267017 Supplement Letter 1~1.pdf

CITY OF SALEM

FINANCE DEPARTMENT

CONTRACTS & PROCUREMENT DIVISION

SUPPLEMENTAL INFORMATION LETTER #1

April 15, 2026

RFP NO. 267017

FOR: Actuarial Services for Valuation of Other Post-Employment

Benefits (OPEB)

CLOSING DATE: April 24, 2026 at 4:00 PM (LOCAL TIME)

The following is hereby changed in the RFP, strikeout wording deleted and underscored wording added:

Section 6.9 Renewal

If the City determines that it is in the City’s best interest, the City may elect to extend the

Agreement for four (4) five (5) additional one (1) year periods at the end of each fiscal year, July 1 through June 30, subject to the following conditions:

a. Approval by City and budget approval.

b. Service has been determined, by the Contract Administrator, to be satisfactory.

c. Price remains firm for the additional year; adjusted only for any escalation/ de-escalation allowed under the terms of the Agreement.

d. Agreement to extend the Agreements, in writing, by the successful proposer after a minimum sixty (60) calendar days’ notice by City prior to the expiration of the

Agreement.

The following are questions submitted by Proposers and answers from the City:

Q) Please provide a list of the employee/bargaining groups to be included in the Actuarial

Valuation Services under this contract.

A) Unrepresented

American Federation of State, County and Municipal Employees (AFSCME)

International Association of Fire Fighters (IAFF)

Professional Communications Employees Association (PCEA)

Salem City Attorneys Collective Bargaining Unit (SCABU)

Salem Police Employees Union (SPEU)

Q) Is the City requesting separate Actuarial Valuations and Reports for each employee bargaining group or one comprehensive Actuarial Valuation and Report that includes separate financial statements for each employee bargaining group?

A) The City is requesting a single comprehensive valuation and report. We have historically not received any results differentiating bargaining groups.

Q) Is the City requesting that bid cost proposal be provided for only the initial year of the contract (Fiscal Year July 1, 2026 and continue until June 30, 2027) or is the City’s expectation that the bid cost proposal will also include pricing for the optional four (4) one (1) year periods?

A) Please provide pricing for full and interim valuations, or each year of the period.

Q) Does the City fund its OPEB plan on a ‘pay-as-you go’ basis and or has an

OPEB trust been established?

A) The plan is funded on a pay-as-you-go basis, no assets have been set aside in any manner.

Q) Please confirm whether the City is requesting BIENNIAL FULL GASB 75 compliant actuarial valuations and reports with updated (roll-forward) report for interim years or

ANNUAL FULL GASB 75 compliant actuarial valuations and reports.

A) The City would like biennial full valuations and interim year updates.

Q) When was the most recent GASB 75 compliant FULL OPEB actuarial valuation and report completed for the City by the previous vendor?

A) The valuation for the year ended 6/30/2025 was a full valuation.

Q) What is the name of the firm that completed the most recent GASB 75 compliant

FULL OPEB actuarial valuation and report for the City?

A) Nyhart

Q) Can we receive a copy of the most recent GASB 75 compliant FULL OPEB actuarial valuation and report completed for the City?

A) Attached

Q) If applicable, when was the most recent interim (updated or roll-forward) GASB

75 compliant OPEB valuation reports provided to the City?

A) Last interim valuation was for the year ended 6/30/2024

Q) If applicable, can we receive a copy of the most recent interim (updated or roll-forward) GASB 75 compliant OPEB Valuation Report provided to the City?

Q) How long has the current actuarial firm been performing GASB compliant OPEB valuations and reporting services for the City?

A) 17 years

Q) Why is the City seeking new bid proposals at this time?

A) 5 year contract term is up for rebid.

Q) Is the previously contracted firm expected to submit a new proposal?

A) It is up to that firm.

Q) Was a weighted evaluation criteria used as the basis of award for the previously awarded contract?

