Exhibit_B_-_City_of_Clearwater_GASB_75_OPEB_Report_-_FYE_9-30-2024.pdf

City of Clearwater, Florida

GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions

For the Fiscal Year Ending September 30, 2024

October 25, 2024

Mr. Brian Jay Ravins Finance Director Finance Department P.O. Box 4748 Clearwater, FL 33758‐4748

Re: GASB Statement No. 75: Other Post‐Employment Benefits (OPEB) Actuarial Valuation as of January 1, 2024 for Fiscal Year Ending September 30, 2024

Dear Mr. Ravins:

Gabriel, Roeder, Smith & Company (GRS) has been engaged by the City of Clearwater, Florida (the City) to perform an Actuarial Valuation of its Other Post‐Employment Benefits (OPEB) provided to the City’s retiring employees. The Valuation covers medical (including prescription drug) insurance benefits provided to retirees, in addition to life insurance benefits to covered retirees who retired prior to October 1, 2008. We are pleased to present the results herein.

This report provides information on behalf of the City in connection with the Governmental Accounting Standards Board (GASB) Statement No. 75 “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.” This information is intended to assist in preparation of the financial statements of the City. Financial statements are the responsibility of management, subject to the auditor’s review. Please let us know if the auditor recommends any changes.

The calculation of the liability associated with the benefits described in this report was performed for the purpose of satisfying the requirements of GASB Statement No. 75. The calculation of the plan’s liability for this report is not applicable for funding purposes of the plan. A calculation of the plan’s liability for purposes other than satisfying the requirements of GASB Statement No. 75 may produce significantly different results.

This report was prepared at the request of the City and is intended for use by the City and those designated or approved by the City. This report may be provided to parties other than the City only in its entirety and only with the permission of the City. GRS is not responsible for unauthorized use of this report.

This report is based upon information through January 1, 2024, furnished to us by the City, concerning OPEB, active members, deferred vested members, retirees and beneficiaries, and financial data. This information was checked for internal consistency, but it was not audited. We are not responsible for the accuracy or completeness of the information provided by the City.

The calculations are based upon assumptions regarding future events, which may or may not materialize. They are also based upon plan provisions outlined in this report. If you have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, that important relevant plan provisions are not described, or that conditions have changed

Mr. Brian Jay Ravins October 25, 2024 since the calculations were made, you should contact the author of this report prior to relying on information in the report.

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;

and changes in plan provisions or applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements.

This report was prepared using our proprietary valuation model and related software which in our professional judgment has the capability to provide results that are consistent with the purposes of the valuation and has no material limitations or known weaknesses. We performed tests to ensure that the model reasonably represents that which is intended to be modeled.

Nicolas Lahaye and Piotr Krekora are Members of the American Academy of Actuaries (MAAA). These actuaries meet the Academy’s Qualification Standards to render the actuarial opinions contained herein.

The signing actuaries are independent of the plan sponsor.

This report has been prepared by actuaries who have substantial experience valuing public post‐ employment benefits programs. To the best of our knowledge, the information contained in this report is accurate and fairly represents the actuarial position of the plan as of the valuation date. All actuarial assumptions used in this report are reasonable for the purposes of this valuation. Calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board, and with applicable statutes. If you have reason to believe that the information provided in this report is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the author of the report prior to making such decision.

We will be pleased to answer any questions pertaining to the Actuarial Valuation.

Respectfully submitted, GABRIEL, ROEDER, SMITH & COMPANY

Nicolas Lahaye, FSA, EA, MAAA, FCA Piotr Krekora, ASA, EA, MAAA, FCA Consultant & Actuary Senior Consultant & Actuary

City of Clearwater OPEB for FYE 9/30/2024

Table of Contents Page

Section A Executive Summary

Executive Summary .............................................................................................................. A‐1 Discussion ............................................................................................................................ A‐2

Section B Financial Schedules

Schedule of Changes in Total OPEB Liability and Related Ratios .......................................... B‐1 Notes to Schedule of Changes in Total OPEB Liability and Related Ratios ........................... B‐2 Statement of OPEB Expense ................................................................................................. B‐3 Statement of Outflows and Inflows Arising from Current Reporting Period ....................... B‐4 Statement of Outflows and Inflows Arising from Current and Prior Reporting Periods ...... B‐5 Statement of Remaining Deferred Outflows and Inflows of Resources ............................... B‐6 Discount Rate ........................................................................................................................ B‐7 Plan Assets ............................................................................................................................ B‐7 Summary of Membership Information ................................................................................. B‐7 Sensitivity of Total OPEB Liability ......................................................................................... B‐8

Section C Summary of Substantive Plan Provisions .............................................................................. C‐1

Section D Development of Initial Per Capita Costs .............................................................................. D‐1

Section E Summary of Participant Data ................................................................................................ E‐1

Section F Actuarial Assumptions and Methods

Methods and Demographic/Economic Assumptions ........................................................... F‐1 Health Coverage Assumptions .............................................................................................. F‐6

Miscellaneous and Technical Assumptions .......................................................................... F‐9 Assumption, Method, and Plan Changes ............................................................................ F‐10

Section G Glossary of Terms ................................................................................................................ G‐1

SECTION A

EXECUTIVE SUMMARY

City of Clearwater OPEB for FYE 9/30/2024 A‐1

Executive Summary

Actuarial Valuation Date January 1, 2024 Measurement Date of the Total OPEB Liability September 30, 2024 Employer's Fiscal Year Ending Date (Reporting Date) September 30, 2024

Membership as of the Valuation Date Number of ‐ Retirees and Beneficiaries 536 ‐ Inactive, Nonretired Members 91 ‐ Active Members 1,622 ‐ Total 2,249 Covered‐Employee Payroll 125,786,564$

Total OPEB Liability Total OPEB Liability 20,623,609$ Total OPEB Liability as a Percentage of Covered‐Employee Payroll 16.40 %

Development of the Single Discount Rate Long‐Term Municipal Bond Rate* 3.88 %

Total OPEB Expense 271,378$

Summary of Deferred Outflows and Deferred Inflows of Resources by Source

Deferred Outflows of Resources

Deferred

Inflows of Resources

Difference between expected and actual experience 0$ 8,212,315$ Changes in assumptions and other inputs 129,240 2,818,608

Total 129,240$ 11,030,923$

*Source: "Fidelity AA Index" rate as of September 30, 2024, the most recent date available on or before the measurement date. This is the rate for Fixed Income Market Yield Curve for Municipal bonds with 20 years to maturity that include only federally tax‐exempt municipal bonds as reported in Fidelity

Investments' “20‐Year Municipal AA Index.” In describing this index, Fidelity notes that the municipal curves are constructed using option adjusted analytics of a diverse population of over 10,000 tax exempt securities.

