Anexo

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE AGENDA January 9, 2006 - 5:30 P.M. - Council Chambers - City Hall - City of Dover Public comments are welcomed on any item and will be permitted at appropriate times. When possible, please notify the City Clerk (736-7008 or e-m ail at Jgreen@dover.de.us) should you wish to be recognized. AGENDA ADDITIONS/DELETIONS 1. Pension Actuary Study 2. Actuarial Analysis of Post Retirement Benefits /jg S:\ClerksOffice\Agendas&Minutes\Committee-Agendas\DRAFTS\2006\01-09-2006 LF&A.wpd THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

Page 1 of 2 Prepared for: Legislative, Finance & Administration Committee Agenda Item: 1 - January 9, 2006 Meeting Prepared by: Donna Mitchell, Treasurer/Finance Director City of Dover Pension Actuarial Analysis Presentation General Employee Pension Fund Schedule of Funding Progress Adjusted Market Market Actuarial Unfunded Unfunded as a City and Valuation Value of Value of Accrued Accrued Funded Percent of Employee Date Plan Assets Plan Assets Liability Liability Ratio Payroll Payroll Contributions 7/1/1998 $ 18,792,809 18,792,809 $ 22,096,611 $ (3,303,802) 85.05% $ 6,592,117 50.12% $ 727,097 7/1/2000 22,095,632 22,095,632 27,497,493 $ (5,401,861) 80.36% 6,559,611 82.35% 700,927 7/1/2002 15,688,122 20,638,445 32,013,030 $ (11,374,585) 64.47% 6,774,554 167.90% 819,736 7/1/2003 14,446,848 19,133,025 36,131,839 $ (16,998,814) 52.95% 6,661,757 255.17% 1,179,095 7/1/2004 14,694,437 17,531,096 37,764,973 $ (20,233,877) 46.42% 7,320,938 276.38% 1,291,290 7/1/2005 16,277,640 14,884,935 39,860,241 $ (24,975,306) 37.34% 7,380,629 338.39% 1,822,052 Police Pension Fund Schedule of Funding Progress Market Actuarial Unfunded Unfunded as a City and Valuation Value of Accrued Accrued Funded Percent of Employee Date Plan Assets Liability Liability Ratio Payroll Payroll Contributions 7/1/1998 14,704,970 $ 15,310,072 $ (605,102) 96.05% $ 462,976 130.70% $ 149,829 7/1/2000 17,148,623 16,659,729 $ 488,894 102.93% 298,678 -163.69% 486,367 7/1/2002 16,640,975 17,480,732 $ (839,757) 95.20% 138,353 606.97% 761,649 7/1/2003 11,660,850 17,492,167 $ (5,831,317) 66.66% 138,353 4214.81% 548,946 7/1/2004 11,829,963 17,587,922 $ (5,757,959) 67.26% 63,830 9020.77% 472,891 7/1/2005 11,944,213 17,850,795 $ (5,906,582) 66.91% 65,745 8984.08% 859,275 \\Dover_1\finance\FDirector\Pension Plans\Actuarial Pension Presentation 010406