A) Similar criteria is used in this RFP.

Q) If a weighted evaluation criteria was used as the basis of award for the previously awarded contract, can we receive a copy of the bid tabulations/scoring for the previously short-listed proposing vendors?

A) Here is the scoring:

Nyhart, 272/300

Healthcare Actuaries, 268/300

Key Benefit Concepts, 258/300

David Dougherty, 238/300

Lewis & Ellis, 188/300

Q) What is the anticipated budget for this contract?

A) $10,000

Q) What are the requirements for other onsite consulting, meetings, and/or presentations?

A) In the past, valuations have been completed remotely with the opportunity to meet virtually for any required discussion. No formal presentations have been required or requested by any stakeholders in recent memory. So this arrangement has been satisfactory.

Q) Can all meetings and/or presentations be performed using voice conference and/or web meeting services?

A) Yes, any required meetings or presentations can be performed remotely.

Q) Can you please provide the fees paid to the current actuary for the last 2 years for both the OPEB valuation and GASB 75 reports?

A) $10,000 for full valuation (bi-annual), $3,200 for interim year

Q) Please supply a copy of the June 30, 2024 and June 30, 2025 GASB 75 valuation reports prepared by the actuary.

Q) If an experience study has been performed to develop or confirm any of the assumptions used in the GASB 75 valuation, please provide a copy of it.

Q) Would you estimate the internal deadlines for Council review, report completion for audit fieldwork, and/or ACFR production that proposers should plan around?

A) Regarding the OPEB valuation, we try to get the data request from the firm as early as possible after the FYE (June 30) and provide the data as quickly as possible. That typically can be done within 2 weeks of request. We then would like to have the valuation report completed by September 30 in order to get the information populated into financial statements by mid-October before final audit work typically begins. The

OPEB valuation does not require Council review. The ACFR also does not require

Council approval prior to issuance.

Q) Are there any plan design changes currently approved but not yet effective that could impact the next valuation cycle?

A) No

Q) Are there known concerns or questions from your auditors related to the assumptions used for prior Other Post-Employment Benefits Plan (“OPEB”) plan valuations or prior disclosure measurements? If so, what are the questions or concerns?

A) No

Q) Is the City satisfied with the services provided by the vendor that performed the June 30, 2025 GASB 75 valuation?

a) If not, what issues or concerns were encountered?

b) Is the current vendor invited to respond to this RFP?

A) Yes, the City is satisfied with the services provided by the current vendor, the current vendor is invited to response to this RFP.

Shawna Self, CPPB

Purchasing Manager cc: File

GASB 75 INTERIM ACTUARIAL VALUATION

Fiscal Year Ending June 30, 2024

CITY OF SALEM

CONTACT

Tina Liu, EA, MAAA, FCA tina.liu@nyhart.com

PHONE

General (317) 845-3500

Table of Contents

Page

Certification 1

Executive Summary 3

GASB Disclosures Schedule of Changes in Net OPEB Liability and Related Ratios 4

OPEB Expense 6

Deferred Outflows / (Inflows) of Resources 7

Sensitivity Results 10

Projection of GASB Disclosures 11

Discussion of Discount Rates 12

Summary of Key Actuarial Assumptions 13

Actuary's Notes 15

October 3, 2024

Jeremy Morgan

City of Salem

555 Liberty Street SE

Suite 230

Salem, OR 97301

This report summarizes the interim GASB actuarial valuation for the City of Salem 2023/24 fiscal year. To the best of our knowledge, the report presents a fair position of the funded status of the plan in accordance with GASB Statement No. 75 (Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions). This report may not be appropriate for other purposes. Please contact Nyhart prior to disclosing this report to any other party or relying on its content for any purpose other than that explained above. Failure to do so may result in misrepresentation or misinterpretation of this report.