City of Clearwater OPEB for FYE 9/30/2024 A‐2

Discussion

Financial Statements

GASB Statement No. 75 requires state and local government employers to recognize the net OPEB liability and the OPEB expense on their financial statements, along with the related deferred outflows and inflows of resources. The net OPEB liability is the difference between the total OPEB liability and the plan’s fiduciary net position. In traditional actuarial terms, this is analogous to the accrued liability less the market value of assets. Since the plan is currently unfunded, the net OPEB liability is equal to the total OPEB liability.

The following discussion provides a summary of the information that is required to be disclosed under this accounting standard. A number of these disclosure items are provided in this report. However, certain information, such as notes regarding accounting policies and investments, is not included in this report. As a result, the employer is responsible for preparing and disclosing the non‐actuarial information needed to comply with these accounting standards.

The OPEB expense recognized each fiscal year is equal to the change in the total OPEB liability from the beginning of the year to the end of the year, not including the impact of employer contributions, adjusted for deferred recognition of the liability.

GASB Statement No. 75 states the employer contributions made to the OPEB plan subsequent to the measurement date and before the end of the employer’s reporting period should be reported as a deferred outflow of resources.

Notes to Financial Statements

GASB Statement No. 75 requires numerous note disclosures to the employer’s financial statements concerning the plan.

Required Supplementary Information for Plans that Do Not Have Formal Assets

GASB Statement No. 75 requires a 10‐year fiscal history (to be built prospectively) of:

Sources of changes in the total OPEB liability, Information about the total OPEB liability and related ratios, including the total OPEB liability as a percent of covered‐employee payroll.

Timing and Frequency of the Actuarial Valuation

An actuarial valuation to determine the total OPEB liability is required to be performed at least every two years. For the employer’s financial reporting purposes, the total OPEB liability and OPEB expense should be measured as of the employer’s “measurement date” which may not be earlier than the employer’s prior fiscal year end‐date. If the actuarial valuation used to determine the total OPEB liability is not calculated as of the measurement date, the total OPEB liability is required to be rolled forward from the actuarial valuation date to the measurement date.

City of Clearwater OPEB for FYE 9/30/2024 A‐3

The total OPEB liability shown in this report is based on an actuarial valuation performed as of January 1, 2024 and a measurement date of September 30, 2024.

Discount Rate

For plans that do not have formal assets, the discount rate should equal a yield or index rate for 20‐year, tax‐exempt municipal bonds with an average rating of AA/Aa or higher as of the measurement date. For the purpose of this valuation, the municipal bond rate is 3.88% (based on the daily rate closest to but not later than the measurement date of Fidelity Investments’ “20‐Year Municipal AA Index”).

Actuarial Assumptions

The actuarial assumptions used to value the liabilities are outlined in detail in Section F. The assumptions include details on the health care trend assumption, the aging factors as well as the cost method used to develop the OPEB expense.

Future Uncertainty or Risk

Future results may differ from those anticipated in this valuation. Reasons include, but are not limited to:

Actual medical trend differing from expected;

Changes in the healthcare plan designs offered to active and retired members;

Participant behavior differing from expected;

o Elections at retirement;

o One‐person versus two‐person coverage elections;

o Time of retirement or termination.

Benefits Valued

The benefit provisions that were valued are summarized in Section C. The valuation is required to be performed on the current benefit terms and existing legal agreements. Consideration is to be given to the written plan document as well as other communications between the employer and plan members and an established pattern of practice for cost sharing. The summary of major plan provisions is designed to outline principal plan benefits. If the plan summary is not in accordance with the actual provisions, please alert the actuary immediately so they can both be sure the proper provisions are valued.

SECTION B

FINANCIAL SCHEDULES

City of Clearwater OPEB for FYE 9/30/2024 B‐1

Schedule of Changes in Total OPEB Liability and Related Ratios

Measurement Year Ending September 30, 2024 (Ultimately 10 Years Will Be Displayed)

Measurement Year Ended September 30, 2024 2023 2022 2021 2020 2019 2018

A. Total OPEB Liability

1. Service cost 1,672,642$ 1,688,573$ 2,412,125$ 2,213,247$ 2,282,038$ 1,677,787$ 1,731,394$

2. Interest on the Total OPEB Liability 1,173,208 1,063,683 645,528 662,501 953,389 1,086,906 974,551

3. Changes of benefit terms 36,283 0 0 0 28,595 0 0

4. Difference between expected and actual experience of the Total OPEB Liability (4,896,063) 0 (5,128,309) 0 (4,646,689) 0 0

5. Changes in assumptions and other inputs (572,816) (545,424) (1,481,029) (120,728) (4,692,393) 4,006,356 (1,029,325)

6. Benefit payments (912,524) (1,139,984) (912,692) (1,022,036) (1,048,358) (1,122,335) (1,054,805)

7. Net change in Total OPEB Liability (3,499,270)$ 1,066,848$ (4,464,377)$ 1,732,984$ (7,123,418)$ 5,648,714$ 621,815$

8. Total OPEB Liability – Beginning 24,122,879 23,056,031 27,520,408 25,787,424 32,910,842 27,262,128 26,640,313

9. Total OPEB Liability – Ending 20,623,609$ 24,122,879$ 23,056,031$ 27,520,408$ 25,787,424$ 32,910,842$ 27,262,128$

B. Covered‐Employee Payroll 125,786,564$ 115,695,892$ 110,228,154$ 101,205,829$ 99,272,204$ 95,520,530$ 92,964,945$

C. Total OPEB liability as a percentage of Covered‐Employee Payroll 16.40% 20.85% 20.92% 27.19% 25.98% 34.45% 29.33%

City of Clearwater OPEB for FYE 9/30/2024 B‐2

Notes to Schedule of Changes in Total OPEB Liability and Related Ratios

Valuation Date: January 1, 2024

Measurement Date: September 30, 2024

Roll Forward Procedures: The Total OPEB Liability was rolled forward nine months from the Valuation

Date to the Measurement Date using standard actuarial techniques.

