soil erosion technology

Dealing a Blow to Global Warming Soil is arguably the most prized component of agricultural ecosys-tems. Healthy soil drains well, is

rich in organic matter, and teems with life, including many beneficial microbes and insects. One of the most effective methods for developing healthy, produc- tive agricultural soil—which has impor- tant benefits for the environment as well—is the use of cover crops. A mainstay of organic farming sys- tems, cover crops (often grasses, legumes, or cereal grains such as rye and winter wheat) are not meant to be harvested but rather to stabilize and improve soil that would otherwise remain bare when crops for harvest and sale—“cash” crops—are not growing. Because they are often planted in fall, cover crops have been de- scribed as a winter blanket for soils, help- ing to reduce erosion and water runoff by buffering the soil from rain and wind. They also suppress weeds and increase the soil’s water-holding properties, thereby improving the ability of cash crops to withstand drought. And when cover crops are plowed under in the spring, their organic matter improves soil struc- ture to enhance drainage and root growth, and provides nutrients for both the sub-

Cover Crops and public health in a number of ways. For example, nitrogen overuse in agriculture is the largest domestic, human- caused source of nitrous oxide, a global warming gas nearly 300 times more potent than carbon dioxide. Addition- ally, nitrogen runoff or leaching from farms in the Mississippi River watershed is the largest contributor to the Gulf of Mexico’s “dead zone”—an area the size of Connecticut and Delaware combined, where algae that flourish in conditions of excess nitrogen start a cycle that robs the water of oxygen, making it uninhabitable for fish and other marine life. Nitrogen in the form of nitrate can also become a threat to human health when it seeps into drinking water. And finally, airborne ammonia (formed from the nitrogen in fertilizer) contributes to smog, respiratory diseases, and acid soil. In response to mounting nitrogen pollution, the biotechnology industry has suggested that it could genetically engi- neer crops to use nitrogen fertilizer more efficiently. But a recent UCS report, No Sure Fix, found that this technology has yet to produce any nitrogen-efficient crops, and the prospects of it happening in the foreseeable future are uncertain.

h ow i t w o r k s

sequent cash crop and a wide variety of beneficial organisms. Among the most useful cover crops are legumes (e.g., beans, peas, vetches, clovers), which provide significant amounts of nitrogen to subsequent crops naturally, reducing the need for synthetic fertilizers. They do this by “fixing” nitrogen—con- verting it from the abundant but unus- able form in the atmosphere into forms that plants can use—through a symbiotic partnership with common soil bacteria (see the sidebar, p. 14). When the cover crop is plowed under, microbes break down its molecules, releasing nitrogen into the soil for use by the subsequent cash crop. In this way, leguminous cover crops can sup- ply most or all of the nitrogen needed for subsequent crops to produce high yields, allowing farmers to substantially reduce— or even eliminate—their use of synthetic nitrogen fertilizers, which cause serious pollution problems.

Reducing Pollution Plants are unable to absorb more than half of the nitrogen fertilizer currently applied on U.S. farms, and much of the excess leaves the soil. This excess ni- trogen threatens both the environment

C A T A L y S T l s P r i n G 2 0 1 0 l 1 3

Cover crops such as rye (left) and hairy vetch (right) help improve soil quality and prevent erosion on fields when crops for harvest and sale—“cash” crops—are not growing. When plowed under, cover crops provide nutrients for cash crops, allowing farmers to reduce or even eliminate chemical fertilizer use.

1 4 l u n i o n o f c o n c e r n e d s c i e n t i s t s

Learn more about solutions for reducing nitrogen pollu- tion on the ucs website at www.ucsusa.org/nosurefix.

8

h ow i t w o r k s

By contrast, advanced forms of tradi- tional breeding have produced crops that are more nitrogen efficient, and we also found significant evidence indicating that cover crops can greatly reduce nitrogen pollution. For example, in experiments in which cash crops fertilized with syn- thetic nitrogen were rotated with non- leguminous cover crops, the cover crop reduced nitrogen leaching by an average of 70 percent, without reducing cash crop yields. When cash crops were rotated with leguminous cover crops and no synthetic nitrogen fertilizer was added, the cover crop reduced leaching by 40 percent. Though cash crop yields fell an average of 7 to 10 percent in these cases, the ben- efits of building soil quality could out- weigh the loss in yield.

Maximizing the Benefits In addition to reducing fertilizer use and nitrogen pollution, cover crops can play an important role in reducing global warming pollution. As the crops grow, they remove heat-trapping carbon diox- ide from the atmosphere; when plowed under, the carbon in the plant is trans- ferred into the soil. Non-leguminous cov- er crops such as rye and winter wheat are particularly good at storing carbon be- cause they typically produce more bio- mass, or plant matter, than legumes. (More biomass also means more organic matter will be returned to the soil before cash crops are planted.) An ideal cover crop system would pro- vide the benefits of both legumes and non-legumes. One multi-year study found that hairy vetch and rye (a legume and non-legume, respectively) grown together yielded greater biomass and greater car- bon and nitrogen content compared with either one grown alone. Yields and nitro- gen uptake of some subsequent cash crops were also greater with this cover crop com- bination. Researchers are also looking at other legume/non-legume pairings. For

A Bacterium’s-Eye View of Cover Crops Underground, nature’s tiny nitrogen factories are at work.

Producing fertilizer with high nitrogen content requires an extremely energy- intensive industrial process—at least it does if you’re human. Certain soil- dwelling bacteria, on the other hand, can “fix” nitrogen (converting nitrogen gas in the atmosphere into ammonia, a form usable by plants) all by them- selves. And soil bacteria known as rhi- zobia have evolved to fix large quantities of nitrogen by working in partnership with leguminous plants during the growing season. The process begins when legumes release chemicals that stimulate the growth of rhizobia living in the soil around the plant roots. The bacteria then attach to the plant’s root hairs, which secrete compounds called flavonoids that activate “nod” genes in the bacteria. This, in turn, causes the rhizobia to excrete chemicals that curl the plant’s root hairs, allowing the bacteria to invade the plant and penetrate its root cells. The rapidly reproducing rhizobia induce the root cells to multiply, form- ing nodules that become visible to the naked eye within days. Each root nodule contains thousands of rhizobia that produce nitrogenase, an enzyme that catalyzes the transformation of nitrogen gas into ammonia that the plant uses to grow. Once the legume is plowed under, its organic matter and stored nitrogen become rich fodder for the cash crop planted in its wake.

example, cover crops in the Brassica fam- ily (e.g., mustard, radish) are deep-rooted and therefore useful for breaking up hard soils; combined with legumes, they might prove beneficial in soils that are both ni- trogen-deficient and heavily compacted. Cover crops do have limitations, and additional research is needed to maximize their potential for farmers. For example, cover crop growth depends on the weath- er; low rainfall or cold autumn tempera- tures can reduce their growth—and thus their benefits. And farmers will need in- centives and support to take on the seed and labor costs involved with growing them. Still, cover crops represent a major

underutilized opportunity to reduce ni- trogen pollution, combat global warm- ing, and build healthy, productive soils that will be good for American farmers and consumers alike.

Karen Perry Stillerman is a senior analyst in the Food and Environment Program.

Rhizobia-rich nodules on the root of a leguminous plant.

Photo: Pennsylvania state university/Jennifer dean

Copyright of Catalyst (1539-3410) is the property of Union of Concerned Scientists and its content may not be

copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written

permission. However, users may print, download, or email articles for individual use.

CUTBACK MANAGEMENT IN THE ST. CROIX: A RIF IN THE USDA

CUTBACK MANAGEMENT IN THE ST. CROIX: A RIF IN THE USDA 2

Public Policy Administration PUP 3002

Cutback Management in the St. Croix: A RIF in the USDA #1

April 2/2018

Cutback Management in the St. Croix: A RIF in the USDA

SCDC is faced with a potential lack of social support staff under the RIF orders from the Secretary of Agricultural. Political tension is also high concerning the laying off of more workers of USDA from Wisconsin side of St. Croix community.

The Issue

SCDC stands for St. Croix Development Commission, which was founded as an official arm for championing development in the St. Croix region. St Croix region is a community of four distinct neighboring counties. They include Norton County, Larch County, Apostle County, and Burnt County. These counties lie in separate states that are separated by St. Croix River. The Norton and Larch Counties lie to the west of the river in Minnesota while Apostle and Burnt Counties lie to the east of the river in Wisconsin. [View figure 1.]

Figure 1

The community of St. Croix was primarily an agricultural community until decades ago when President Jimmy Carter’s admission embarked on depleting dairy farming in the nation due to overproduction. Dairy farming was the main economic background of the region. However, through USDA, Carter guided the purchase of cattle from the St. Croix farmers leaving them with compensation to engage in other economic activities. As years would later prove, the economy of the region had dwindled, and there was a need to act purposely to save the region’s economy. Andy Bryce, an engineer and surveyor consultant in Larch City, proposed a unified approach where the four counties could embark on an integrated development plan that included all the four counties. The plan was simple. The county managers from each county would form a council called St. Croix Growth Council to deliberate and establish an organization to implement the desired developmental changes. The council began as a privately-owned entity but later led to the establishment of an official commission to further the objectives and vision of the commission. It led to the establishment of St. Croix Developmental Commission (SCDC), which comprised of the four county managers and two administrative personnel: a director of planning and a director of operations. The commission employed other professional and support staff. The integrated commission was finally complete. SCDC has a total of 79 permanent employees. The organizational structure is in figure 2.

Figure 2

Vision, funding, and support

The main aim of the establishment of SCDC predecessor organization was to exploit the environmental-resource endowed St. Croix region through exploiting or using already established agencies, organizations, and offices. The plan was to benefit from funding from the Environmental Protection Agency and the Corps of Engineers. It would also benefit from USDA that would provide projects and subsidies. The Small Business Administration would provide development grants. Finally, the Congressman would champion their efforts through legislation and politics. With all these organizations, agencies, and person working with and supporting SCDC, development was only a matter of time.

The challenge

An imminent problem was brewing, however. SCDC relied greatly on the USDA to accomplish its efforts. On the other hand, USDA was facing problems of its own. Since the St. Croix farmer sold their cattle to the USDA, the number of farmers in the region had steadily dropped while the population remained constant at 120,000. These people needed food, clothing, and income but their farming activity had fizzled out. To try and maintain the economy of the region afloat, USDA employed more people to the region to help with the allocation of reliefs. This strategy created a new problem. While the number of farmers was steadily decreasing, the number of USDA employees who primarily work with farmers was increasing. An imminent problem was brewing. Soon Washington would recognize the problem and deal with it in a way that would terrify the St. Croix people but specifically the SCDC and USDA. The number of the USDA would eventually need to be reduced.

As Roman Drnda, would put it, “Gentlemen and lady. Passed are days when congressmen and congresswomen would trade wars and words to protect the USDA jobs and offices in their districts. I am here with orders from above, from the Secretary of Agriculture him, to lay off some USDA employees. We are downsizing.”