Page 2 of 2 Prepared for: Legislative, Finance & Administration Committee Agenda Item: 1 - January 9, 2006 Meeting Prepared by: Donna Mitchell, Treasurer/Finance Director City of Dover Civilian Pension Plan Changes in Contribution Rate 7/1/1998 7/1/2000 7/1/2002 7/1/2003 7/1/2004 7/1/2005 Contribution Rate at Beginning of Period 7.49% 9.03% 14.60% 21.52% 23.59% Change due to: 1) Salary Increases * 0.47% -0.46% -1.01% 0.00% 2) Investment gains/losses -1.68% 2.16% 2.19% 2.00% 1.98% 3) Liability Losses (mostly greater number of retirements) 0.64% 1.94% 0.84% 0.69% 0.63% 4) Retiree COLAs 0.66% 0.73% 0.34% - 0.50% 5) Mortality Assumption Change 1.69% - - - - 6) Retirement Rate Assumption Change - - 3.38% - - 7) Gross payroll did not increase @ 3.5% 0.23% 0.27% 0.63% - 0.52% 8) Contribution Shortfall 0.37% 0.17% 9) Increased normal cost rate 0.02% 0.01% Contribution Rate at Ending of Period 7.49% 9.03% 14.60% 21.52% 23.59% 27.40% 3.81% % Increase $ 281,202 Est. $ Increase * Included with liability loss Notes: 1. Changes due to individual salary increases that are more/less than the assumed 3.5%. 2. Changes due to investment losses are attributed to investment returns more/less than the assumed 7.5%. Some investment losses have been deferred and will not be reflected until future valuations. 3. Changes due to liability losses are mostly due to more retirements than expected. They also reflect changes in mortality, turnover and average age. 4. Changes due to retiree COLAs reflect the cost of ad hoc COLAs granted by the City. 5. Changes due to Mortality Assumption reflect the 7/1/2000 change to the GAM 1983 mortality table. 6. Changes due to Retirement Rate Assumption reflect the 7/1/2003 change to assume participants will retire earlier than previously assumed. 7. Changes due to gross payroll are due to the gross payroll increasing at a different rate than the assumed 3.5% annual increase in the amortization payment. 8. Contribution shortfall is attributed to the prior year contributions being of a lesser amount than what was projected in the last actuarial analysis. 9. Increase in normal cost rate attributed to premiums increasing at a higher rate than assumed. Source: Actuary Reports

Prepared for: Legislative, Finance & Administration Committee Page 1 of 1 Agenda Item: 2 - January 9, 2006 Meeting Prepared by: Donna Mitchell, Treasurer/Finance Director City of Dover GASB Postretirement Benefits Summary of Liability and Expense at 7/1/2005 Including Excluding Medicare Medicare Reimbursements Reimbursements Difference Benefit Obligation at 7/1/2005 Active participants $ 18,268,000 $ 15,917,000 $ 2,351,000 Retired participants 35,424,000 31,622,000 3,802,000 Total 53,692,000 47,539,000 6,153,000 Plan Assets (2,423,000) (2,423,000) - Unfunded Actuarial Accrued Liability (Amortized) $ 51,269,000 $ 45,116,000 $ 6,153,000 Annual Required Contribution (ARC) Normal Cost $ 1,340,000 $ 1,137,000 $ 203,000 Amortization payment of unfunded liability 3,335,000 2,935,000 400,000 Total Annual Required Contribution 4,675,000 4,072,000 603,000 Adjustment for current budgeted payout for retiree's (1,403,025) (1,403,025) - Additional Annual Required Contribution over Budget $ 3,271,975 $ 2,668,975 $ 603,000 Budget Impact by Fund General Fund $ 2,720,065 $ 2,272,419 $ 447,646 Water/Wastewater Fund 420,192 375,839 44,353 Electric Revenue Fund 1,534,743 1,423,742 111,001 Total Annual Required Contribution by Fund 4,675,000 4,072,000 603,000 Adjustment for current budgeted payout for retiree's General Fund (732,555) (732,555) - Water/Wastewater Fund (142,983) (142,983) - Electric Revenue Fund (527,487) (527,487) - Additional Annual Required Contribution by Fund $ 3,271,975 $ 2,668,975 $ 603,000 General Water/Wastewater Electric Revenue FY 2006 Budgeted Expenditures (excl. Budget Balance) $ 29,820,305 $ 11,920,561 $ 65,871,859 Percentage Increase to Current Budget w/ Medicare 6.7% 2.3% 1.5% Percentage Increase to Current Budget w/o Medicare 5.2% 2.0% 1.4% \\Dover_1\finance\FDirector\Various Analysis\OPEB Council Presentation