Methods and Assumptions Used to Determine Total OPEB Liability:

Actuarial Cost Method Entry Age Normal

Inflation 2.50%

Discount Rate 3.88%

Salary Increases Salary increase rates used in the January 1, 2024 actuarial valuation of the City of

Clearwater Employees' Pension Plan.

Retirement Age Retirement rates used in the January 1, 2024 actuarial valuation of the City of

Clearwater Employees' Pension Plan.

Mortality Mortality rates are the same as used in the July 1, 2023 actuarial valuation of the

Florida Retirement System for non‐K‐12 Instructional Regular Class and Special

Risk Class members. These rates were taken from adjusted Pub‐2010 mortality tables published by the Society of Actuaries with generational mortality improvements using Scale MP‐2018. Adjustments to referenced tables are based on the results of a statewide experience study covering the period 2013 through

2018.

Healthcare Cost Trend Rates Based on the Getzen Model, with trend starting at 6.00% and gradually decreasing to an ultimate trend rate of 4.00%.

Aging factors Based on the 2013 SOA Study "Health Care Costs ‐ From Birth to Death".

Expenses Administrative expenses are included in the per capita health costs.

Other Information:

Notes The following assumption changes have been reflected in the Schedule of

Changes in the Total OPEB Liability for the measurement period ending

September 30, 2024:

‐The discount rate was changed from 4.63% to 3.88%.

‐The rates of salary increases, retirement, withdrawal, and disability were updated based on the experience study, dated September 29, 2023, done for the

City's pension plan.

‐Per capita costs and premiums were updated based on information provided.

‐The healthcare cost trend assumption was updated.

The following benefit change has been reflected in the Schedule of Changes in the Total OPEB Liability for the measurement period ending September 30, 2024:

‐ Ordinance No. 9620‐22 reduced the service requirements for Non‐Hazardous

Duty members to become 100% vested from 10 years to 5 years of Credited

Service.

Refer to page F‐10 of this report for additional comments regarding changes in assumptions and benefits and their impact on the Total OPEB Liability.

City of Clearwater OPEB for FYE 9/30/2024 B‐3

Statement of OPEB Expense

Employer Fiscal Year Ended September 30, 2024 (Based on Measurement Year Ending September 30, 2024)

OPEB Expense

1. Service Cost 1,672,642$

2. Interest on the Total OPEB Liability 1,173,208

3. Current‐Period Benefit Changes 36,283

4. OPEB Plan Administrative Expense 0

5. Recognition of Outflow/(Inflow) of Resources due to Liabilities (2,610,755)

6. Total OPEB Expense 271,378$

Recognition of Deferred Outflows and Inflows of Resources

Differences between expected and actual experience and changes in assumptions are recognized in OPEB expense using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees that are provided with OPEB through the OPEB plan (active employees and inactive employees) determined as of the beginning of the measurement period.

At the beginning of the current measurement period, the average of the expected remaining service lives for purposes of recognizing the applicable deferred outflows and inflows of resources established in the current measurement period is 7.4 years.

City of Clearwater OPEB for FYE 9/30/2024 B‐4

Statement of Outflows and Inflows Arising from Current Reporting Period

(Based on Measurement Year Ended September 30, 2024)

A. Outflows/(Inflows) of Resources due to Liabilities

1. Difference between expected and actual experience of the Total OPEB Liability

(gains) or losses (4,896,063)$

2. Changes in assumptions and other inputs (gains) or losses (572,816)$

3. Recognition period for Liabilities: Average of the expected remaining service lives of all employees {in years} 7.4

4. Outflow/(Inflow) of Resources to be recognized in the current OPEB expense for the difference between expected and actual experience of the Total OPEB Liability (1 ÷ 3) (661,630)$

5. Outflow/(Inflow) of Resources to be recognized in the current OPEB expense for changes in assumptions and other inputs (2 ÷ 3) (77,408)$

6. Outflow/(Inflow) of Resources to be recognized in the current OPEB expense due to Liabilities (4 + 5) (739,038)$

7. Deferred Outflow/(Inflow) of Resources to be recognized in future OPEB expenses for the difference between expected and actual experience of the Total OPEB Liability (1 ‐ 4) (4,234,433)$

8. Deferred Outflow/(Inflow) of Resources to be recognized in future OPEB expenses for changes in assumptions and other inputs (2 ‐ 5) (495,408)$

9. Deferred Outflow/(Inflow) of Resources to be recognized in future OPEB expenses due to Liabilities (7 + 8) (4,729,841)$

City of Clearwater OPEB for FYE 9/30/2024 B‐5

Statement of Outflows and Inflows Arising from Current and Prior Reporting Periods

Outflows Inflows Net Inflows of Resources of Resources of Resources

1. Differences between expected and actual experience 0$ 2,109,972$ (2,109,972)$

2. Changes in assumptions and other inputs 646,186 1,146,969 (500,783)

3. Total 646,186$ 3,256,941$ (2,610,755)$

Deferred Outflows Deferred Inflows Net Deferred Inflows of Resources of Resources of Resources

1. Differences between expected and actual experience 0$ 8,212,315$ (8,212,315)$

2. Changes in assumptions and other inputs 129,240 2,818,608 (2,689,368)

3. Total 129,240$ 11,030,923$ (10,901,683)$

Year Ending Net Deferred Inflows

September 30 of Resources

2025 (3,094,496)$

2026 (2,348,201)

2027 (1,760,955)

2028 (1,746,751)

2029 (908,945)

Thereafter (1,042,335)

Total (10,901,683)