Roman Drnda is the county coordinator of all the farm programs in a troubled area of the country. He had a vast history of agricultural profession and experience including working at the USDA’s headquarters in Washington before moving to his current position. In his current position, Drnda acted as the local spokesman, chief negotiator, and sometimes as the “hatchet man” for the Secretary of Agriculture himself, Nyby. In the case of St. Croix, Drnda was not in the region for the purpose of negotiating or representing the locals. He was here as the “hatchet man.” RIF orders had been given, and he was here to implement them, of course, with consultations with the local interests.

Stakeholders

The RIF potentially affected a wide range of stakeholders from the organizations themselves, to individual employees in these organizations, and the community in general. The stakeholder organizations included USDA and SCDC. The employees of USDA would be affected directly because some would be losing their jobs. SCDA employees would be affected by the fact that they could possibly lose the key workers in USDA that helped further the efforts and achievements of SCDC. The community would be negatively affected by retrenchment and compromised efforts of SCDC. The other key stakeholders included the managerial staff at SCDC, the bureaucrats in Agriculture ministry, and the political leaders of St. Croix.

* * *

“Yes, I have heard from my boss, Moe the congresswoman that you are here to lay off some people. She said that the Secretary of Agriculture has given a RIF order.” Dagmar Blaine said. He was talking to confirm what Drnda had said concerning the absence of horse-trading efforts to save agriculture anymore. The two were in a meeting called by Drnda. They were not alone. Drnda had invited five people in total to discuss the RIF. He had invited Anton Kurvaszy, who was the director Planning Director at SCDC. Kurvaszy was important in this meeting because any problems that affect agriculture in the region also affected the economic growth of the region, which is what his organization (SCDC) was championing. The second person was Dagmar Blaine who was representing the Congresswoman, Moe. The third was Chris Clairy who was representing the office of Wisconsin state senator, Ben Loffel. The fourth person was Guy Strumi. Guy Strumi was representing Walt March, a public-sector union leader, the AFGE (American Federation of Government Employees). Lastly, the SCDC planning director, Kurvaszy, had requested to bring along Mary Martengrove, who was his assistant at SCDC.

Stakeholder perspectives

Chris Clairy, the man representing state senator Loffel was impatient. He wanted to know what was exactly in the RIF order. He inquired from Drnda.

“We have to downsize by a third. At least I in every three will have to go,” Drnda said, indicating that the exact number of people to be RIFfed was not clear until the official communication from Nyby comes through. Drnda continued, “The retiring, the workers on probation, and those recently hired will be the first to go. The clericals and custodials as well. This reduces the total seventy-four to thirty-nine APTs. Now laying 1 out of 3 in the remaining thirty-nine makes the total number to go thirteen. However, seven in that groups are veterans and are thus protected by law. They cannot be bumped.”

APT refers to the higher administrative, professional, and technical jobs. Bumping refers to the person who would be preferred over another. Apparently, since seven of the thirty-nine APTs were protected veterans, the thirteen to be laid off would have to come from the remaining thirty-two APTs.

Drnda turned towards him and said, “The real problem is who will we let go and what sought of a workforce mix will be left. I have prepared a rough draft of the retention register indicating a suggested criterion for retaining and bumping the staff. I have put them all in one single competitive level. But, of course, the veterans cannot be bumped even if they are in the list” Drnda said handing each of them a worksheet.

Drnda had put the thirty-nine APTs into four categories, namely Veteran, F, A, and S. F stood for employees who spent time in the field with farmers giving them hands-on advice. A stood for administrative employees who specialized in office-based paperwork such as processing acreage-reduction subsidies and price-support. S stood for social workers as food stamp staff and WIC (women, infant, and children) counselors. He had further indicated each employee’s job location by state, years of service, and the average of the last three performance ratings on the standard federal civil service scale of 1 to 5. He also had indicated employees belonging to the Native Americans and other minority groups.

Kurvaszy was thinking. According to the federal rifting protocol, the competitive level should only comprise of people from the same department. For instance, an agricultural department cannot share the same competitive are or level. Drnda had categorized all the employees into one competitive level including the F, A, and S. These are different departments although they all fall under USDA. Secondly, the federal guidelines posit that employees can be put in the same competitive area on based on their position description and not personal qualifications. As such, only people with similar positions such as work schedule, same grade, or series can be put in the same competitive group provided that their position description shows that each can learn the key tasks of each other within 90 days to perform them. Kurvaszy wondered how A, F, and S groups could learn each other duties within 90 days. He was afraid that this could lead to a suit.

Kurvaszy, however, observed that Drnda criteria aligned with the federal guidelines in some areas. For instance, all the people put in the same competitive level should come from a definable geographical location. A definable geographical location entails a community area with that includes any population center and its surrounding communities in which people live and reasonably travel back and forth to work. The St. Croix region fit this criterion despite it comprising of Wisconsin and Minnesota populations.

Kurvaszy also observed that in the mandatory federal guidelines, tenure is more important than performance in determining the rank order for a layoff. As such, those who had worked for more years should bump (push other out of job why they remain in employment) those who have stayed for a lesser period on the job.

Kurvasky was suddenly jolted back to the meeting by Clairy exclamation, “Looking at this retention register, at least nine out of the thirteen to be eliminated is on the Wisconsin side. Why not split the competitive area into two: one for Wisconsin and one for Minnesota? Of course, the St. Croix region qualifies as a competitive area, but there is no law that prohibits making the competitive areas smaller, such as Wisconsin side and Minnesota side. That would make sure that employees from either side bumps employee from their side. That is the only fair way.”

Before Drnda could reply, Mary exclaimed looking even more agitated, “This retention criterion shows that those who have stayed in the job for many years will bump the new recruits. St. Croix is downsizing on agriculture. In fact, almost nobody practices agriculture anymore in St. Croix. And the people with tenure, those that have many years of service, are in the F category. They are bound to bump the S category because the S category has a shorter tenure. We all know that S category is what St. Croix needs right to recover and develop economically. We need the social workers otherwise SCDC is left a very weak social support staff base.” She suddenly goes silent and sighs having noticed that Drnda was almost running out of the room to escape her.

Her boss, Kurvaszy interjected, “There is no need for an outburst. However, Mary is right. We will be left with a minority of social workers and a majority of agriculturalists who cannot be trained within 90 days to do the social work. They are not in even in the same department.”

“Gentlemen and lady,” Drnda said putting up his hands in self-defense. “I did not come to impose my decision you. I came to consult you remember. This was simply a suggestion. Let’s all think about it, come up with better solutions and alternative retention registers. Then we can go through them in the meeting. Okay?”

Some mumbled a weak yes while others just nodded. However, Drnda did not hear or see any of nods because he was already out of the door car keys in his hand.

Stakeholder Chart

StakeholderPerspective
Roman DrndaDryna is eager to finish the RIF to ensure that he accomplishes the orders issued down by the Secretary of Agriculture. However, he is open to suggestions that ensure St. Croix remains within its economic development path. He does not have a rigid retention registry.
Anton KurvaszyKurvaszy knows that a considerable number of people in the USDA will have to be laid off. However, desires to retain more social workers than agricultural extension workers because the social workers are crucial in the activities of SCDC.
Mary MartengroveShe would rather have the entire category A (extension services workers) eliminated as long as she retains all the social workers. However, she would settle for a retention register strategically and significantly safes a number of the social workers.
Dagmar BlaineBlaine represents Congresswoman Moe. He and the Congresswoman wanted to politicize the issue and maintain a good image to the public.
Chris ClairyChris was representing the Wisconsin state senator. The two wanted to protect their constituents from unfair elimination by a crude retention register. They wanted the retention registers to be subdivided into Wisconsin and Minnesota competitive areas to avoid more Wisconsin employees from being bumped by Minnesota staff.
Guy StrumiGuy Strumi was representing Walt March, who is the leader of the federal employees in the region. The two want to maintain a good union image by fighting the RIF itself. March would want to protect the less desired extension workers but he knows deep that St. Croix needs more social workers than extension service workers. He intends to file a suit against the office of the Secretary of Agriculture to make sure that members of his union regard him as a fighter and protector of their rights and privileges.

Expert interview

The interviewee is called Diane Miller. She works with Pinellas County and holds the position of Workforce Strategy Manager. The interview took place on January 22, 2018 at 3:00 Pm in her office in downtown Clearwater. During the interview, we discussed about her management skills and decision that she had to take in her career as a Workforce Strategy Manager. I was thrilled to hear how many difficult cases she had and resolved during her entire career. My most important question for her was if she ever had to deal with a layoff issue and how did she deal with it, since my case study was about the layoff issue. She had a lot of experience managing people and dealing with layoff issue. During the interview, I was amazed from her experience and the way how she dealt with it. Based on her experience she started by letting people go based on some criteria such as demographic, legal file, and based on their performance. Her perspective was that the company would provide severance and assistant for getting new employment to the people that went to layoff. Amazed by her experience, I was eager to know any advice that she has to give us as a new student in Public Policy Program and willing to work for the government. Her advice was that “the government career was as any job anywhere and you need to learn the culture, the process, get to know people, meet regularly with your boss, make sure you over communicate, and get your bias as many people as possible.”

Recommendation

Three key factors intertwine in this case scenario. First, thirteen people out of the thirty-nine APTs will have to be laid off. Secondly, a political scenario exists whereby political representatives feel that a retention criterion that lays off more people from one side of the political demographic is unfair. Thirdly, there is need to retain more social workers than agricultural extension services personnel because agriculture has greatly shrunk in St. Croix. All these three factors must be addressed appropriately. In addition, the retention register that addresses all the three intertwined factors must be consistent with the federal RIF regulations.

The best approach is to develop a retention register that recognizes the political interests and professional requirements accordingly through establishment of two two-layered complex competitive areas. This can be achieved through two steps. The first step is to divide the USDA staff into the Wisconsin side and Minnesota side. The second step is to create three competitive levels from each side separately. The Wisconsin side would have an F, A, and S categories. Likewise, the Minnesota would have its F, A, and S categories. Such this formulation of two parallel retention registers satisfies two needs. First, it ensures that people from Wisconsin bump only people from Wisconsin whereas Minnesota people bump only Minnesota people. Secondly, it ensures that each of the three categories bump people only from their respective categories. As such, the S would be safer from the massive bumping from the other less needed group A.

Reference Garvey, G. (1997). Public Administration: The Profession and Practice. New York: St. Martins Press.

CITY OF DUNEDIN FIREFIGHTERS’ RETIREMENT SYSTEM ACTUARIAL VALUATION REPORT

AS OF OCTOBER 1, 2017

CONTRIBUTIONS APPLICABLE TO THE CITY’S PLAN/FISCAL YEAR ENDED SEPTEMBER 30, 2019

13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · Fax (239) 481-0634 · www.foster-foster.com

February 19, 2018 Board of Trustees Dunedin Firefighters’ Retirement System 1042 Virginia Street Dunedin, FL 34698 Re: City of Dunedin Firefighters’ Retirement System Dear Board: We are pleased to present to the Board this report of the annual actuarial valuation of the City of Dunedin

Firefighters’ Retirement System. Included are the related results for GASB Statements No. 67 and No.

68. The funding valuation was performed to determine whether the assets and contributions are sufficient

to provide the prescribed benefits and to develop the appropriate funding requirements for the applicable

plan year. The calculation of the liability for GASB results was performed for the purpose of satisfying

the requirements of GASB Statements No. 67 and No. 68. Please note that these valuations may not be

applicable for any other purposes.

