rate of 6.0% was used for funding valuation purposes Page 54 of F oster & Foster

55 APPENDIX 2 GASB 74 Crossover Test APPENDIX 2 GASB 74/75 CROSSOVER TEST Projected Beginning Fiduciary Net Position Projected Administrative Expense Projected Investment Earnings Projected Ending Fiduciary Net Position Projected Total Projected Benefit Year Contributions Payments ,069, ,450,142 24,434 58,246 (346,962) 2017 (346,962) 0 2,587,106 23,492 (115,658) (3,073,219) 2018 (3,073,219) 0 2,691,642 22,844 (310,132) (6,097,837) 2019 (6,097,837) 0 2,852,974 22,326 (527,484) (9,500,621) 2020 (9,500,621) 0 3,023,715 21,874 (771,639) (13,317,849) 2021 (13,317,849) 0 3,125,232 21,538 (1,042,386) (17,507,005) 2022 (17,507,005) 0 3,247,715 21,266 (1,339,905) (22,115,891) 2023 (22,115,891) 0 3,270,652 21,022 (1,663,321) (27,070,886) 2024 (27,070,886) 0 3,405,859 20,856 (2,014,897) (32,512,498) 2025 (32,512,498) 0 3,433,603 20,638 (2,396,773) (38,363,512) 2026 (38,363,512) 0 3,524,222 20,505 (2,809,511) (44,717,751) 2027 (44,717,751) 0 3,491,357 20,346 (3,253,152) (51,482,606) 2028 (51,482,606) 0 3,462,989 20,284 (3,725,697) (58,691,576) 2029 (58,691,576) 0 3,546,471 20,122 (4,233,241) (66,491,411) 2030 (66,491,411) 0 3,613,037 20,012 (4,781,555) (74,906,016) 2031 (74,906,016) 0 3,603,851 19,878 (5,370,252) (83,899,996) 2032 (83,899,996) 0 3,596,666 19,745 (5,999,574) (93,515,981) 2033 (93,515,981) 0 3,647,175 19,557 (6,674,454) (103,857,167) 2034 (103,857,167) 0 3,723,534 19,370 (7,401,003) (115,001,074) 2035 (115,001,074) 0 3,685,837 19,154 (8,179,750) (126,885,816) 2036 (126,885,816) 0 3,539,574 18,971 (9,006,556) (139,450,917) 2037 (139,450,917) 0 3,467,799 18,695 (9,883,592) (152,821,003) 2038 (152,821,003) 0 3,468,848 18,385 (10,819,523) (167,127,760) 2039 (167,127,760) 0 3,394,942 18,075 (11,818,399) (182,359,175) 2040 (182,359,175) 0 3,352,841 17,764 (12,883,113) (198,612,894) 2041 (198,612,894) 0 3,320,872 17,455 (14,019,744) (215,970,965) 2042 (215,970,965) 0 3,234,432 17,037 (15,231,769) (234,454,203) 2043 (234,454,203) 0 3,128,317 16,655 (16,521,868) (254,121,043) 2044 (254,121,043) 0 3,079,793 16,195 (17,896,833) (275,113,864) 2045 (275,113,864) 0 2,977,997 15,816 (19,362,754) (297,470,430) 2046 (297,470,430) 0 2,884,613 15,272 (20,924,426) (321,294,742) 2047 (321,294,742) 0 2,772,596 14,813 (22,588,191) (346,670,342) 2048 (346,670,342) 0 2,673,813 14,267 (24,361,007) (373,719,428) 2049 (373,719,428) 0 2,533,388 13,814 (26,249,512) (402,516,143) 2050 (402,516,143) 0 2,354,759 13,274 (28,259,011) (433,143,186) 2051 (433,143,186) 0 2,199,496 12,639 (30,397,448) (465,752,769) 2052 (465,752,769) 0 2,032,984 12,107 (32,674,272) (500,472,132) Page 55 of F oster & Foster

56 APPENDIX 2 GASB 74 Crossover Test Projected Beginning Fiduciary Net Position Projected Administrative Expense Projected Investment Earnings Projected Ending Fiduciary Net Position Projected Total Projected Benefit Year Contributions Payments 2053 (500,472,132) 0 1,910,696 11,478 (35,100,325) (537,494,632) 2054 (537,494,632) 0 1,760,999 10,909 (37,686,641) (576,953,181) 2055 (576,953,181) 0 1,648,182 10,295 (40,444,769) (619,056,428) 2056 (619,056,428) 0 1,515,009 9,692 (43,387,314) (663,968,443) 2057 (663,968,443) 0 1,377,277 9,161 (46,526,316) (711,881,197) 2058 (711,881,197) 0 1,276,988 8,528 (49,876,677) (763,043,391) 2059 (763,043,391) 0 1,168,230 7,974 (53,454,204) (817,673,799) 2060 (817,673,799) 0 1,073,741 7,444 (57,275,007) (876,029,991) 2061 (876,029,991) 0 987,962 6,940 (61,356,921) (938,381,814) 2062 (938,381,814) 0 906,666 6,467 (65,718,687) (1,005,013,634) 2063 (1,005,013,634) 0 833,559 5,960 (70,380,338) (1,076,233,490) 2064 (1,076,233,490) 0 762,938 5,489 (75,363,239) (1,152,365,157) 2065 (1,152,365,157) 0 698,043 4,984 (80,690,167) (1,233,758,350) Page 56 of F oster & Foster