B. Deferred Outflows and Deferred Inflows of Resources by Source to be Recognized in Future OPEB Expenses

C. Deferred Outflows and Deferred Inflows of Resources by Year to be Recognized in Future OPEB Expenses

A. Outflows and Inflows of Resources by Source to be Recognized in Current OPEB Expense

City of Clearwater OPEB for FYE 9/30/2024 B‐6

Statement of Remaining Deferred Outflows and Inflows of Resources

Date Recognition Original Years

Amount

Unrecognized

Amount

Recognized in

Amount

Deferred to

Established Source Period (years) Amount Remaining Beg. of Period Current Expense Future Periods

9/30/2019 Assumption Changes 6.2 4,006,356$ 1.2 775,426$ 646,186$ 129,240$

SUBTOTAL: 4,006,356 775,426 646,186 129,240

9/30/2018 Assumption Changes 6.2 (1,029,325)$ 0.2 (33,205)$ (33,205)$ ‐

9/30/2020 Assumption Changes 6.4 (4,692,393) 2.4 (1,759,649) (733,186) (1,026,463)

9/30/2020 Liability Experience 6.4 (4,646,689) 2.4 (1,742,509) (726,045) (1,016,464)

9/30/2021 Assumption Changes 6.8 (120,728) 3.8 (67,466) (17,754) (49,712)

9/30/2022 Assumption Changes 7.1 (1,481,029) 5.1 (1,063,837) (208,596) (855,241)

9/30/2022 Liability Experience 7.1 (5,128,309) 5.1 (3,683,715) (722,297) (2,961,418)

9/30/2023 Assumption Changes 7.1 (545,424) 6.1 (468,604) (76,820) (391,784)

9/30/2024 Assumption Changes 7.4 (572,816) 7.4 (572,816) (77,408) (495,408)

9/30/2024 Liability Experience 7.4 (4,896,063) 7.4 (4,896,063) (661,630) (4,234,433)

SUBTOTAL: (23,112,776) (14,287,864) (3,256,941) (11,030,923)

GRAND TOTAL: (19,106,420) (13,512,438) (2,610,755) (10,901,683)

Deferred Outflows of Resources

Deferred Inflows of Resources

City of Clearwater OPEB for FYE 9/30/2024 B‐7

For plans that do not have formal assets, the discount rate should equal the tax‐exempt municipal bond rate based on an index of 20‐year bonds with an average AA credit rating as of the measurement date. For the purpose of this valuation, the municipal bond rate is 3.88% (based on the daily rate closest to but not later than the measurement date of the Fidelity Investments’ “20‐Year Municipal AA Index”). The discount rate was 4.63% as of the beginning of the measurement year.

Plan Assets

There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

Summary of Membership Information

The following table provides a summary of the number of participants in the plan as of the valuation date:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits 536

Inactive Plan Members Entitled to But Not Yet Receiving Benefits 91

Active Plan Members 1,622

Total Plan Members 2,249

City of Clearwater OPEB for FYE 9/30/2024 B‐8

Sensitivity of Total OPEB Liability to the Discount Rate Assumption

Regarding the sensitivity of the total OPEB liability to changes in the discount rate, the following presents the plan’s total OPEB liability, calculated using a discount rate of 3.88%, as well as what the plan’s total OPEB liability would be if it were calculated using a discount rate that is one percent lower or one percent higher:

Current Discount

1% Decrease Rate Assumption 1% Increase

2.88% 3.88% 4.88%

$ 22,609,791 $ 20,623,609 $ 18,819,206

Sensitivity of Total OPEB Liability to the Healthcare Cost Trend Rate Assumption

Regarding the sensitivity of the total OPEB liability to changes in the healthcare cost trend rates, the following presents the plan’s total OPEB liability, calculated using the assumed trend rates as well as what the plan’s total OPEB liability would be if it were calculated using a trend rate that is one percent lower or one percent higher:

Current Healthcare Cost

1% Decrease Trend Rate Assumption 1% Increase

$ 17,966,662 $ 20,623,609 $ 23,872,583

SECTION C

SUMMARY OF SUBSTANTIVE PLAN PROVISIONS

City of Clearwater OPEB for FYE 9/30/2024 C‐1

Summary of Substantive Plan Provisions as of January 1, 2024

Eligibility for Retiree Benefits

Any employee of the City of Clearwater who satisfies the Vesting, Disability, Early or Normal Retirement provisions of the applicable Pension Plans may be eligible for certain post‐employment benefits. The following presents the eligibility requirements for retirement under the City of Clearwater Employees’ Pension Plan.

VESTED TERMINATION Full vesting starts after 10 years of credited service for Hazardous Duty and 5 years of credited service for Non‐Hazardous Duty. When vesting requirements with the City have been met, retiree health coverage may commence immediately upon attainment of pension benefit eligibility.

DISABILITY RETIREMENT Non‐duty disability pension after 10 years creditable service. For duty disability, there is no service credit requirement.

SURVIVORSHIP Survivor becomes eligible when employment is terminated by death for any actively employed participant.

EARLY RETIREMENT Hazardous Duty: age 50 with 10 years of creditable service.

NORMAL RETIREMENT Non‐Hazardous Duty (if hired prior to January 1, 2013): Earlier of (i) the attainment of age 55 with 20 years of creditable service, or (ii) the attainment of age 65 with 10 years of creditable service, or (iii) 30 years of creditable service, regardless of age.

Non‐Hazardous Duty (if hired on or after January 1, 2013): Earlier of (i) the attainment of age 60 with 25 years of creditable service, or (ii) the attainment of age 65 with 5 years of creditable service.

Hazardous Duty: Earlier of (i) the attainment of age 55 with 10 years of creditable service, or (ii) 20 years of creditable service, regardless of age.

Eligibility requirements for retirement under the 401(a) Defined Contribution Plan are as follows:

DEFINED CONTRIBUTION Meeting applicable requirements for Social Security benefits upon accrual of at PLAN least 5 years of creditable service with the City.

Other Post‐Employment Benefits

Certain Other Post‐Employment Benefits (OPEB) are available to all employees retiring from the City under the provisions of Disability, Early or Normal Retirement, as described above. The OPEB benefits include lifetime access to coverage for the retiree and dependents under the Medical, Prescription and Life Insurance Plans as well as optional participation in the voluntary dental, vision and supplemental insurance plans sponsored by the City for employees.