The valuations have 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 reflect laws and regulations issued to date pursuant to the provisions of Chapters 112 and 175,

Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions used

in the valuations, as adopted by the Board of Trustees, represent reasonable expectations of anticipated

plan experience. Future actuarial measurements may differ significantly from the current measurements

presented in this report for a variety of reasons including: changes in applicable laws, changes in plan

provisions, changes in assumptions, or plan experience differing from expectations.

In conducting the valuations, we have relied on personnel, plan design, and asset information supplied by

the Board of Trustees, financial reports prepared by the custodian bank, 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. As a result 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 pension liability, net pension liability, and certain sensitivity information shown in this report

are based on an actuarial valuation performed as of October 1, 2016. The total pension liability was

rolled-forward from the valuation date to the plan’s fiscal year ending September 30, 2017 using

generally accepted actuarial principles. It is our opinion that the assumptions used for this purpose are

internally consistent, reasonable, and comply with the requirements under GASB No. 67 and No. 68.

The undersigned is familiar with the immediate and long-term aspects of pension valuations, and meets

the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial

opinions contained herein. All of the sections of this report are considered an integral part of the actuarial

opinions.

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 Dunedin, nor does anyone at Foster &

Foster, Inc. act as a member of the Board of Trustees of the City of Dunedin Firefighters’ Retirement

System. 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 me at 239-433-5500.

Respectfully submitted,

Foster & Foster, Inc.

By: _______________________________ Patrick T. Donlan, ASA, EA, MAAA Enrolled Actuary #17-6595

PTD/lke

Enclosures

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 3

TABLE OF CONTENTS Section Title Page I Introduction a. Summary of Report 5 b. Changes Since Prior Valuation 7

c. Comparative Summary of Principal Valuation Results 8

II Valuation Information

a. Reconciliation of Unfunded 14 Actuarial Accrued Liabilities b. Detailed Actuarial (Gain)/Loss 15

Analysis

c. Actuarial Assumptions and 16 Methods d. Valuation Notes 19 e. Partial History of Premium 21 Tax Refunds f. Excess State Monies Reserve 22

III Trust Fund 23 IV Member Statistics a. Statistical Data 29 b. Age and Service Distribution 30 c. Valuation Participant Reconciliation 31 V Summary of Plan Provisions 32 VI Supplemental Chapter 175 Share Plan Activity 37 VII Governmental Accounting Standards 38 Board Disclosure Information

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 4

SUMMARY OF REPORT The regular annual actuarial valuation of the City of Dunedin Firefighters’ Retirement System, performed as

of October 1, 2017, has been completed, and the results are presented in this Report. The contribution

amounts set forth herein are applicable to the City’s plan/fiscal year ending September 30, 2019.

The funding requirements, compared with the amounts developed in the October 1, 2016 Actuarial Valuation,

are as follows:

Valuation Date Applicable Plan Year End

10/1/2017 9/30/2019

10/1/2016 9/30/2018

City and State Required Contribution $746,882 $777,513 State Contribution (est.) *

$286,818

$286,818

Balance from City * $460,064 $490,695

* The City may use up to $283,050.40 plus 25% of any amounts received above $283,050.40 in State

Contributions for determining its minimum funding requirements, based on the Mutual Consent

Agreement. The amount shown represents what this will be if future State Monies equal the amount

received in calendar 2017.

Experience since the last valuation has been less favorable than expected, relative to the Plan’s actuarial

assumptions. The primary components of unfavorable experience included a 6.33% Actuarial Asset Return

that fell short of the 7.50% assumption, and no inactive mortality. These losses were partially offset by the

effect of lower than expected average increases in pensionable earnings and favorable turnover experience.

For more details regarding the actuarial loss, please see page 15.

Additionally, there is a City receivable contribution of $57,461.79 required for the fiscal year ending

September 30, 2017. For more details regarding this shortfall, please see page 28.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 5

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 answer any pending questions concerning its contents.

Respectfully submitted,

FOSTER & FOSTER, INC.

By:______________________________ Patrick T. Donlan, ASA, EA, MAAA

By: Christine M. O’Neal, FSA, EA, MAAA

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 6

CHANGES SINCE PRIOR VALUATION

Plan Changes There have been no changes in benefits since the prior valuation.

Actuarial Assumption/Method Changes The mortality tables were changed to use the same rates as used by the Florida Retirement System (FRS) in

their July 1, 2016 valuation as required by State Law.

Additionally, the payroll growth assumption, utilized for purposes of amortizing the Unfunded Actuarial

Accrued Liability, was lowered from 1.77% to 1.32% per year. This reduction complies with the

requirements of Part VII of Chapter 112, Florida Statutes, whereby the use of a payroll growth assumption is

limited to the Plan’s actual ten-year payroll growth average, determined as of the valuation date.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 7

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS

10/1/2017 10/1/2016

A. Participant Data

Actives 47 49

Service Retirees 32 31

DROP Retirees 4 3

Beneficiaries 6 6

Disability Retirees 6 6

Terminated Vested 2 0

Total 97 95

Total Annual Payroll $3,276,350 $3,381,361

Payroll Under Assumed Ret. Age 3,276,350 3,381,361

Annual Rate of Payments to:

Service Retirees 825,917 792,384

DROP Retirees 229,187 143,394

Beneficiaries 137,764 137,764

Disability Retirees 153,927 153,927

Terminated Vested 19,051 0

B. Assets

Actuarial Value (AVA) ¹ 27,850,752 26,458,831

Market Value (MVA) ¹ 26,900,084 25,285,901

C. Liabilities

Present Value of Benefits

Actives

Retirement Benefits 17,659,507 17,750,822

Disability Benefits 979,991 989,643

Death Benefits 263,900 580,928

Vested Benefits 148,746 170,206

Refund of Contributions 21,843 24,201

Service Retirees 8,517,397 8,237,211

DROP Retirees ¹ 3,136,166 1,865,257

Beneficiaries 1,522,551 1,540,577

Disability Retirees 1,273,322 1,298,081

Terminated Vested 135,091 0

Share Plan Balances ¹ 122,437 107,450

Excess State Monies Reserve 32,072 32,072

Total 33,813,023 32,596,448

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 8

C. Liabilities – (Continued) 10/1/2017 10/1/2016

Present Value of Future Salaries 24,878,216 26,442,208

Present Value of Future

Member Contributions 1,368,302 1,454,321

Normal Cost (Retirement) 676,129 692,334

Normal Cost (Disability) 78,503 77,551

Normal Cost (Death) 26,164 58,545

Normal Cost (Vesting) 9,679 10,721

Normal Cost (Refunds) 5,434 5,591

Total Normal Cost 795,909 844,742

Present Value of Future

Normal Costs 5,933,032 6,443,283

Accrued Liability (Retirement) 12,565,410 12,423,628

Accrued Liability (Disability) 413,008 411,520

Accrued Liability (Death) 74,109 139,104

Accrued Liability (Vesting) 86,216 94,972

Accrued Liability (Refunds) 2,212 3,293

Accrued Liability (Inactives) ¹ 14,584,527 12,941,126

Share Plan Balances ¹ 122,437 107,450

Excess State Monies Reserve 32,072 32,072

Total Actuarial Accrued Liability (EAN AL) 27,879,991 26,153,165

Unfunded Actuarial Accrued

Liability (UAAL) 29,239 (305,666)

Funded Ratio (AVA / EAN AL) 99.9% 101.2%

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 9

D. Actuarial Present Value of

Accrued Benefits 10/1/2017 10/1/2016

Vested Accrued Benefits

Inactives + Share Plan Balances ¹ 14,706,964 13,048,576

Actives 7,522,534 7,272,045

Member Contributions 1,979,310 2,039,250

Total 24,208,808 22,359,871

Non-vested Accrued Benefits 787,299 973,747

Total Present Value

Accrued Benefits (PVAB) 24,996,107 23,333,618

Funded Ratio (MVA / PVAB) 107.6% 108.4%

Increase (Decrease) in Present Value of

Accrued Benefits Attributable to:

Plan Amendments 0

Assumption Changes 0

New Accrued Benefits 1,093,552

Benefits Paid (1,138,395)

Interest 1,707,332

Other 0

Total 1,662,489

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 10

Valuation Date 10/1/2017 10/1/2016 Applicable to Fiscal Year Ending 9/30/2019 9/30/2018

E. Pension Cost

Normal Cost ² $869,438 $923,571

Administrative Expenses ² 72,081 79,670

Payment Required to Amortize Unfunded Actuarial Accrued Liability over 30 years (as of 10/1/2017) ² 2,210 (22,398)

Total Required Contribution 943,729 980,843

Expected Member Contributions ² 196,847 203,330

Expected City and State Contribution 746,882 777,513

F. Past Contributions

Plan Years Ending: 9/30/2017

City and State Requirement 733,401

Actual Contributions Made:

Members (excluding buyback) 180,673 City 446,583 State 286,818 Total 914,074

G. Net Actuarial (Gain)/Loss 322,046

¹ The asset values and liabilities include accumulated DROP and Share Plan Balances as of 9/30/2017 and 9/30/2016.

² Contributions developed as of 10/1/2017 displayed above have been adjusted to account for assumed salary increase and interest components.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 11

H. Schedule Illustrating the Amortization of the Total Unfunded Actuarial Accrued Liability as of:

Projected Unfunded Year Actuarial Accrued Liability

2017 29,239 2018 29,841 2019 30,468 2026 35,679 2033 42,922 2040 53,366 2047 0

I. (i) 3 Year Comparison of Actual and Assumed Salary Increases

Actual Assumed

Year Ended 9/30/2017 4.09% 5.93% Year Ended 9/30/2016 2.97% 6.31% Year Ended 9/30/2015 3.01% 6.56%

(ii) 3 Year Comparison of Investment Return on Actuarial Value

Actual Assumed

Year Ended 9/30/2017 6.33% 7.50% Year Ended 9/30/2016 7.85% 7.75% Year Ended 9/30/2015 7.75% 7.75%

(iii) Average Annual Payroll Growth

(a) Payroll as of: 10/1/2017 $3,276,350 10/1/2007 2,874,322

(b) Total Increase 13.99%

(c) Number of Years 10.00

(d) Average Annual Rate 1.32%

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 12

STATEMENT BY ENROLLED ACTUARY This actuarial valuation was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan’s assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation.