The information presented herein is based on the actuarial assumptions and substantive plan provisions summarized in this report and participant information furnished to us by the Plan Sponsor. We have reviewed the employee census provided by the Plan Sponsor for reasonableness when compared to the prior information provided but have not audited the information at the source, and therefore do not accept responsibility for the accuracy or the completeness of the data on which the information is based. When relevant data may be missing, we may have made assumptions we feel are neutral or conservative to the purpose of the measurement . We are not aware of any significant issues with and have relied on the data provided.

The discount rate, other economic assumptions, and demographic assumptions have been selected by the Plan Sponsor with the concurrence of Nyhart.

In our opinion, the actuarial assumptions are individually reasonable and in combination represent our estimate of anticipated experience of the Plan. All calculations have been made in accordance with generally accepted actuarial principles and practice.

Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors 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.

We did not perform an analysis of the potential range of future measurements due to the limited scope of our engagement.

To our knowledge, there have been no significant events prior to the current year's measurement date or as of the date of this report that could materially affect the results contained herein.

Neither Nyhart nor any of its employees has any relationship with the plan or its sponsor that could impair or appear to impair the objectivity of this report. Our professional work is in full compliance with the American Academy of Actuaries “Code of Professional Conduct” Precept 7 regarding conflict of interest. The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States.

Should you have any questions please do not hesitate to contact us .

Giovanni Gomez, ASA, EA, MAAA Actuary

Tina Liu, EA, MAAA, FCA Actuary

Executive Summary City of Salem Interim GASB 75 Valuation for Fiscal Year Ending June 30, 2024

Summary of Results

Presented below is the summary of GASB 75 results for the fiscal year ending June 30 , 2024 compared to the prior fiscal year as shown in the City's Notes to Financial Statement.

As of June 30, 2024 As of June 30, 2023

Total OPEB Liability 20,332,435 17,677,690 $$

Actuarial Value of Assets 0 0 $$

Net OPEB Liability 20,332,435 17,677,690 $$

Funded Ratio 0.0% 0.0%

FY 2023/24 FY 2022/23

OPEB Expense 1,794,600 1,694,546 $$

Annual Employer Contributions 709,946 677,984 $$

As of June 30, 2024 As of June 30, 2023

4.21%Discount Rate 4.13%

Expected Return on Assets N/AN/A

As of June 30, 2024

1,234 Total Active Participants

Total Retiree Participants 53

The active participants’ number above may include active employees who currently have no health care coverage.

* The counts as of June 30, 2024 were provided by the City and were not used as the basis for determining the liability as of June 30, 2024 for the interim valuation.

GASB Disclosures

Schedule of Changes in Net OPEB Liability and Related Ratios

OPEB Liability FY 2023/24 FY 2022/23 FY 2021/22 FY 2020/21 FY 2019/20

Total OPEB Liability

Total OPEB Liability - beginning of year 17,677,690 17,331,498 19,600,900 15,891,684 14,762,771 $ $ $ $ $

Service cost 990,950 1,109,061 1,535,571 1,158,458 1,009,824

Interest 756,503 740,493 455,980 445,841 541,913

Change of benefit terms 0 0 0 0 0

Changes in assumptions 915,214 352,979 (2,703,325) 1,684,624 1,011,076

Differences between expected and actual experience 702,024 (1,178,357) (923,294) 1,002,500 (761,169)

(709,946)Benefit payments (677,984) (634,334) (582,207) (672,731)

Net change in total OPEB liability 2,654,745 346,192 (2,269,402) 3,709,216 1,128,913 $ $ $ $ $

Total OPEB Liability - end of year 20,332,435 17,677,690 17,331,498 19,600,900 15,891,684 $ $ $ $ $

Plan Fiduciary Net Position

Plan fiduciary net position - beginning of year 0 0 0 0 0 $ $ $ $ $

Contributions - employer 709,946 677,984 634,334 582,207 672,731

Contributions - active employees 0 0 0 0 0

Net investment income 0 0 0 0 0

Benefit payments (709,946) (677,984) (634,334) (582,207) (672,731)