City of Clearwater OPEB for FYE 9/30/2024 C‐2

Health‐Related Benefits

Eligible retirees may choose among the same Medical Plan options available for similarly situated active employees of the City. Dependents of retirees may be covered at the retiree’s option the same as dependents of active employees. Prescription Drug coverage is automatically extended to retirees and their dependents who continue coverage under any one of the Medical Plan options. Covered retirees and their dependents under age 65 are subject to all the same Medical and Prescription benefits and rules for coverage as are active employees. As our plan is designed to pay secondary for all Medicare eligible retirees and dependents, it is recommended that all retirees and their dependents over the age of 65 enroll in Medicare Part B. Regardless of Medicare enrollment status, the City’s plan will pay secondary post age 65. Exception will be made to a group of grandfathered retirees who are not eligible for Medicare benefits. The plan will pay as a primary payer for claims incurred by such retirees.

Results presented in this report are based on the healthcare plan design in effect as of January 1, 2024.

Retiree Contributions for Medical/Prescription Benefits

In order to begin and maintain retiree Medical/Prescription coverage, premium contributions are required from the retiree. For dependent coverage, the retiree is required to pay a premium as well. If any required amounts are not paid timely, the coverage for the retiree and/or the dependent(s) will cease. The amount of the contributions required for retiree and dependent coverage may change from time to time.

The chart below summarizes the current total monthly contribution amounts required from retirees and their spouses to maintain medical/prescription coverage. The stated policy is that premium contribution required from retirees is equal to the blended group rate. Coverage for children of retirees is available (until their limiting age). However, for measuring the long‐term costs, the relatively few children covered by retirees coupled with the short duration of their coverage remaining results in costs that are not material in the long term.

Consequently, only spouses are included in the chart below.

Plan Base PPO

Retiree $ 917.90

Retiree + 1 Dependent $ 1,572.78

Retiree + Family $ 2,580.70

Monthly Premiums as of January 1, 2024

Survivorship Benefits

The surviving spouse of a retiree is eligible to continue coverage under the group plan but must pay the premium applicable to an individual retiree (not a spouse). Non‐line of duty death: if an active employee dies upon vesting under the pension plan and the spouse is eligible for a survivor pension, the surviving spouse will be eligible for the retiree benefits that the employee would have been eligible for if death had not occurred.

Line‐of‐duty death for Hazardous Duty employees: medical benefits will be paid at 100% for the surviving spouse and dependents as long as they meet eligibility requirements.

City of Clearwater OPEB for FYE 9/30/2024 C‐3

Disabled Retirees Premium Contributions

Members eligible for disability retirement are subject to premium payments the same as all regular retirees. An exception is made to Firefighters and Police Officers who had sustained catastrophic injuries in the line of duty.

Premiums for health coverage of such firefighters, police officers, their spouses and any dependent children will be paid by the City as prescribed by the Florida Statutes Sections 112.191(2)(g)1 and 112.19(2)(h)1 respectively (first introduced as the Alu‐O'Hara Public Safety Act).

In accordance with Florida Senate Bill 426, Firefighters employed full‐time who are diagnosed with cancer (and who have been employed by the Employer for at least five years) are entitled to timely reimbursements from the Employer for any out‐of‐pocket deductible, copayment or coinsurance costs incurred due to the treatment of cancer, as an alternative to pursuing workers compensation benefits. This reimbursement benefit is continued for a period up to 10 years following termination of employment provided the member enrolls in the retiree health insurance program. While not treated as an OPEB for this purpose, such Firefighters are also entitled one‐time cash payouts of $25,000, upon initial diagnosis of cancer. For more details, refer to Ch.

112.1816, F.S.

Dental, Vision and Supplemental Insurance Plans

Dental, vision and supplemental insurance benefits for retirees and their dependents are fully paid by the retiree, as they are for employees and their dependents. Consequently, these benefits are not considered as other post‐employment benefits for the purposes of GASB Statement No. 75.

COBRA Benefits

Former employees, retirees and dependents may be eligible for an extended benefit under COBRA, regardless of the terms of the employer’s other post‐employment benefits. COBRA benefits are not considered as other post‐ employment benefits for the purposes of GASB Statement No. 75.

Life Insurance

The City provides life insurance with face amount of $1,000 to retirees who retired before October 1, 2008 at no cost to the retiree. This is considered as other post‐employment benefits for the purposes of GASB Statement No. 75. There is no life insurance provided to employees retiring on or after October 1, 2008.

Funding Vehicle

There is no separate trust through which benefits for retirees are funded. No assets are currently accumulated or earmarked for this purpose. All approved benefits are paid by the City when due.

Termination and Amendment

The post‐employment benefits are extended to retirees and continued at the discretion of the City, which reserves the right (subject to State Statute and any collective bargaining agreements) to change or terminate benefits and to change premium contributions required from retirees in the future as circumstances change.

Significant Changes After January 1, 2024

There have been no significant changes (other than premium rate increases) in any health benefits or life insurance benefits since January 1, 2024 and through September 30, 2024.

SECTION D

DEVELOPMENT OF INITIAL PER CAPITA COSTS

City of Clearwater OPEB for FYE 9/30/2024 D‐1

Development of Initial Per Capita Costs

By offering medical coverage to employees, retirees and their dependents, the Employer assumes the responsibility for the total claims and other costs incurred by plan members. These costs are partially offset by contributions from employees and retirees. While the total premium amounts charged for covering employees and retirees and their dependents is the same without regard to the age or gender of the member, the true costs of medical and prescription coverage in any given year, depends on these factors. As the ages of employees, retirees and dependents in the covered population increase, so do their costs of benefits.

The table and the graph below illustrate the expected initial monthly Per Capita Costs (PCC) applicable to current retirees in the coming year.

Sample Sample

Ages Ages

45 807.53$ 1,114.49$ 65 897.76$ 846.76$

50 1,051.49 1,295.34 70 977.98 946.35

55 1,383.65 1,510.74 75 1,050.37 1,024.93

59 1,701.00 1,701.00 80 1,102.68 1,083.40

60 1,787.05 1,759.63 85 1,110.70 1,123.79

64 2,173.11 2,050.82 90 1,090.12 1,135.04

Initial Monthly Per Capita Cost By Age/Sex

Medicare Not Eligible Retirees Medicare Eligible Retirees

Male Female Male Female

For clarity, premium contributions applicable to a spouse are not presented on the graph below. The spread between the Per Capita Cost and the premium actually collected from the retiree is the expected monthly cost borne by the Employer when providing medical coverage to a particular retiree.