_____________________________ Patrick T. Donlan, EA, ASA, MAAA Enrolled Actuary #17-6595

Please let us know when the report is approved by the Board and unless otherwise directed we will provide copies of the report to the following offices to comply with Chapter 112, Florida Statutes:

Mr. Keith Brinkman Bureau of Local

Retirement Systems Post Office Box 9000

Tallahassee, FL 32315-9000

Ms. Sarah Carr Municipal Police and Fire

Pension Trust Funds Division of Retirement Post Office Box 3010

Tallahassee, FL 32315-3010

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 13

RECONCILIATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES

(1) Unfunded Actuarial Accrued Liability as of October 1, 2016 ($305,666)

(2) Sponsor Normal Cost developed as of October 1, 2016 658,767

(3) Expected administrative expenses for the year ended September 30, 2017 72,870

(4) Expected interest on (1), (2) and (3) 29,215

(5) Sponsor contributions to the System during the year ended September 30, 2017 733,401

(6) Expected interest on (5) 14,592

(7) Expected Unfunded Actuarial Accrued Liability as of September 30, 2017 (1)+(2)+(3)+(4)-(5)-(6) (292,807)

(9) Change to UAAL due to Actuarial (Gain)/Loss 322,046

(10) Unfunded Actuarial Accrued Liability as of October 1, 2017 29,239

Type of Date Years 10/1/2017 Amortization Base Established Remaining Amount Amount

UAAL Fresh Start 10/1/2015 28 (831,811) (59,077) Benefit Change 10/1/2015 28 526,704 37,408

Assumption Changes 10/1/2016 29 203,846 14,284 Actuarial Gain 10/1/2016 29 (191,546) (13,422) Actuarial Loss 10/1/2017 30 322,046 22,287

29,239 1,480

Minimum 30 Year Amortization of UAAL 2,023

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 14

(1) Unfunded Actuarial Accrued Liability (UAAL) as of October 1, 2016 ($305,666)

(2) Expected UAAL as of October 1, 2017 (292,807)

(3) Summary of Actuarial (Gain)/Loss, by component:

Investment Return (Actuarial Asset Basis) 307,702

Salary Increases (54,917)

Active Decrements (34,196)

Inactive Mortality 137,249

Other (33,792)

Increase in UAAL due to (Gain)/Loss 322,046

(4) Actual UAAL as of October 1, 2017 $29,239

DETAILED ACTUARIAL (GAIN)/LOSS ANALYSIS

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 15

ACTUARIAL ASSUMPTIONS AND METHODS Mortality Rates Healthy Active Lives:

Female: RP2000 Generational, 100% Combined Healthy (previously Annuitant) White Collar, Scale BB

Male: RP2000 Generational, 10% Combined Healthy (previously Annuitant) White Collar / 90% Combined Healthy (previously Annuitant) Blue Collar, Scale BB

Healthy Inactive 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

The assumed rates of mortality were mandated by Chapter

2015-157, Laws of Florida. This law mandates the use of the assumptions used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in the July 1, 2016 FRS actuarial valuation report for special risk employees. We feel this assumption sufficiently accommodates future mortality improvements.

Previously, the special risk rates from the July 1, 2015 FRS actuarial valuation report were used.

Termination Rates

Service

Probability of Termination

0 5.0%

1 5.0 2 5.0 3 5.0 4 5.0 5 5.0 6 4.0 7 4.0 8 0.0 9 0.0

10+ 0.5

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 16

The assumed rates of termination resulted from an October 3, 2016 Experience Study.

Disability Rates See sample rates on the following page. 75% of disabilities are

assumed to be service-incurred. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters.

Retirement Rates Years After First Eligibility for

Normal Retirement Probability of

Retirement

0 20% 1 10 2 10 3 10 4 10

5+ 100% Additionally, the assumed rate of retirement is 2.0% for each

year of eligibility for early retirement. The assumed rates of retirement resulted from an October 3, 2016 Experience Study.

Interest Rate 7.50% per year, compounded annually, net of investment

related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.

Administrative Expenses Average of last 2 years ($65,985 for this valuation). Salary Increases

Service

Salary Increase Assumption

0 11.0% 1 10.0 2 9.0 3 8.0 4 7.0 5 6.5 6 6.5 7 6.5 8 6.5 9 6.5

10 6.0 11 5.5 12 5.0 13 4.5

14+ 4.0 The assumed rates of salary increase resulted from an

October 3, 2016 Experience Study.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 17

Payroll Growth 1.32% (previously 1.77%) per year for amortization of the Unfunded Actuarial Accrued Liability. This is in compliance with Part VII of Chapter 112, Florida Statutes.

Funding Method Entry Age Normal Cost Method Funding Projection The following loads are applied for determination of the

Sponsor dollar funding requirement for the following year: Interest – A half year, based on the current 7.50% assumption Salary – A full year, based on the current 5.29% assumption.

Actuarial Asset Method All assets are valued at market value with an adjustment

made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period.

Disability Rates

% Becoming Disabled

Age During the Year

20 0.14%

25 0.15%

30 0.18%

35 0.23%

40 0.30%

45 0.51%

50 1.00%

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 18

VALUATION NOTES Total Annual Payroll is the projected annual rate of pay for the fiscal year following the valuation date of all

covered Members.

Present Value of Benefits is the single sum value on the valuation date of all future benefits to be paid to

current Members, Retirees, Beneficiaries, Disability Retirees and Vested Terminations.

Total Required Contribution is equal to the Normal Cost plus an amount sufficient to amortize the Unfunded

Accrued Liability over no more than 30 years. The required amount is adjusted for interest according to

the timing of contributions during the year.

Entry Age Normal Cost Method – Under this method, the normal cost is the sum of the individual normal

costs for all active participants. For an active participant, the normal cost is the participant’s normal cost

accrual rate, multiplied by the participant’s current compensation.

(a) The normal cost accrual rate equals

(i) the present value of future benefits for the participant, determined as of the participant’s entry age,

divided by

(ii) the present value of the compensation expected to be paid to the participant for each year of the

participant’s anticipated future service, determined as of the participant’s entry age.

(b) In calculating the present value of future compensation, the salary scale is applied both retrospectively

and prospectively to estimate compensation in years prior to and subsequent to the valuation year based

on the compensation used for the valuation.

(c) The accrued liability is the sum of the individual accrued liabilities for all participants and beneficiaries.

A participant’s accrued liability equals the present value, at the participant’s attained age, of future

benefits less the present value at the participant’s attained age of the individual normal costs payable in

the future. A beneficiary’s accrued liability equals the present value, at the beneficiary’s attained age, of

future benefits. The unfunded accrued liability equals the total accrued liability less the actuarial value

of assets.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 19

(d) Under this method, the entry age used for each active participant is the participant’s age at the time he

or she would have commenced participation if the plan had always been in existence under current terms,

or the age as of which he or she first earns service credits for purposes of benefit accrual under the

current terms of the plan.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 20

PARTIAL HISTORY OF PREMIUM TAX REFUNDS

Received During Increase from

Fiscal Year Amount Previous Year

1994 62,098.00 _____%

1995 73,833.00 18.9%

1996 82,739.00 12.1%

1997 97,823.00 18.2%

1998 98,180.40 0.4%

1999 96,222.13 -2.0%

2000 99,153.84 3.0%

2001 105,318.48 6.2%

2002 115,277.87 9.5%

2003 140,390.49 21.8%

2004 185,679.70 32.3%

2005 179,624.52 -3.3%

2006 203,474.98 13.3%

2007 291,578.32 43.3%

2008 232,457.90 -20.3%

2009 303,971.21 30.8%

2010 291,660.79 -4.0%

2011 289,418.10 -0.8%

2012 309,954.21 7.1%

2013 314,996.10 1.6%

2014 322,029.56 2.2%

2015 303,897.66 -5.6%

2016 286,293.33 -5.8%

2017 298,121.66 4.1%

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 21

Actual Applicable Excess State State Contribution “Frozen” Amount Monies Reserve

1999 $96,222.13 $102,798.40 $0.00 2000 99,153.84 102,798.40 0.00 2001 105,318.48 102,798.40 2,520.08 2002 115,277.87 102,798.40 12,479.47 2003 140,390.49 102,798.40 37,592.09 2004 185,679.70 102,798.40 82,881.30 2005 179,624.52 102,798.40 76,826.12 2006 203,474.98 102,798.40 100,676.58 2007 291,578.32 102,798.40 188,779.92 2008 232,457.90 102,798.40 129,659.50 2009 303,971.21 102,798.40 201,172.81 2010 291,660.79 102,798.40 188,862.39 2011 289,418.10 283,050.40 6,367.70 2012 309,954.21 283,050.40 26,903.81 2013 314,996.10 283,050.40 31,945.70 2014 322,029.56 283,050.40 38,979.16 2015 303,897.66 283,050.40 20,847.26 2016 286,293.33 283,050.40 3,242.93 2017 298,121.66 286,818.21 11,303.45

Total Excess State Monies 1,161,040.27

Less Reserve used for Ordinance 07-24 (189,212.00) Less Reserve used for Ordinance 11-40 (832,238.26) Less Amounts used for Share in fiscal 2011 (4,775.77) Less Amounts used for Share in fiscal 2012 (20,177.86) Less Amounts used for Share in fiscal 2013 (23,959.28) Less Amounts used for Share in fiscal 2014 (29,234.37) Less Amounts used for Share in fiscal 2015 (15,635.45) Less Amounts used for Share in fiscal 2016 (2,432.20) Less Amounts used for Share in fiscal 2017 (11,303.45)

Equals Current State Monies Reserve $32,071.63

EXCESS STATE MONIES RESERVE

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 22

ASSETS COST VALUE MARKET VALUE Cash and Cash Equivalents: Prepaid Expenses 1,147.93 1,147.93 Money Market 355,611.13 355,611.13

Total Cash and Equivalents 356,759.06 356,759.06

Receivables: Member Contributions in Transit 6,352.96 6,352.96 Additional City Contributions 57,461.79 57,461.79 State Contributions 298,121.66 298,121.66 Investment Income 43,943.75 43,943.75

Total Receivable 405,880.16 405,880.16

Investments: Fixed Income 5,739,029.86 5,793,491.77 Equities 14,756,257.54 17,506,053.68 Pooled/Common/Commingled Funds: Real Estate 2,250,000.00 2,866,772.59

Total Investments 22,745,287.40 26,166,318.04

Total Assets 23,507,926.62 26,928,957.26

LIABILITIES Payables: Investment Expenses 28,872.86 28,872.86

Total Liabilities 28,872.86 28,872.86

NET POSITION RESTRICTED FOR PENSIONS 23,479,053.76 26,900,084.40

STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2017

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 23

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017

Market Value Basis

ADDITIONS Contributions: Member 180,672.76 Buy-Back 1,118.40 City 446,582.79 State 298,121.66

Total Contributions 926,495.61

Investment Income: Net Realized Gain (Loss) 203,818.32 Unrealized Gain (Loss) 1,272,941.31 Net Increase in Fair Value of Investments 1,476,759.63 Interest & Dividends 553,734.47

Less Investment Expense¹ (141,815.81)

Net Investment Income 1,888,678.29

Total Additions 2,815,173.90

DEDUCTIONS Distributions to Members: Benefit Payments 1,114,815.26 Lump Sum DROP Distributions 5,209.67 Lump Sum Share Distributions 4,428.12 Refunds of Member Contributions 13,941.57

Total Distributions 1,138,394.62

Administrative Expense 62,596.01

Total Deductions 1,200,990.63

Net Increase in Net Position 1,614,183.27

NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 25,285,901.13

End of the Year 26,900,084.40

¹Investment related expenses include investment advisory, custodial and performance monitoring fees.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 24