Trust administrative expenses 0 0 0 0 0

Net change in plan fiduciary net position 0 0 0 0 0 $ $ $ $ $

Plan fiduciary net position - end of year 0 0 0 0 0 $ $ $ $ $

Net OPEB Liability - end of year 20,332,435 17,677,690 17,331,498 19,600,900 15,891,684 $ $ $ $ $

Plan fiduciary net position as % of total OPEB liability 0.0% 0.0% 0.0% 0.0% 0.0%

Covered employee payroll 99,075,844 97,336,429 88,138,336 86,012,605 $ $ N/A $ $

Net OPEB liability as % of covered payroll 20.5% 18.2% 22.2% 18.5%N/A

* Contributions and benefit payments are estimated implicit subsidy benefit payments.

* Historical payroll amounts were estimated when actuals were not available.

Schedule of Changes in Net OPEB Liability and Related Ratios (Continued)

OPEB Liability FY 2018/19 FY 2017/18 FY 2016/17 FY 2015/16 FY 2014/15

Total OPEB LiabilityTotal OPEB Liability

Total OPEB Liability - beginning of year 13,022,350 13,248,635 12,432,574 $ $ $

Service cost 840,781 884,521 833,406

Interest 524,551 491,630 355,158

Change of benefit terms 0 0 (42,568)

Changes in assumptions (263,711) (332,489) (373,074)

Differences between expected and actual experience 1,262,401 (617,596) 586,322

Benefit payments (623,601) (652,351) (543,183)

Net change in total OPEB liability 1,740,421 (226,285) 816,061 $ $ $

Total OPEB Liability - end of year 14,762,771 13,022,350 13,248,635 $ $ $

Plan Fiduciary Net Position

Plan fiduciary net position - beginning of yearPlan fiduciary net position - beginning of year 0 0 0 $ $ $

Contributions - employer 623,601 652,351 543,183

Contributions - active employees 0 0 0

Net investment income 0 0 0

Benefit payments (623,601) (652,351) (543,183)

Trust administrative expenses 0 0 0

Net change in plan fiduciary net position 0 0 0 $ $ $

Plan fiduciary net position - end of year 0 0 0 $ $ $

Net OPEB Liability - end of year 14,762,771 13,022,350 13,248,635 $ $ $

Plan fiduciary net position as % of total OPEB liability 0.0% 0.0% 0.0%

Covered employee payroll 83,103,966 77,265,090 74,652,261 $ $ $

Net OPEB liability as % of covered payroll 17.8% 16.9% 17.7%

* Contributions and benefit payments are estimated implicit subsidy benefit payments.

OPEB Expense

OPEB Expense FY 2023/24 FY 2022/23

Discount Rate

Beginning of year 4.13% 4.09%

End of year 4.21% 4.13%

Service cost 990,950 1,109,061 $ $

Interest 756,503 740,493

Change of benefit terms 0 0

Projected earnings on OPEB plan investments 0 0

Reduction for contributions from active employees 0 0

OPEB plan administrative expenses 0 0

Current period recognition of deferred outflows / (inflows) of resources

Differences between expected and actual experience 13,593 (74,163)$ $

Changes in assumptions 33,554 (80,845)

Net difference between projected and actual earnings on OPEB plan investments 0 0

Total current period recognition (155,008) 47,147 $ $

Total OPEB expense 1,694,546 1,794,600 $ $

Deferred Outflows / (Inflows) of Resources

Deferred Outflows / (Inflows) of Resources represents the following items that have not been recognized in the OPEB Expense :

1. Differences between expected and actual experience of the OPEB plan

2. Changes of assumptions

3. Differences between projected and actual earnings in OPEB plan investments (for funded plans only)

The initial amortization period for the first two items noted above is based on expected future service lives while the difference between the projected and actual earnings in OPEB plan investment is amortized over five years . All balances are amortized linearly on a principal only basis and new bases will be created annually for each of the items above.