$500

$1,000

$1,500

$2,000

$2,500

$3,000

50 55 60 65 70 75 80 85 90

Member's Current Age

Expected Monthly Per Capita Cost

For Retirees/Spouses in the Next Valuation Year

Male w/ Medicare PCC Female w/ Medicare PCC Full Blended Premium Rate

Male w/out Medicare PCC Female w/out Medicare PCC

City of Clearwater OPEB for FYE 9/30/2024 D‐2

The amounts of Per Capita Costs illustrated on the previous page have been developed by employing the morbidity tables discussed below. The table shows select values of age grading factors reflecting rates at which medical costs increase with age of the member. The age grading factors have been developed based on the results of the study published (June 2013) in Health Care Costs – From Birth to Death sponsored by the Society of Actuaries and authored by Mr. Dale H. Yamamoto. These percentages are separate from the annual Trend, which operates to increase costs independent of and in addition to the Aging Factors. For example, in any single year a group of 61‐year old males are expected to cost 5.02% more than a group of 60‐year old males.

Sample Sample

Ages Ages

30 4.80% 3.74% 65 1.68% 2.46%

35 4.45% ‐0.32% 70 1.72% 1.89%

40 4.42% 0.44% 75 1.07% 1.20%

45 4.89% 2.34% 80 0.62% 0.97%

50 5.81% 3.46% 85 ‐0.37% 0.36%

55 5.44% 2.84% 90 ‐0.28% ‐0.14% 60 5.02% 3.66% 95 ‐0.38% ‐2.21%

Medical/Rx Cost Increase By Age

Male Female Male Female

The total cost expected (based on claims and other costs for the self‐insured health plan) for the entire covered population was allocated by age/sex, based upon the age/sex distribution of all plan members and the morbidity tables above. This procedure resulted in a table of age/sex‐specific initial Per Capita Costs for the coming year.

These calculations were based upon the benefits provided under the plan options available to employees and retirees as of the Valuation Date.

In the development of the PCC amounts, retirees and dependents age 65 and older are assumed to be Medicare‐eligible. The “% of Total Claims Paid by Medicare” is an assumption regarding whether the core plan or Medicare pays as primary for Medicare‐eligible retirees and dependents. According to the Summary of Substantive Plan Provisions, the plan does not require Medicare‐eligible members continuing coverage in the core plan to enroll in Medicare Part B, however, post‐65 medical coverage is secondary to Medicare for all retirees and dependents who are eligible for Medicare. In our work, we assume that the employer’s cost for a claim incurred by a Medicare eligible retiree is lower than the cost of the same claim incurred by a retiree who is not eligible for Medicare benefits. We are referring to that offset as “% of Total Claims Paid by Medicare” although some of it may be paid by a retiree. Retirees who prove that they are not eligible for any Medicare benefits are eligible to continue coverage under the plan with all claims paid by the plan, subject to standard copayment and coinsurance rules.

Furthermore, we are recognizing the fact, that healthy retirees are less likely to select the medical coverage when required to pay a full blended premium. The impact of this phenomenon is usually less when retirees are offered direct subsidies and continuation of medical coverage is more common among retirees. This adjustment is made through application of the “Anti‐selection Load” presented below.

Anti‐selection Load 15%

% of Total Claims Paid by Medicare* 60%

Additional Factors used in PCC Development

*Not all City retirees are eligible for Medicare benefits; refer to discussion of Medicare Benefits under the Health Coverage Assumptions in Section F.

City of Clearwater OPEB for FYE 9/30/2024 D‐3

The Monthly Per Capita Costs (PCC) by age and sex represent the costs of coverage after taking out deductibles, coinsurance, co‐pays, and Medicare payments, but before applying any monthly retiree contributions (premiums) charged for coverage. The Medicare Part D subsidy, if any, has not been given any consideration, since it may not be used to offset the OPEB obligation.

Amounts for each age/sex combination for this Valuation were developed based on census data for all participants of the Health Care Plan and on the total expected claims and other costs incurred by all members of the plan.

Expected Per Capita Costs applicable to retirees who retire under disability provisions are assumed to be the same as for all other similarly situated retirees. Although disabled retirees are generally more expensive to cover, some of such retirees may qualify for benefits under the Medicare program, which offsets the increased costs. We did not assess the relative magnitude of these factors but given the fact that they offset each other combined with a relatively low incidence of disability retirements, we believe that overall materiality of this aspect does not warrant more detailed analysis. Consequently, all retirees are subjected to the same model regardless of disability status.

The number of subscribers included in the Actuarial Valuation may be slightly different from the number used to develop the Per Capita Costs. The present distribution of subscribers for the purpose of Per Capita Cost Development is summarized below.