Plan Year Ending Gain/(Loss) 2017 2018 2019 2020 2021

09/30/2013 1,116,876 0 0 0 0 0 09/30/2014 168,706 33,742 0 0 0 0 09/30/2015 (2,228,150) (891,260) (445,630) 0 0 0 09/30/2016 (158,623) (95,173) (63,448) (31,723) 0 0 09/30/2017 2,529 2,023 1,517 1,011 505 0

Total (950,668) (507,561) (30,712) 505 0

Market Value of Assets, 09/30/2016 25,285,901 Contributions Less Benefit Payments & Admin Expenses (274,495) Expected Investment Earnings* 1,886,149 Actual Net Investment Earnings 1,888,678 2017 Actuarial Investment Gain/(Loss) 2,529

*Expected Investment Earnings = 0.075 * [25,285,901 + 0.5 * (274,495)]

(1) Market Value of Assets, 09/30/2017 26,900,084 (2) Gains/(Losses) Not Yet Recognized (950,668) (3) Actuarial Value of Assets, 09/30/2017, (1) – (2) 27,850,752

(A) 09/30/2016 Actuarial Assets: 26,458,831

(I) Net Investment Income: 1. Interest and Dividends 553,734 2. Realized Gains (Losses) 203,818 3. Change in Actuarial Value 1,050,679 4. Investment Expenses (141,816)

Total 1,666,416

(B) 09/30/2017 Actuarial Assets: 27,850,752

Actuarial Assets Rate of Return = 2I/(A+B-I): 6.33%

Market Value of Assets Rate of Return: 7.55%

Actuarial Gain/(Loss) due to Investment Return (Actuarial Asset Basis) (307,702)

10/01/2017 Limited Actuarial Assets: 27,850,752

Amounts Not Yet Recognized by Valuation Year

Development of Investment Gain/Loss

Development of Actuarial Value of Assets

ACTUARIAL ASSET VALUATION September 30, 2017

Actuarial Assets for funding purposes are developed by recognizing the total actuarial investment gain or loss for each

Plan Year over a five year period. In the first year, 20% of the gain or loss is recognized. In the second year 40%, in the

third year 60%, in the fourth year 80%, and in the fifth year 100% of the gain or loss is recognized. The actuarial

investment gain or loss is defined as the actual return on investments minus the actuarial assumed investment return.

Actuarial Assets shall not be less than 80% nor greater than 120% of Market Value of Assets.

Gains/Losses Not Yet Recognized

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 25

SEPTEMBER 30, 2017 Actuarial Asset Basis

REVENUES Contributions: Member 180,672.76 Buy-Back 1,118.40 City 446,582.79 State 298,121.66

Total Contributions 926,495.61

Earnings from Investments: Interest & Dividends 553,734.47 Net Realized Gain (Loss) 203,818.32 Change in Actuarial Value 1,050,679.31

Total Earnings and Investment Gains 1,808,232.10

EXPENDITURES Distributions to Members: Benefit Payments 1,114,815.26 Lump Sum DROP Distributions 5,209.67 Lump Sum Share Distributions 4,428.12 Refunds of Member Contributions 13,941.57

Total Distributions 1,138,394.62

Expenses:

Investment related¹ 141,815.81 Administrative 62,596.01

Total Expenses 204,411.82

Change in Net Assets for the Year 1,391,921.27

Net Assets Beginning of the Year 26,458,831.13

Net Assets End of the Year² 27,850,752.40

¹Investment related expenses include investment advisory, custodial and performance monitoring fees.

²Net Assets may be limited for actuarial consideration.

CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 26

Beginning of the Year Balance 137,846.23

Plus Additions 132,466.70

Investment Return Earned 16,904.41

Less Distributions (5,209.67)

End of the Year Balance 282,007.67

DEFERRED RETIREMENT OPTION PLAN ACTIVITY October 1, 2016 to September 30, 2017

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 27

(1) Required City and State Contributions $733,401.00

(2) Less Allowable State Contribution (286,818.21)

(3) Required City Contribution for Fiscal 2017 446,582.79

(4) Less 2016 Prepaid Contribution 0.00

(5) Less Actual City Contributions (389,121.00)

(6) Equals City’s Shortfall/(Prepaid) Contribution as of $57,461.79

September 30, 2017

RECONCILIATION OF CITY’S SHORTFALL/(PREPAID) CONTRIBUTION

FOR THE FISCAL YEAR ENDED (FYE) SEPTEMBER 30, 2017

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 28

STATISTICAL DATA

10/1/2014 10/1/2015 10/1/2016 10/1/2017

Actives

Number 50 50 49 47

Average Current Age 40.9 41.9 41.5 42.2

Average Age at Employment 29.7 29.6 29.1 29.6

Average Past Service 11.2 12.3 12.4 12.6

Average Annual Salary $67,001 $68,763 $69,007 $69,710

Service Retirees

Number 32 30 31 32

Average Current Age 65.7 66.8 67.2 67.8

Average Annual Benefit $25,400 $24,639 $25,561 $25,810

DROP Retirees

Number 1 1 3 4

Average Current Age 56.1 57.1 56.3 53.8

Average Annual Benefit $49,729 $52,729 $47,798 $57,297

Beneficiaries

Number 5 6 6 6

Average Current Age 52.3 55.5 60.5 61.5

Average Annual Benefit $23,315 $22,491 $22,961 $22,961

Disability Retirees

Number 6 6 6 6

Average Current Age 65.0 66.0 67.0 68.0

Average Annual Benefit $25,655 $25,655 $25,655 $25,655

Terminated Vested

Number 3 2 0 2

Average Current Age 36.9 38.9 N/A 32.8

Average Annual Benefit ¹ $24,150 $24,150 N/A $19,051

¹ The Average Annual Benefit excludes participants awaiting a refund of contributions.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 29

AGE AND SERVICE DISTRIBUTION

PAST SERVICE

AGE 0 1 2 3 4 5-9 10-14 15-19 20-24 25-29 30+ Total

15 – 19 0 0 0 0 0 0 0 0 0 0 0 0

20 – 24 0 0 0 0 0 0 0 0 0 0 0 0

25 – 29 1 0 0 0 1 0 0 0 0 0 0 2

30 – 34 3 0 0 0 1 4 1 0 0 0 0 9

35 – 39 0 0 0 0 0 1 5 0 0 0 0 6

40 – 44 0 0 0 0 0 1 5 4 1 0 0 11

45 – 49 0 0 0 0 1 1 3 4 1 0 0 10

50 – 54 0 0 0 0 0 0 4 0 4 0 0 8

55 – 59 0 0 0 0 0 0 0 1 0 0 0 1

60 – 64 0 0 0 0 0 0 0 0 0 0 0 0

65+ 0 0 0 0 0 0 0 0 0 0 0 0

Total 4 0 0 0 3 7 18 9 6 0 0 47

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 30

VALUATION PARTICIPANT RECONCILIATION

1. Active lives

a. Number in prior valuation 10/1/2016 49

b. Terminations

i. Vested (partial or full) with deferred benefits (2)

ii. Non-vested or full lump sum distribution received (2)

c. Deaths

i. Beneficiary receiving benefits 0

ii. No future benefits payable 0

d. Disabled 0

e. Retired 0

f. DROP (2)

g. Continuing participants 43

h. New entrants 4

i. Total active life participants in valuation 47

2. Non-Active lives (including beneficiaries receiving benefits)

Service

Retirees,

Vested Receiving Receiving

Receiving DROP Death Disability Vested

Benefits Benefits Benefits Benefits Deferred Total

a. Number prior valuation 31 3 6 6 0 46

Retired 1 (1) 0 0 0 0

DROP 0 2 0 0 0 2

Vested Deferred 0 0 0 0 2 2

Death, With Survivor 0 0 0 0 0 0

Death, No Survivor 0 0 0 0 0 0

Disabled 0 0 0 0 0 0

Refund of Contributions 0 0 0 0 0 0

Rehires 0 0 0 0 0 0

Expired Annuities 0 0 0 0 0 0

Data Corrections 0 0 0 0 0 0

b. Number current valuation 32 4 6 6 2 50

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 31

FIREFIGHTERS’ RETIREMENT TRUST FUND

SUMMARY OF PLAN PROVISIONS (Through Ordinance 16-22)

Eligibility All actively employed full-time firefighters participate in the

plan as a condition of employment. Credited Service Service is measured as the total number of years and

fractional parts of years of service as a firefighter with member contributions. No service is credited for any periods of employment for which the member received a refund of their contributions.

Salary The fixed monthly compensation for services rendered to the

City as a firefighter including holiday pay, plus all tax deferred, tax sheltered and tax exempt items of income otherwise includable as fixed monthly compensation.

Final Average Compensation One twelfth of the average Compensation for the highest 3

years out of the last 10 years of Credited Service prior to termination or retirement.

Member Contributions 5.5% of Compensation. Employer Contributions Chapter 175 Premium Tax Refunds and any additional

amount determined by the actuary needed to fund the plan properly according to State laws.

Normal Retirement

Eligibility A member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age.

Benefit 3% of AFC multiplied by Credited Service up to 25 years

plus 2% of AFC multiplied by Credited Service in excess of 37.5 years. Total benefit is limited to 100% of AFC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

Form of Benefit Ten Year Certain and Life thereafter; other options

available.

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Early Retirement

Date A member may retire on the first day of the month coincident with or next following age 45 and 10 years of Credited Service.

Benefit The Normal Retirement Benefit is actuarially reduced by

3.00% for each year to age 50 and 3.33% for each year from age 50 to age 45 by which the commencement of benefits precedes the member’s Normal Retirement date had the member continued employment as a firefighter. For this purpose, the Normal Retirement date upon completion of 20 years of Credited Service is disregarded.

Form of Benefit Ten Year Certain and Life thereafter; other options

available. Delayed Retirement Same as Normal Retirement taking into account

compensation earned and service credited until the date of actual retirement.

Vested Termination

Eligibility A member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service.

Benefit The benefit is the member’s accrued Normal Retirement

Benefit as of the date of termination. The benefit is payable at the member’s Normal Retirement age determined as if the member continued employment as a firefighter. Alternatively, members can elect a reduced Early Retirement Benefit anytime after age 45.

Members with less than 10 years of Credited Service will

receive a refund of their own accumulated contributions.

Form of Benefit Ten Year Certain and Life thereafter; other options available.

Service Connected Disability

Eligibility Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter as a result from an act occurring in the performance of service for the City is immediately eligible for a disability benefit.

Benefit The greater of: (1) The accrued Normal Retirement Benefit

taking into account compensation earned and service credited until the date of disability, or (2) 60% of average salary over the 5 highest years of Credited Service.

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Duration Payable until death or recovery from disability with 120 payments guaranteed.

Non-Service Connected Disability

Eligibility Any member who has 10 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter is immediately eligible for a disability benefit.

Benefit The greater of: (1) The accrued Normal Retirement Benefit

taking into account compensation earned and service credited until the date of disability, or (2) 30% of average salary over the 5 highest years of Credited Service.

Duration Payable until death or recovery from disability with 120

payments guaranteed. Death Benefits

In the Line of Duty

Eligibility Any member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service.

Benefit 50% of base rate of pay in effect on date of death is payable

to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 15% of the member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student); 50% total maximum for all such children.

Duration Spouse benefits payable until death or remarriage.