Differences between expected and actual experience for FYE Initial Balance Initial Amortization

Period

Annual

Recognition

Unamortized Balance as of June 30, 2024

June 30, 2017 586,322 8 77,780 0 $ $ $

June 30, 2018 (617,596) 8 (77,200) (77,196)$ $ $

June 30, 2019 1,262,401 8 157,800 315,601 $ $ $

June 30, 2020 (761,169) 8 (95,146) (285,439)$ $ $

June 30, 2021 1,002,500 8 125,313 501,248 $ $ $

June 30, 2022 (923,294) 8 (115,412) (577,058)$ $ $

June 30, 2023 (1,178,357) 8 (147,295) (883,767)$ $ $

June 30, 2024 702,024 8 87,753 614,271 $ $ $

Deferred Outflows / (Inflows) of Resources (Continued)

Changes in assumptions for FYE Initial Balance Initial Amortization

Period

Annual

Recognition

Unamortized Balance as of June 30, 2024

June 30, 2017 (373,074) 8 (49,492) 0 $ $ $

June 30, 2018 (332,489) 8 (41,561) (41,562)$ $ $

June 30, 2019 (263,711) 8 (32,964) (65,927)$ $ $

June 30, 2020 1,011,076 8 126,385 379,151 $ $ $

June 30, 2021 1,684,624 8 210,578 842,312 $ $ $

June 30, 2022 (2,703,325) 8 (337,916) (1,689,577)$ $ $

June 30, 2023 352,979 8 44,122 264,735 $ $ $

June 30, 2024 915,214 8 114,402 800,812 $ $ $

Unamortized Balance as of June 30, 2024

Annual

Recognition

Initial Amortization

Period Initial Balance

Net Difference between projected and actual earnings in

OPEB plan investments for FYE

June 30, 2020 0 0 0 N/A$ $$

June 30, 2021 0 0 0 N/A$ $$

June 30, 2022 0 0 0 N/A$ $$

June 30, 2023 0 0 0 N/A$ $$

June 30, 2024 0 0 0 N/A$ $$

Deferred Outflows / (Inflows) of Resources (Continued)

Deferred Outflows Deferred InflowsAs of fiscal year ending June 30, 2024

Differences between expected and actual experience 1,431,120 (1,823,460)$ $

Changes in assumptions 2,287,010 (1,797,066)

Net difference between projected and actual earnings in OPEB plan investments N/A N/A

Total 3,718,130 $ (3,620,526)$

Annual Amortization of Deferred Outflows / (Inflows)

The balances as of June 30, 2024 of the deferred outflows / (inflows) of resources will be recognized in OPEB expense in the future fiscal years as noted below.

FYE Balance

18,862 $ 2025

137,622 $ 2026

12,779 $ 2027

(18,459)$ 2028

(354,341)$ 2029

301,141 Thereafter $

Sensitivity Results

The following presents the Net OPEB Liability as of June 30, 2024, calculated using the discount rate assumed and what it would be using a 1% higher and 1% lower discount rate.

· The current discount rate is 4.21%.

· The 1% decrease in discount rate would be 3.21%.

· The 1% increase in discount rate would be 5.21%.

The following presents the Net OPEB Liability as of June 30, 2024, using the health care trend rates assumed and what it would be using 1% higher and 1% lower health care trend rates.

· The current health care trend rate starts at an initial rate of 8.00%, decreasing to an ultimate rate of 4.50%.

· The 1% decrease in health care trend rates would assume an initial rate of 7.00%, decreasing to an ultimate rate of 3.50%.