57 usville eviously Reported GASB 74/75 Liability Total OPEB Liabilities minary Results Previously Communicated million ssumptions: iscount Rate ity Rates of October 1, 2016 Pension Valuations er 1, 2015 valuation data rolled forward to October 1, 2016 er assumptions as disclosed in October 1, 2015 Actuarial Valuation Report Page 57 of 62

58 usville Preliminary Changes and Impacts on GASB 74/75 Total OPEB Liability Increase/(Decrease) ges in Census Data 1 ted Claims Costs and Premiums 2 ted Trend Rate Assumption 3 unt Rate Decreased from 4.00% to 3.06% 4 l Preliminary Changes (68 thousand) 2.64 million (18.03 million) 8.51 million (6.94 million) e census data reflects changes in the census information the twelve month (12) period since October 1, The relatively small magnitude of this change flects the overall stability of population being valued. t Claim Costs were higher than expected. The implicit rate subsidy, which is a benefit provided to older members implicitly by allowing them to participate the group plan, increased because of the claims experience. Premiums were lower than expected, causing another increase in the implicit rate subsidy. ese increases were offset by the impact of lower premiums on the explicit subsidy offered to retirees with no cap on their benefits. alth care inflation rates for post-65 members were changed to be a flat 4% inflation rate. This change was made to reflect lower post-65 premium perience relative to national trends and Titusville's pre-65 premium experience. e decrease in the single discount rate is a direct result of the new GASB 74/75 prescribed implementation methodology for calculating the Total OPEB ability beginning balance in the first year. The discount rate used is based on the September 29, 2016 Bond Buyer 20-Bond Index, as published by the deral Reserve. ssumptions: Discount Rate ity Rates of October 1, 2016 Pension Valuations er 1, 2016 valuation data er assumptions as disclosed in October 1, 2015 Actuarial Valuation Report Page 58 of 62

59 usville econciliation of Reported GASB 74/75 Total OPEB Liabilities Total OPEB Liabilities minary Results Previously Communicated tal Preliminary Changes (1 4) million (6.94 million) 74/75 Total OPEB Liability Beginning Balance million scount Rate Increased from 3.06% to 3.64% 5 ability Rolled Forward to September 30, (5.42 million) 0.70 million 74/75 Total OPEB Liability Ending Balance million e increase in the single discount rate is a direct result of the new GASB 74/75 prescribed methodology for calculating the Total OPEB Liability ending lance. The discount rate used is based on the September 28, 2017 Bond Buyer 20-Bond Index, as published by the Federal Reserve. sults Prior to this change were all as of October 1, For reporting purposes, the Total OPEB Liability was "rolled forward" to the end of the year by ding service cost, adding interest, and subtracting benefit payments disbursed both explicitly and implicitly. ssumptions: Discount Rate ity Rates of October 1, 2016 Pension Valuations er 1, 2016 valuation data er assumptions as disclosed in September 30, 2017 GASB 74/75 Actuarial Valuation Report Page 59 of 62

60 Category: 4. Item: E. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: Subject: The Honorable Mayor and City Council William S. Larese, City Manager FY 2017 City Comprehensive Financial Audit Report (CAFR) Department/Office: Support Services Recommended Action: Acknowledge receipt of the FY 2017 annual audit of the City of Titusville as prepared by the accounting firm of James Moore, Certified Public Accountants and Consultants. Summary Explanation & Background: Zach Chalifour, with James Moore will present the "Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters", based on an audit of the City's FY 2017 Comprehensive Annual Financial Statements performed in accordance with Government Auditing Standards Board. Alternatives: Not Applicable Item Budgeted: NA Source/use of funds/budget Book Page: The City annual budget provides funding for accounting and auditing services. Strategic Plan: Strategic Plan Impact: Not Applicable ATTACHMENTS: Description Upload Date Type No Attachments Available Page 60 of 62

61 Category: 4. Item: F. City of Titusville "Gateway to Nature and Space" REPORT TO COUNCIL To: From: Subject: The Honorable Mayor and City Council William S. Larese, City Manager Letters of Appreciation Department/Office: City Manager Recommended Action: Attached is a list of employee names that received Letters of Appreciation. Summary Explanation & Background: N/A Alternatives: N/A Item Budgeted: NA Source/use of funds/budget Book Page: N/A Strategic Plan: Strategic Plan Impact: N/A ATTACHMENTS: Description Upload Date Type Letters of Appreciation 3/19/2018 Backup Material Page 61 of 62

62 MEMORANDUM TO: FROM: The Honorable Mayor and City Council Scott Larese, City Manager DATE: March 27, 2018 SUBJECT: Letters of Appreciation *Recognized more than once. Letters of appreciation received for the following employees: COMMUNITY DEVELOPMENT *Ford Tim Redevelopment Planner BUILDING DEPARTMENT Osorio Samantha Administrative Assistant NEIGHBORHOOD SERVICES Franklin Terrie Neighborhood Director Beradi Ibis Grants Manager ECONOMIC DEVELOPMENT McCall Edyie Economic Development Director Page 62 of 62 Letters of Appreciation Page 1 of 1