Children’s benefits are payable until death, marriage or the attainment of age 18 (age 22 if a full-time student).

Other Pre-Retirement

Eligibility Any member who dies, and whose death is not attributable

to active duty or service, while employed as a firefighter by the City is eligible for survivor benefits regardless of Credited Service.

Benefit 25% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 7.5% of the member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student)

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Duration Spouse benefits payable until death or remarriage. Children’s benefits are payable until death, marriage or the attainment of age 18 (age 22 if a full-time student).

Post-Retirement Benefit determined by the form of benefit elected upon

retirement. Deferred Retirement Option Plan

Eligibility A member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Members who meet eligibility must submit a written election to participate in the DROP.

Benefit The member’s Credited Service and FAC are frozen upon

entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and FAC.

In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire. DROP participants do not receive the supplement until actual termination of employment.

Maximum DROP Period The earlier of 5 years of participation in the DROP or when

the member has completed 30 years of Credited Service. .

Interest Credited The member’s average daily balance of the DROP account is debited or credited with interest on a quarterly basis at a rate equal to the Trust Fund’s net investment return for the quarter.

Form of Benefit: Lump Sum, or the member may elect that the DROP

distribution be used to purchase an annuity. Optional Forms In lieu of electing the Normal Form of benefit, the optional

forms of benefits available to all retirees are a Single Life Annuity of the 50%, 66 2/3%, 75% and 100% Joint and Survivor options. A Social Security option is also available for members retiring prior to the time they are eligible for Social Security retirement benefits.

Share Plan 75% of the Excess State Monies received each fiscal year

(amounts above $283,050.40) are allocated equally among Eligible Members.

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Board of Trustees Two Council appointees, two Members of the Plan elected by the membership, and a fifth Member elected by other 4 and appointed by Council as a ministerial duty.

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9/30/2016 Balance 107,449.63

Plus Additions 11,303.45

Investment Return Earned (est.) 8,112.45

Less Distributions (4,428.12)

9/30/2017 Balance (est.) 122,437.41

SUPPLEMENTAL CHAPTER 175 SHARE PLAN ACTIVITY

October 1, 2016 through September 30, 2017

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13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · Fax (239) 481-0634 · www.foster-foster.com

February 8, 2018

Board of Trustees Dunedin Firefighters’ Retirement System 1042 Virginia Street Dunedin, FL 34698

RE: GASB Statement No.67 and No.68 – City of Dunedin Firefighters’ Retirement System

Dear Board:

We are pleased to present to the Board GASB Statement No.67 and No.68 measured as of September 30, 2017 for the City of Dunedin Firefighters’ Retirement System.

The calculation of the liability associated with the benefits referenced in this report was performed for satisfying the requirements of GASB No.67 and No.68 and is not applicable for other purposes, such as determining the plan’s funding requirements. A calculation of the plan’s liability for other purposes may produce significantly different results.

The total pension liability, net pension liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of October 1, 2016. The total pension liability was rolled-forward from the valuation date to the plan’s fiscal year ending September 30th, 2017 using generally accepted actuarial principles. It is our opinion that the assumptions used for this purposes are internally consistent, reasonable, and comply with the requirements under GASB No.67 and No.68.

Certain schedules should include a 10-year history of information. As provided for in GASB No.67 and No.68, this historical information is only presented for the years in which the information was measured in conformity with the requirements of GASB No.67 and No.68.

To the best of our knowledge, these statements are complete and accurate and are in accordance with generally recognized actuarial practices and methods.

If there are any questions, concerns, or comments about any of the items contained in this report, please contact me at 239-433-5500.

Respectfully submitted,

Foster & Foster, Inc.

By:

Patrick T. Donlan, ASA, MAAA Enrolled Actuary #17-6595

PTD/lke Enclosures

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GASB 67 STATEMENT OF FIDUCIARY NET POSITION

SEPTEMBER 30, 2017

ASSETS Cash and Cash Equivalents: Prepaid Expenses Money Market

Total Cash and Equivalents

Receivables: Member Contributions in Transit Additional City Contributions State Contributions Investment Income

Total Receivable

Investments: Fixed Income Equities Mutual Funds: Real Estate

Total Investments

Total Assets

LIABILITIES Payables: Investment Expenses

Total Liabilities

NET POSITION RESTRICTED FOR PENSIONS

MARKET VALUE

1,148 355,611

356,759

6,353 57,462

298,121 43,944

405,880

5,793,492 17,506,054

2,866,772

26,166,318

26,928,957

28,873

28,873

26,900,084

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GASB 67

ADDITIONS Contributions: Member 180,673 Buy-Back 1,118 City 446,583 State 298,122

Total Contributions 926,496

Investment Income: Net Increase in Fair Value of Investments 1,476,760 Interest & Dividends 553,734 Less Investment Expense¹ (141,816)

Net Investment Income 1,888,678

Total Additions 2,815,174

DEDUCTIONS Distributions to Members: Benefit Payments 1,114,815 Lump Sum DROP Distributions 5,210 Lump Sum Share Distributions 4,428 Refunds of Member Contributions 13,942

Total Distributions 1,138,395

Administrative Expense 62,596

Total Deductions 1,200,991

Net Increase in Net Position 1,614,183

NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 25,285,901

End of the Year 26,900,084

¹Investment related expenses include investment advisory, custodial and performance monitoring fees.

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017

Market Value Basis

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Plan Description

Plan Administration

Plan Membership as of October 1, 2016:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits 46 Inactive Plan Members Entitled to But Not Yet Receiving Benefits – Active Plan Members 49

95

Benefits Provided

Normal Retirement:

Early Retirement:

Delayed Retirement:

Service Connected Disability

NOTES TO THE FINANCIAL STATEMENTS

Eligibility: Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter as a result from an act occurring in the performance of service for the City is immediately eligible for a disability benefit. Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 60% of average salary over the 5 highest years of Credited Service.

(For the Year Ended September 30, 2017)

The Plan provides retirement, termination, disability and death benefits.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Benefit: 3% of AFC multiplied by Credited Service up to 25 years plus 2% of AFC multiplied by Credited Service in excess of 37.5 years. Total benefit is limited to 100% of AFC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

Date: A Member may retire on the first day of the month coincident with or next following age 45 and 10 years of Credited Service. Benefit: The Normal Retirement Benefit is actuarially reduced by 3.00% for each year to age 50 and 3.33% for each year from age 50 to age 45 by which the commencement of benefits precedes the member’s Normal Retirement date had the Member continued employment as a firefighter. For this purpose, the Normal Retirement date upon completion of 20 years of Credited Service is disregarded.

Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. Vested Termination: Eligibility: A Member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service. Benefit: The benefit is the Member’s accrued Normal Retirement Benefit as of the date of termination. The benefit is payable at the Member’s Normal Retirement age determined as if the Member continued employment as a firefighter. Alternatively, Members can elect a reduced Early Retirement Benefit anytime after age 45. Members with less than 10 years of Credited Service will receive a refund of their own accumulated contributions.

The Plan is a single-employer defined benefit pension plan administered by the Plan’s Board of Trustees comprised of: Two Council appointees, two Members of the Plan elected by the membership, and a fifth Member elected by other four and appointed by Council as a ministerial duty.

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GASB 67

Non-Service Connected Disability

Contributions Member Contributions: 5.5% of Compensation.

Eligibility: Any member who has 10 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter is immediately eligible for a disability benefit. Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 30% of average salary over the 5 highest years of Credited Service. Death Benefits in the Line of Duty: Eligibility: Any Member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service. Benefit: 50% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 15% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student); 50% total maximum for all such children. Other Pre-Retirement Death Benefits: Eligibility: Any Member who dies, and whose death is not attributable to active duty or service, while employed as a firefighter by the City is eligible for survivor benefits regardless of Credited Service.

Share Plan: 75% of the Excess State Monies received each fiscal year (amounts above $283,050.40) are allocated equally among Eligible Members.

Benefit: 25% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 7.5% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student).

Employer Contributions: Chapter 175 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws.

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GASB 67

Investments Investment Policy: The following was the Board’s adopted asset allocation policy as of September 30, 2017:

Asset Class Target Allocation Domestic Equity 52.50% International Equity 12.50% Domestic Fixed Income 25.00% Real Estate 10.00% Total 100.00%

Concentrations:

Rate of Return:

Deferred Retirement Option Program

The DROP balance as September 30, 2017 is $282,008.

The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan’s Fiduciary Net Position.

The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

For the year ended September 30, 2017, the annual money-weighted rate of return on Pension Plan investments, net of Pension Plan investment expense, was 7.55 percent.

Maximum Interest Credited: The Member’s average daily balance of the DROP account is debited or credited with interest on a quarterly basis at a rate equal to the Trust Fund’s net investment return for the quarter.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Members who meet eligibility must submit a written election to participate in the DROP.

Maximum DROP Period: The earlier of 5 years of participation in the DROP or when the Member has completed 30 years of Credited Service.

Benefit: The member’s Credited Service and FAC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and FAC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire. DROP participants do not receive the supplement until actual termination of employment.

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GASB 67

The components of the Net Pension Liability of the Sponsor on September 30, 2017 were as follows:

Total Pension Liability 27,617,626$ Plan Fiduciary Net Position (26,900,084)$ Sponsor’s Net Pension Liability 717,542$ Plan Fiduciary Net Position as a percentage of Total Pension Liability 97.40%

Actuarial Assumptions:

Inflation 2.50% Salary Increases Service based Discount Rate 7.50% Investment Rate of Return 7.50%

Mortality Rate Healthy Lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB. Mortality Rate 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.

The most recent actuarial experience study used to review the other significant assumptions was dated October 3, 2016.

Domestic Equity 7.50% International Equity 8.50% Domestic Fixed Income 2.50% Real Estate 4.50%

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2016 updated to September 30, 2017 using the following actuarial assumptions:

NET PENSION LIABILITY OF THE SPONSOR

The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.

These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan’s target asset allocation as of September 30, 2017 are summarized in the following table:

Long Term Expected Real Rate of ReturnAsset Class

For 2017 the inflation rate assumption of the investment advisor was 2.50%.

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GASB 67

Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.50 percent.

1% Decrease Current

Discount Rate 1% Increase 6.50% 7.50% 8.50%

Sponsor’s Net Pension Liability 3,904,479$ 717,542$ (1,955,528)$

The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.