· The 1% increase in health care trend rates would assume an initial rate of 9.00%, decreasing to an ultimate rate of 5.50%.As of June 30, 2024 Net OPEB Liability

1% Decrease

Current Discount Rate

1% Increase As of June 30, 2024 Net OPEB Liability

1% Increase

1% Decrease

Current Trend Rates

20,332,435

18,674,665

22,139,886

17,977,620

20,332,435

23,099,359

Projection of GASB Disclosures

The Total OPEB Liability (TOL) is expected to change on an annual basis as a result of expected and unexpected events. Under normal circumstances, it is generally expected to have a net increase each year. Below is a list of the most common events affecting the total OPEB liability and whether they increase or decrease the liability.

Expected Events

· Increases in TOL due to additional benefit accruals as employees continue to earn service each year

· Increases in TOL due to interest as the employees and retirees age

· Decreases in TOL due to benefit payments

Unexpected Events

· Increases in TOL when actual health care costs increase more than expected. A liability decrease occurs when the reverse happens.

· Increases in TOL when more new retirements occur than expected or fewer terminations occur than anticipated. Liability decreases occur when the opposite outcomes happen.

· Increases or decreases in TOL depending on whether benefits are improved or reduced.

Projection of Total OPEB Liability

(TOL)

FY 2023/24 FY 2024/25

TOL as of beginning of year 17,677,690 20,332,435 $ $

Normal cost as of beginning of year 990,950 1,105,484

Exp. benefit payments during the year (709,946) (829,106)

Interest adjustment to end of year 756,503 885,264

Exp. TOL as of end of year 18,715,197 21,494,077 $ $

Actuarial Loss / (Gain) 1,617,238 TBD

Actual TOL as of end of year 20,332,435 TBD$ $

Discount rate as of beginning of year 4.13% 4.21%

Discount rate as of end of year TBD 4.21%

Discussion of Discount Rates

Under GASB 75, the discount rate used in valuing OPEB liabilities for unfunded plans as of the Measurement Date must be based on a yield for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale).

For the current valuation, the discount rate was selected from the range of indices as shown in the table below, where the range is given as the spread between the lowest and highest rate shown.

Bond Buyer Go 20-

Bond Municipal

Bond Index

S&P Municipal Bond

20-Year High Grade

Rate Index

Fidelity 20-Year

Go Municipal

Bond Index

Bond Index Range

Actual

Discount

Rate Used

Yield as of June 30, 2023 3.65% 4.13% 3.86% 3.65% - 4.13% 4.13%

Yield as of June 30, 2024 3.93% 4.21% 3.97% 3.93% - 4.21% 4.21%

3.00%

3.50%

4.00%

4.50%

5.00%

Jun-23 Sep-23 Dec-23 Mar-24 Jun-24

20-Year Municipal Bond Indices

Bond Buyer 20-Bond GO Index S&P Municipal Bond 20 Year High Grade Rate Index

Fidelity GO AA - 20 Yrs Nyhart recommended

Actuarial Methods and Assumptions

For a complete summary of actuarial methods and assumptions, refer to the GASB 75 actuarial valuation report for the fiscal year ending June 30, 2023.

Measurement Date For fiscal year ending June 30, 2024, a June 30, 2024 measurement date was used.

Actuarial Valuation Date July 1, 2023 Liabilities as of June 30, 2024 are based on July 1, 2023 valuation projected to June 30, 2024, reflecting actual premium changes from 2023 to 2024.

Liabilities as of June 30, 2023 are based on an actuarial valuation date of July 1, 2023 with no adjustments.

Discount Rate 4.21% as of June 30, 2024 and 4.13% as of June 30, 2023 for accounting disclosure purposes.

Refer to the Discussion of Discount Rates section for more information on selection of the discount rate, which is determined by the Plan Sponsor in concurrence with Nyhart.