Coverage Single Family/Spouse Single Family/Spouse Single Family/Spouse

Base PPO 1,146 391 37 13 13 4

Retired ‐ Over 65

Number of Subscribers

Active/COBRA Retired ‐ Under 65

SECTION E

SUMMARY OF PARTICIPANT DATA

City of Clearwater OPEB for FYE 9/30/2024 E‐1

Summary of Participant Data

0‐4 5‐9 10‐14 15‐19 20‐24 25‐29 30 & Up Total

0 ‐ 14 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

15 ‐ 19 4 ‐ ‐ ‐ ‐ ‐ ‐ 4

20 ‐ 24 75 ‐ ‐ ‐ ‐ ‐ ‐ 75

25 ‐ 29 140 26 ‐ ‐ ‐ ‐ ‐ 166

30 ‐ 34 130 87 10 ‐ ‐ ‐ ‐ 227

35 ‐ 39 78 66 36 23 1 ‐ ‐ 204

40 ‐ 44 60 49 24 49 11 ‐ ‐ 193

45 ‐ 49 47 32 23 52 42 7 ‐ 203

50 ‐ 54 54 28 22 34 35 21 3 197

55 ‐ 59 32 16 16 25 22 30 7 148

60 ‐ 64 37 29 20 22 18 12 5 143

65 ‐ 69 8 4 5 8 10 12 1 48

70 ‐ 74 5 2 1 ‐ 1 ‐ ‐ 9

75 ‐ 99 1 1 ‐ 1 ‐ ‐ 2 5

671 340 157 214 140 82 18 1,622 Total

Age Group

Years of Service to Valuation Date ‐ Active Employees

Male Female Male Female Total*

0 ‐ 44 ‐ ‐ ‐ ‐ 27

45 ‐ 49 ‐ ‐ ‐ ‐ 21

50 ‐ 54 2 1 ‐ ‐ 29

55 ‐ 59 10 1 1 2 23

60 ‐ 64 21 12 24 3 68

65 ‐ 69 11 2 36 10 56

70 ‐ 74 2 2 115 20 137

75 ‐ 79 1 1 119 23 143

80 ‐ 84 1 ‐ 47 14 61

85 ‐ 89 ‐ ‐ 33 9 42

90 ‐ 94 ‐ ‐ 14 5 19

95 ‐ + ‐ ‐ 1 ‐ 1

48 19 390 86 627

Health Coverage Life Insurance

Current Inactives with Medical Coverage and/or Life Insurance

Age Group

Total

*Includes Vested Terminated Participants Eligible for Future Health Coverage.

City of Clearwater OPEB for FYE 9/30/2024 E‐2

Male Female Male Female Male Female

0 ‐ 44 ‐ ‐ 17 10 17 10

45 ‐ 49 ‐ ‐ 14 7 14 7

50 ‐ 54 2 1 17 9 19 10

55 ‐ 59 11 3 4 5 15 8

60 ‐ 64 45 15 3 5 48 20

65 ‐ 69 45 11 ‐ ‐ 45 11

70 ‐ 74 116 21 ‐ ‐ 116 21

75 ‐ 79 120 23 ‐ ‐ 120 23

80 ‐ 84 47 14 ‐ ‐ 47 14

85 ‐ 89 33 9 ‐ ‐ 33 9

90 ‐ 94 14 5 ‐ ‐ 14 5

95 ‐ + 1 ‐ ‐ ‐ 1 ‐

434 102 55 36 489 138

All Inactives

Inactive Participants with Current Health or Life Insurance Coverage or Eligible for Future Health

Coverage

Age Group

Current Retirees Vested Terminated

SECTION F

ACTUARIAL ASSUMPTIONS AND METHODS

City of Clearwater OPEB for FYE 9/30/2024 F‐1

Actuarial Assumptions and Methods

Actuarial Valuation Date: January 1, 2024 for employee and retiree population purposes, for development of per capita cost purposes, and for valuation purposes.

Actuarial Cost Method: Individual Entry Age Normal Cost Method with an increasing Normal Cost pattern consistent with the salary increase assumptions.

Discount Rate: Under GASB Statement No. 75, when there are currently no invested plan assets held in trust to finance the OPEB obligations, the discount rate equals the tax‐exempt municipal bond rate based on an index of 20‐year bonds with an average AA credit rating as of the measurement date. For the purpose of this valuation, the municipal bond rate is 3.88% (based on the daily rate closest to but not later than the measurement date of Fidelity Investments’ “20‐Year Municipal AA Index").

Mortality Tables: Mortality tables are used to measure the probabilities of participants dying before and after retirement. The mortality tables are based on the PUB‐ 2010 Headcount Weighted Mortality Tables, with mortality improvements projected for healthy lives to all future years after 2010 using Scale MP‐ 2018.

Healthy Mortality ‐ Regular Class

Pre‐Retirement PUB‐2010 Table

Post‐Retirement PUB‐2010 Table

Female Headcount Weighted General Below Median Employee Female Table

Headcount Weighted General Below Median Healthy Retiree Female Table

Male Headcount Weighted General Below Median Employee Male Table, set back 1 year

Headcount Weighted General Below Median Healthy Retiree Male Table, set back 1 year

Healthy Mortality – Special Risk Class

Pre‐Retirement PUB‐2010 Table

Post‐Retirement PUB‐2010 Table

Female Headcount Weighted Safety Employee Female Table, set forward 1 year

Headcount Weighted Safety Healthy Retiree Female Table, set forward 1 year

Male Headcount Weighted Safety Below Median Employee Male Table, set forward 1 year

Headcount Weighted Safety Below Median Healthy Retiree Male Table, set forward 1 year

City of Clearwater OPEB for FYE 9/30/2024 F‐2

Disabled Mortality

Regular Class PUB‐2010 Table

Special Risk Class PUB‐2010 Table

Female Headcount Weighted General Disabled Retiree Female Table, set forward 3 years

80% Headcount Weighted General Disabled Retiree Female Table; 20% Headcount Weighted Safety Disabled Retiree Female Table

Male Headcount Weighted General Disabled Retiree Male Table, set forward 3 years

80% Headcount Weighted General Disabled Retiree Male Table; 20% Headcount Weighted Safety Disabled Retiree Male Table

Rates of Disability: Disability rates are used to measure the probabilities of active participants becoming disabled. 100% of disabilities are assumed to be service‐ connected. The tables below present disability rates for select ages and are the same as used in the January 1, 2024 actuarial valuation of the City of Clearwater Employees’ Pension Plan.

Firefighters Police

Officers Males Females

20 0.22% 0.30% 20 0.001% 0.001%

25 0.22% 0.30% 25 0.011% 0.011%

30 0.22% 0.30% 30 0.011% 0.011%

35 0.26% 0.35% 35 0.011% 0.011%

40 0.40% 0.52% 40 0.021% 0.021%

45 0.52% 0.72% 45 0.041% 0.041%

50 0.52% 0.72% 50 0.082% 0.082%

55 0.52% 0.72% 55 0.165% 0.165%

60 0.68% 0.87% 60 0.216% 0.216%

65 0.88% 1.10% 65 0.041% 0.041%

70 1.20% 1.50% 70 0.041% 0.041%

Non‐Hazardous Duty Disability

Sample

Ages

% of Active Members

Becoming Disabled

Within Next Year Sample

Ages

% of Active Members

Becoming Disabled

Within Next Year

Hazardous Duty Disability

City of Clearwater OPEB for FYE 9/30/2024 F‐3

Rates of Termination from These rates do not apply to participants eligible to retire and do not reflect Active Employment: separation on account of death or disability. Termination rates are used to measure the probabilities of participants terminating employment for other reasons. The following table shows termination rates for select ages. These tables are the same as used in the January 1, 2024 actuarial valuation of the City of Clearwater Employees’ Pension Plan.