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GASB 67

09/30/2017 09/30/2016 09/30/2015 Total Pension Liability Service Cost 856,749 818,555 795,653 Interest 1,969,652 1,946,348 1,800,848 Change in Excess State Money – – 5,213 Share Plan Allocation 11,304 2,432 15,635 Changes of benefit terms – 495,699 – Differences between Expected and Actual Experience (89,355) (836,436) (214,235) Changes of assumptions – 201,521 – Contributions – Buy Back 1,118 73,537 32,877 Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Net Change in Total Pension Liability 1,611,073 1,649,107 1,344,606 Total Pension Liability – Beginning 26,006,553 24,357,446 23,012,840 Total Pension Liability – Ending (a) 27,617,626$ 26,006,553$ 24,357,446$

Plan Fiduciary Net Position Contributions – Employer 446,583 442,686 501,383 Contributions – State 298,122 286,293 303,898 Contributions – Employee 180,673 186,769 178,122 Contributions – Buy Back 1,118 73,537 32,877 Net Investment Income 1,888,678 1,676,263 (353,976) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Administrative Expense (62,596) (69,374) (76,367) Net Change in Plan Fiduciary Net Position 1,614,183 1,543,625 (505,448) Plan Fiduciary Net Position – Beginning 25,285,901 23,742,276 24,247,724 Plan Fiduciary Net Position – Ending (b) $ 26,900,084 $ 25,285,901 $ 23,742,276

Net Pension Liability – Ending (a) – (b) 717,542$ 720,652$ 615,170$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 97.40% 97.23% 97.47%

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ Net Pension Liability as a percentage of Covered Employee Payroll 21.84% 21.22% 18.71%

Notes to Schedule:

Changes of benefit terms:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

For measurement date 09/30/2016, Ordinance 16-22 was adopted. The change was an increase in the Supplemental benefit from $3 to $13 per month per year of service up to a maximum of $325 for Members who retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

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GASB 67

Changes of assumptions:

For measurement date 09/30/2015, the inflation assumption was lowered from 3.50% to 3.00%

In addition, the inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan’s investment consultant.

• The assumed rates of individual salary increase were reduced as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The assumed rates of retirement were reduced at each age, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

For measurement date 09/30/2016, as a result of an October 3, 2016 Experience Study and as a result of recent State legislation, the Board has made the following assumption changes: • The assumed rates of mortality were changed to match those used by the FRS for special risk employees in their July 1, 2015 valuation report. • The expected withdrawal rates were reduced, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The investment return assumption was reduced from 7.75% to 7.50% per year, net of investment related expenses.

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GASB 67

09/30/2014 09/30/2013 Total Pension Liability Service Cost 793,320 736,260 Interest 1,685,549 1,586,064 Change in Excess State Money 9,746 – Share Plan Allocation 29,234 – Changes of benefit terms – – Differences between Expected and Actual Experience – – Changes of assumptions – – Contributions – Buy Back 64,645 – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) Net Change in Total Pension Liability 1,499,188 1,214,216 – Total Pension Liability – Beginning 21,513,652 20,299,436 Total Pension Liability – Ending (a) 23,012,840$ 21,513,652$ -$

Plan Fiduciary Net Position Contributions – Employer 510,314 549,848 Contributions – State 322,030 314,996 Contributions – Employee 176,623 172,605 Contributions – Buy Back 64,645 – Net Investment Income 1,904,122 2,667,160 Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) Administrative Expense (44,389) (48,564) Net Change in Plan Fiduciary Net Position 1,850,039 2,547,937 Plan Fiduciary Net Position – Beginning 22,397,685 19,849,748 Plan Fiduciary Net Position – Ending (b) $ 24,247,724 $ 22,397,685

Net Pension Liability – Ending (a) – (b) (1,234,884)$ (884,033)$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 105.37% 104.11%

Covered Employee Payroll¹ 3,211,327$ 3,138,275$ Net Pension Liability as a percentage of Covered Employee Payroll -38.45% -28.17%

Notes to Schedule:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

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GASB 67

09/30/2017 09/30/2016 09/30/2015 09/30/2014 09/30/2013 Actuarially Determined Contribution 733,401 725,736 784,433 793,364 832,898 Contributions in relation to the Actuarially Determined Contributions 733,401 725,736 784,433 793,364 832,898 Contribution Deficiency (Excess) -$ -$ -$ -$ -$

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ 3,211,327$ 3,138,275$ Contributions as a percentage of Covered Employee Payroll 22.33% 21.37% 23.85% 24.71% 26.54%

Notes to Schedule

Valuation Date: 10/01/2015 (AIS 05/03/2016)

Methods and assumptions used to determine contribution rates:

Funding Method: Amortization Method: Remaining Amortization Period: Mortality Rates:

Termination Rates: Service Probability 0 15.0% 1 15.0% 2 7.0% 3 7.0% 4 5.0% 5 5.0% 6 4.0% 7 4.0% 8 2.0% 9 2.0%

10+ 0.5%

Disability Rates:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

The assumed rates of termination were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations.

Entry Age Normal Cost Method. Level Percentage of Pay, Closed. 30 Years.

SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years

Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.

RP2000 Generational Mortality Table – Sex Distinct. Disabled lives set forward 5 years. This assumption sufficiently accommodates for expected future mortality

See sample rates on following page. 75% of disabilities are assumed to be service- incurred. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters.

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GASB 67

Retirement Rates:

Interest Rate:

Salary Increases: Years of 0 1 2 3 4 5 6 7 8 9

10 11 12 13

14+

Payroll Growth:

Funding Projection:

Actuarial Asset Method:

Disability Rates: Age 20 25 30 35 40 45 50

5+

Number of Years After First Eligibility For Normal

Retirement Probability of Normal

Retirement

0.15% 0.18%

35%0

The required dollar contributions for the following year include a half-year of interest and a full year of salary increase based on the expected average salary increase for the upcoming year.

The assumed rates of salary increase were approved in conjunction with a special actuarial analysis dated March 16, 2012.

1 2 3 4

20% 20% 20% 20%

100%

8.0%

0.51% 1.00%

% Increase in Salary

0.23% 0.30%

% Becoming Disabled During the Year 0.14%

5.5%

14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.5%

4.0%

All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period.

Additionally, the assumed rate of retirement is 5.00% for each year of eligibility for early retirement. The assumed rates of retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. 7.75% per year, compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.

1.77% per year for amortization of the Unfunded Actuarial Accrued Liability. This is in compliance with Part VII of Chapter 112, Florida Statutes.

7.5% 7.0% 6.5% 6.0%

5.0%

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09/30/2017 09/30/2016 09/30/2015 09/30/2014 09/30/2013 Annual Money-Weighted Rate of Return Net of Investment Expense 7.55% 7.12% -1.47% 8.56% 13.40%

SCHEDULE OF INVESTMENT RETURNS Last 10 Fiscal Years

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General Information about the Pension Plan

Plan Description

All actively employed full-time firefighters participate in the Plan as a condition of employment.

Plan Membership as of October 1, 2016:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits 46 Inactive Plan Members Entitled to But Not Yet Receiving Benefits – Active Plan Members 49

95

Benefits Provided

Normal Retirement:

Early Retirement:

Delayed Retirement:

Eligibility: A Member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service.

Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 30% of average salary over the 5 highest years of Credited Service.

Benefit: The Normal Retirement Benefit is actuarially reduced by 3.00% for each year to age 50 and 3.33% for each year from age 50 to age 45 by which the commencement of benefits precedes the member’s Normal Retirement date had the Member continued employment as a firefighter. For this purpose, the Normal Retirement date upon completion of 20 years of Credited Service is disregarded.

Date: A Member may retire on the first day of the month coincident with or next following age 45 and 10 years of Credited Service.

Benefit: The benefit is the Member’s accrued Normal Retirement Benefit as of the date of termination. The benefit is payable at the Member’s Normal Retirement age determined as if the Member continued employment as a firefighter. Alternatively, Members can elect a reduced Early Retirement Benefit anytime after age 45. Members with less than 10 years of Credited Service will receive a refund of their own accumulated contributions. Service Connected Disability

Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement.

NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2018)

Vested Termination:

Eligibility: Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter as a result from an act occurring in the performance of service for the City is immediately eligible for a disability benefit.

Non-Service Connected Disability

Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 60% of average salary over the 5 highest years of Credited Service.

Eligibility: Any member who has 10 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter is immediately eligible for a disability benefit.

The Plan provides retirement, termination, disability and death benefits.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Benefit: 3% of AFC multiplied by Credited Service up to 25 years plus 2% of AFC multiplied by Credited Service in excess of 37.5 years. Total benefit is limited to 100% of AFC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

The Plan is a single-employer defined benefit pension plan administered by the Plan’s Board of Trustees comprised of: Two Council appointees, two Members of the Plan elected by the membership, and a fifth Member elected by other four and appointed by Council as a ministerial duty.

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Net Pension Liability

The measurement date is September 30, 2017. The measurement period for the pension expense was October 1, 2016 to September 30, 2017. The reporting period is October 1, 2017 through September 30, 2018.

The Sponsor’s Net Pension Liability was measured as of September 30, 2017. The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date.

Actuarial Assumptions:

Inflation 2.50% Salary Increases Service based Discount Rate 7.50% Investment Rate of Return 7.50%

Mortality Rate 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.

For 2017 the inflation rate assumption of the investment advisor was 2.50%.

The most recent actuarial experience study used to review the other significant assumptions was dated October 3, 2016.

Death Benefits in the Line of Duty:

The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.

Contributions Member Contributions: 5.5% of Compensation. Employer Contributions: Chapter 175 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws.

Eligibility: Any Member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service. Benefit: 50% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 15% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student); 50% total maximum for all such children. Other Pre-Retirement Death Benefits: Eligibility: Any Member who dies, and whose death is not attributable to active duty or service, while employed as a firefighter by the City is eligible for survivor benefits regardless of Credited Service. Benefit: 25% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 7.5% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student).

These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB.

Mortality Rate Healthy Lives:

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2016 updated to September 30, 2017 using the following actuarial assumptions:

Share Plan: 75% of the Excess State Monies received each fiscal year (amounts above $283,050.40) are allocated equally among Eligible Members.

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Asset Class Target Allocation Long Term Expected Real Rate of Return

Domestic Equity 52.50% 7.50% International Equity 12.50% 8.50% Domestic Fixed Income 25.00% 2.50% Real Estate 10.00% 4.50% Total 100.00%

Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.50 percent.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan’s target asset allocation as of September 30, 2017 are summarized in the following table:

The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.

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Total Pension Liability

Plan Fiduciary Net Position

Net Pension Liability

(a) (b) (a)-(b) Reporting Period Ending September 30, 2017 $ 26,006,553 $ 25,285,901 $ 720,652 Changes for a Year:

Service Cost 856,749 – 856,749 Interest 1,969,652 – 1,969,652 Share Plan Allocation 11,304 – 11,304 Differences between Expected and Actual Experience (89,355) – (89,355) Changes of assumptions – – – Changes of benefit terms – – – Contributions – Employer – 446,583 (446,583) Contributions – State – 298,122 (298,122) Contributions – Employee – 180,673 (180,673) Contributions – Buy Back 1,118 1,118 – Net Investment Income – 1,888,678 (1,888,678) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,138,395) – Administrative Expense – (62,596) 62,596

Net Changes 1,611,073 1,614,183 (3,110) Reporting Period Ending September 30, 2018 $ 27,617,626 $ 26,900,084 $ 717,542

Sensitivity of the Net Pension Liability to changes in the Discount Rate.

1% Decrease Current Discount

Rate 1% Increase 6.50% 7.50% 8.50%

Sponsor’s Net Pension Liability 3,904,479$ 717,542$ (1,955,528)$

Pension Plan Fiduciary Net Position. Detailed information about the pension Plan’s Fiduciary Net Position is available in a separately issued Plan financial report.

Increase (Decrease)

CHANGES IN NET PENSION LIABILITY

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For the year ended September 30, 2017, the Sponsor has recognized a Pension Expense of $1,584,028.