Payroll Growth 3.50% for general wage inflation plus merit and productivity increases which are based on those used in the

Oregon Public Employees Retirement System (OPERS) actuarial valuation as of June 30, 2020, consistent with the City’s 2022 Experience Study. Sample annual salary increases for merit and productivity are as shown below:

YOS General Police/Fire

0 3.70% 4.44%

5 2.24% 2.39%

10 1.21% 1.23%

15 0.54% 0.69%

20 0.16% 0.52%

25 0.01% 0.44%

30+ 0.00% 0.21%

Cost Method Allocation of Actuarial Present Value of Future Benefits for services prior and after the Measurement Date was determined using Entry Age Normal Level % of Salary method where:

• Service Cost for each individual participant, payable from date of employment to date of retirement, is sufficient to pay for the participant’s benefit at retirement; and

• Annual Service Cost is a constant percentage of the participant’s salary that is assumed to increase according to the Payroll Growth.

Actuarial Methods and Assumptions

Health Care Trend Rates FYE Medical/Rx FYE Medical/Rx

2024 * 2029 6.00% 2025 8.00% 2030 5.50% 2026 7.50% 2031 5.00% 2027 7.00% 2032+ 4.50% 2028 6.50%

*FYE 2024 Health Care Trend Rates are based on the actual rate of increase from the medical premium rates effective January 1, 2023 to those effective January 1, 2024.

Models

ProVal Valuation software developed by Winklevoss Technologies, LLC. This software is widely used for the purpose of performing postretirement medical valuations. We coded the plan provisions, assumptions, methods and participant data summarized in this report, and reviewed the liability and cost outputs for reasonableness. We are not aware of any weakness or limitations in the software and have determined it is appropriate for performing this valuation.

HealthMAPS Manual Rating manual developed by WTW. Aging factors are used to develop per capita costs by age for plans with limited credible exposure to develop plan-specific factors. We are not aware of any weakness or limitations in the factors and have determined they are appropriate for performing this valuation.

The initial trend rate was based on a combination of employer history, national trend surveys, and professional judgment.

The ultimate trend rate was selected based on historical medical CPI information.

Actuary’s Notes City of Salem Interim GASB 75 Valuation for Fiscal Year Ending June 30, 2024

Interim year valuation results have been projected from the prior year’s valuation with adjustments for actual premium increases from 2023 to 2024.

Making this change resulted in an increase in liabilities.

Healthcare trend rates for FYE 2025 have been reset to an initial rate of 8.00% decreasing annually by 0.50% to an ultimate rate of 4.50%. Making this change resulted in an increase in liabilities.

Additionally, we have updated the discount rate assumption to be based on the yield for 20-year-tax-exempt general obligation municipal bonds as of June 30, 2024 (measurement date). The discount rate is 4.21% as of June 30, 2024 and 4.13% as of June 30, 2023. Refer to the Discussion of Discount Rates section for more information on selection of the discount rate. Making this change resulted in a slight decrease in liabilities.

Premium Rates Same benefit options are available to retirees as active employees. The PPO and HDHP plans are self-insured and the Kaiser plan is fully-insured and community-rated.

The monthly premiums effective January 1, 2024 and January 1, 2023 are as shown below:

Eff. 1/1/2024 Eff. 1/1/2023

Health Plans EE EE/Spouse EE EE/Spouse

Kaiser $ 825.98 $ 1,652.00 $ 688.32 $ 1,376.67

PPO $ 906.16 $ 1,812.29 $ 816.37 $ 1,632.69

HDHP $ 502.78 $ 1,005.53 $ 502.78 $ 1,005.53

THE HOWARD E. NYHART COMPANY, INC. ("NYHART")

SERVICE AGREEMENT ("AGREEMENT")

Agreement Between Nyhart, and:

Client Name: City of Salem

Primary Contact Name: Jeremy Morgan

Primary Contact Address: 555 Liberty Street SE, Room 230

Salem, OR 97301

Primary Contact Phone: (503) 588-6015

Primary Contact Fax:

Primary Contact Email: JMorgan@cityofsalem.net

Services to be provided by Nyhart

Nyhart will provide the following actuarial services:

• Experience Study

Fees for services provided by Nyhart

Service

Experience Study

Fee

$6,000

Redacted areas contain confidential information

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