Under 2 Under 30 8.0% All Years Under 40 5.0%

30 & Over 4.0% 40 & Over 2.0%

2 ‐ 4 Under 30 5.0%

30 & Over 3.0%

5 & Over Under 30 8.0%

30 & Over 1.8%

Years of

Service Age

% of Active

Members

Separating Within

Next Year

Years of

Service Age

% of Active

Members

Separating Within

Next Year

Under 1 All Ages 20.0% Under 1 Under 40 25.0%

40 & Over 12.5%

1 ‐ 2 All Ages 18.0%

1 ‐ 2 All Ages 17.0%

3 ‐ 4 All Ages 12.0%

3 ‐ 4 All Ages 12.0%

5 ‐ 9 Under 35 9.0%

35 ‐ 44 6.0% 5 ‐ 9 Under 40 9.0%

45 ‐ 54 5.0% 40 ‐ 54 7.0%

55 & Over 3.5% 55 ‐ 59 4.0%

60 & Over 3.0%

10 & Over Under 35 5.0%

35 ‐ 44 3.3% 10 & Over Under 45 6.0%

45 & Over 3.1% 45 ‐ 54 3.5%

55 & Over 3.0%

Years of

Service Age

% of Active

Members

Separating Within

Next Year

Firefighter Withdrawal ‐ Females

Years of

Service Age

% of Active

Members

Separating Within

Next Year

Firefighter Withdrawal ‐ Males

Non‐Hazardous Duty Withdrawal ‐ FemalesNon‐Hazardous Duty Withdrawal ‐ Males

City of Clearwater OPEB for FYE 9/30/2024 F‐4

Under 3 Under 30 7.5% Under 2 All Ages 14.0%

30 & Over 4.0%

2 ‐ 3 All Ages 6.0%

3 ‐ 4 Under 30 5.5%

30 & Over 3.5% 5 & Over All Ages 3.9%

5 & Over Under 30 3.5%

30 & Over 2.6%

Police Officer Withdrawal ‐ Males Police Officer Withdrawal ‐ Females

Years of

Service Age

% of Active

Members

Years of

Service Age

% of Active

Members

General Price Inflation: Long‐term general price inflation is assumed to be 2.50% per year.

Salary Increases: These Rates are used to measure changes in salary. Salary increase rates are shown in the following table and are the same as used in the January 1, 2024 actuarial valuation of the City of Clearwater Employees’ Pension Plan.

Under 5 5.35% 2.40% 7.75% Under 2 5.60% 2.40% 8.00%

5 ‐ 14 4.00% 2.40% 6.40% 2 ‐ 9 3.60% 2.40% 6.00%

15 ‐ 19 2.85% 2.40% 5.25% 10 ‐ 14 3.35% 2.40% 5.75%

20 & Over 2.00% 2.40% 4.40% 15 ‐ 19 2.60% 2.40% 5.00%

20 & Over 1.10% 2.40% 3.50%

Years of

Service

Merit and

Seniority

Base

(Inflation)

Total

Increase

Under 5 6.60% 2.40% 9.00%

5 ‐ 9 3.85% 2.40% 6.25%

10 ‐ 14 2.60% 2.40% 5.00%

15 & Over 1.35% 2.40% 3.75%

% Increase in Salary ‐ Police Officers

% Increase in Salary ‐ Non‐Hazardous Duty

Years of

Service

Merit and

Seniority

Base

(Inflation)

Total

Increase

% Increase in Salary ‐ Firefighters

Years of

Service

Merit and

Seniority

Base

(Inflation)

Increase

Rates of Retirement: These rates are used to measure the probabilities of eligible members retiring during the next year. Rates presented below are applicable to Hazardous and Non‐Hazardous eligible for Normal Retirement or Early Retirement. Salary increase rates are shown in the following table and are the same as used in the January 1, 2024 actuarial valuation of the City of Clearwater Employees’ Pension Plan.

City of Clearwater OPEB for FYE 9/30/2024 F‐5

10 ‐ 19 50 ‐ 54 5.0% 5 ‐ 9 65 ‐ 74 20.0%

55 ‐ 59 15.0% 75 & Over 100.0%

60 & Over 40.0%

10 ‐ 19 65 ‐ 74 30.0%

20 ‐ 24 Under 59 15.0% 75 & Over 100.0%

60 ‐ 64 40.0%

65 & Over 100.0% 20 ‐ 29 55 ‐ 59 20.0%

60 ‐ 64 15.0%

25 ‐ 29 Under 55 15.0% 65 ‐ 69 30.0%

55 ‐ 59 35.0% 70 & Over 100.0%

60 ‐ 64 40.0%

65 & Over 100.0% 30 & Over Under 55 30.0%

55 ‐ 64 20.0%

30 & Over All Ages 100.0% 65 ‐ 69 50.0%

70 & Over 100.0%

10 ‐ 19 50 ‐ 54 5.0%

55 ‐ 59 8.0%

60 ‐ 64 20.0%

65 & Over 100.0%

20 ‐ 29 Under 50 12.0%

50 ‐ 59 20.0%

60 ‐ 64 40.0%

65 & Over 100.0%

30 ‐ 34 Under 55 20.0%

55 ‐ 59 30.0%

60 & Over 100.0%

35 & Over All Ages 100.0%

Non‐Hazardous Duty Retirement

Years of Service Age Probability of Retirement Years of Service Age Probability of Retirement

Hazardous Duty Retirement ‐ Police Officers

Years of Service Age Probability of Retirement

Hazardous Duty Retirement ‐ Firefighters

City of Clearwater OPEB for FYE 9/30/2024 F‐6

Health Coverage Assumptions

Coverage Acceptance Rates: Not everyone who retires will accept…