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between Expected and Actual Experience – 797,689 Changes of assumptions 161,216 – Net difference between Projected and Actual Earnings on Pension Plan investments 1,395,125 – Employer and State Contributions subsequent to the measurement date 744,705 – Total 2,301,046$ 797,689$

OUTFLOW Year ended September 30: 2018 (210,135)$ 443,106$ 273,277$ 2019 (228,005)$ 442,602$ 273,277$ 2020 (228,005)$ 442,601$ 307,356$ 2021 (228,005)$ 476,680$ (95,258)$ 2022 (185,158)$ 31,219$ -$ Thereafter 281,619$ (441,083)$ -$

Payable to the Pension Plan

On September 30, 2017, the Sponsor reported a payable of $57,462 for the outstanding amount of contributions of the Pension Plan required for the year ended September 30, 2017.

FINAL PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS

FISCAL YEAR SEPTEMBER 30, 2017

On September 30, 2017, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State Contributions subsequent to the measurement date has been recognized as a reduction of the Net Pension Liability in the year ended September 30, 2017. Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows:

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For the year ended September 30, 2018, the Sponsor will recognize a Pension Expense of $1,088,380.

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between Expected and Actual Experience – 659,039 Changes of assumptions 120,912 – Net difference between Projected and Actual Earnings on Pension Plan investments 949,994 – Employer and State Contributions subsequent to the measurement date TBD – Total TBD 659,039$

OUTFLOW INFLOW Year ended September 30: 2019 (228,005)$ 40,304$ 442,601$ 254,900$ 2020 (228,005)$ 40,304$ 476,680$ 288,979$ 2021 (185,158)$ 40,304$ 31,219$ (113,635)$ 2022 (17,871)$ -$ (506)$ (18,377)$ 2023 -$ -$ -$ -$ Thereafter -$ -$ -$ -$

Payable to the Pension Plan

PRELIMINARY PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS

On September 30, 2017, the Sponsor reported a payable of $57,462 for the outstanding amount of contributions of the Pension Plan required for the year ended September 30, 2017.

On September 30, 2018, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows:

The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State Contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended September 30, 2018.

FISCAL YEAR SEPTEMBER 30, 2018

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Reporting Period Ending 09/30/2018 09/30/2017 09/30/2016 Measurement Date 09/30/2017 09/30/2016 09/30/2015 Total Pension Liability Service Cost 856,749 818,555 795,653 Interest 1,969,652 1,946,348 1,800,848 Change in Excess State Money – – 5,213 Share Plan Allocation 11,304 2,432 15,635 Changes of benefit terms – 495,699 – Differences between Expected and Actual Experience (89,355) (836,436) (214,235) Changes of assumptions – 201,521 – Contributions – Buy Back 1,118 73,537 32,877 Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Net Change in Total Pension Liability 1,611,073 1,649,107 1,344,606 Total Pension Liability – Beginning 26,006,553 24,357,446 23,012,840 Total Pension Liability – Ending (a) $ 27,617,626 $ 26,006,553 $ 24,357,446

Plan Fiduciary Net Position Contributions – Employer 446,583 442,686 501,383 Contributions – State 298,122 286,293 303,898 Contributions – Employee 180,673 186,769 178,122 Contributions – Buy Back 1,118 73,537 32,877 Net Investment Income 1,888,678 1,676,263 (353,976) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Administrative Expense (62,596) (69,374) (76,367) Net Change in Plan Fiduciary Net Position 1,614,183 1,543,625 (505,448) Plan Fiduciary Net Position – Beginning 25,285,901 23,742,276 24,247,724 Plan Fiduciary Net Position – Ending (b) $ 26,900,084 $ 25,285,901 $ 23,742,276

Net Pension Liability – Ending (a) – (b) 717,542$ 720,652$ 615,170$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 97.40% 97.23% 97.47%

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ Net Pension Liability as a percentage of Covered Employee Payroll 21.84% 21.22% 18.71%

Notes to Schedule:

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Changes of benefit terms: For measurement date 09/30/2016, Ordinance 16-22 was adopted. The change was an increase in the Supplemental benefit from $3 to $13 per month per year of service up to a maximum of $325 for Members who retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

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For measurement date 09/30/2015, the inflation assumption was lowered from 3.50% to 3.00%

• The investment return assumption was reduced from 7.75% to 7.50% per year, net of investment related expenses. • The assumed rates of individual salary increase were reduced as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The assumed rates of retirement were reduced at each age, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

Changes of assumptions: For measurement date 09/30/2016, as a result of an October 3, 2016 Experience Study and as a result of recent State legislation, the Board has made the following assumption changes: • The assumed rates of mortality were changed to match those used by the FRS for special risk employees in their July 1, 2015 valuation report. • The expected withdrawal rates were reduced, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

In addition, the inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan’s investment consultant.

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Reporting Period Ending 09/30/2015 09/30/2014 Measurement Date 09/30/2014 09/30/2013 Total Pension Liability Service Cost 793,320 736,260 – Interest 1,685,549 1,586,064 – Change in Excess State Money 9,746 – – Share Plan Allocation 29,234 – – Changes of benefit terms – – – Differences between Expected and Actual Experience – – – Changes of assumptions – – – Contributions – Buy Back 64,645 – – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) – Net Change in Total Pension Liability 1,499,188 1,214,216 – Total Pension Liability – Beginning 21,513,652 20,299,436 – Total Pension Liability – Ending (a) $ 23,012,840 $ 21,513,652 $ –

Plan Fiduciary Net Position Contributions – Employer 510,314 549,848 – Contributions – State 322,030 314,996 – Contributions – Employee 176,623 172,605 – Contributions – Buy Back 64,645 – – Net Investment Income 1,904,122 2,667,160 – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) – Administrative Expense (44,389) (48,564) – Net Change in Plan Fiduciary Net Position 1,850,039 2,547,937 – Plan Fiduciary Net Position – Beginning 22,397,685 19,849,748 – Plan Fiduciary Net Position – Ending (b) $ 24,247,724 $ 22,397,685 $ –

Net Pension Liability – Ending (a) – (b) (1,234,884)$ (884,033)$ -$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 105.37% 104.11% #DIV/0!

Covered Employee Payroll¹ 3,211,327$ 3,138,275$ -$ Net Pension Liability as a percentage of Covered Employee Payroll -38.45% -28.17% #DIV/0!

Notes to Schedule:

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

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09/30/2017 09/30/2016 09/30/2015 09/30/2013 09/30/2013 Actuarially Determined Contribution 733,401 725,736 784,433 832,898 832,898 Contributions in relation to the Actuarially Determined Contributions 733,401 725,736 784,433 832,898 832,898 Contribution Deficiency (Excess) $ – $ – $ – $ – $ –

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ 3,138,275$ 3,138,275$ Contributions as a percentage of Covered Employee Payroll 22.33% 21.37% 23.85% 26.54% 26.54%

Notes to Schedule

Valuation Date: 10/01/2015 (AIS 05/03/2016)

Methods and assumptions used to determine contribution rates:

Funding Method: Amortization Method: Remaining Amortization Period: Mortality Rates:

Termination Rates: Service Probability 0 15.0% 1 15.0% 2 7.0% 3 7.0% 4 5.0% 5 5.0% 6 4.0% 7 4.0% 8 2.0% 9 2.0%

10+ 0.5%

Disability Rates: See sample rates on following page. 75% of disabilities are assumed to be service- incurred. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters.

SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.

The assumed rates of termination were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations.

RP2000 Generational Mortality Table – Sex Distinct. Disabled lives set forward 5 years. This assumption sufficiently accommodates for expected future mortality improvements.

30 Years.

Entry Age Normal Cost Method. Level Percentage of Pay, Closed.

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Retirement Rates:

Interest Rate:

Salary Increases: Years of Service

% Increase in Salary

0 14.0% 1 13.0% 2 12.0% 3 11.0% 4 10.0% 5 9.0% 6 8.5% 7 8.0% 8 7.5% 9 7.0%

10 6.5% 11 6.0% 12 5.5% 13 5.0%

14+ 4.0%

Payroll Growth:

Funding Projection:

Actuarial Asset Method:

Disability Rates: Age 20 25 30 35 40 45 50

5+ 100%

1.77% per year for amortization of the Unfunded Actuarial Accrued Liability. This is in compliance with Part VII of Chapter 112, Florida Statutes. The required dollar contributions for the following year include a half-year of interest and a full year of salary increase based on the expected average salary increase for the upcoming year.

All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period.

Additionally, the assumed rate of retirement is 5.00% for each year of eligibility for early retirement. The assumed rates of retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. 7.75% per year, compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.

The assumed rates of salary increase were approved in conjunction with a special actuarial analysis dated March 16, 2012.

20% 3 20% 4 20%

Number of Years After First Eligibility For Normal

Retirement Probability of Normal

Retirement

1.00%

0.15% 0.18% 0.23% 0.30% 0.51%

% Becoming Disabled During the Year 0.14%

0 35% 1 20% 2

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Net Pension Liability

Deferred Inflows

Deferred Outflows

Pension Expense

Beginning balance $ 615,170 $ 273,625 $ 2,510,823 $ –

Employer and State Contributions made after 09/30/2016 – – 744,705 –

Total Pension Liability Factors: Service Cost 818,555 – – 818,555 Interest 1,946,348 – – 1,946,348 Change in Excess State Money 2,432 – – 2,432 Share Plan Allocation 495,699 – – 495,699 Changes in benefit terms – – – – Contributions – Buy Back 73,537 – – 73,537 Differences between Expected and Actual Experience with regard to economic or demographic assumptions (836,436) 836,436 – – Current year amortization of experience difference – (210,135) – (210,135) Change in assumptions about future economic or demographic factors or other inputs 201,521 – 201,521 – Current year amortization of change in assumptions – – (40,305) 40,305 Benefit Payments, including Refunds of Employee Contributions (1,052,549) – – –

Net change 1,649,107 626,301 905,921 3,166,741

Plan Fiduciary Net Position: Contributions – Employer 442,686 – (442,686) – Contributions – State 286,293 – (286,293) – Contributions – Employee 186,769 – – (186,769) Contributions – Buy Back 73,537 – – (73,537) Projected Net Investment Income 1,834,887 – – (1,834,887) Difference between projected and actual earnings on Pension Plan investments (158,624) – 158,624 – Current year amortization – (34,079) (477,185) 443,106 Benefit Payments, including Refunds of Employee Contributions (1,052,549) – – – Administrative Expenses (69,374) – – 69,374

Net change 1,543,625 (34,079) (1,047,540) (1,582,713)

Ending Balance $ 720,652 $ 865,847 $ 2,369,204 $ 1,584,028

FINAL COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2017

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Net Pension Liability

Deferred Inflows

Deferred Outflows

Pension Expense

Beginning balance $ 720,652 $ 865,847 $ 2,369,204 $ –

Employer and State Contributions made after 09/30/2017 – – TBD* –

Total Pension Liability Factors: Service Cost 856,749 – – 856,749 Interest 1,969,652 – – 1,969,652 Share Plan Allocation 11,304 – – 11,304 Changes in benefit terms – – – – Contributions – Buy Back 1,118 – – 1,118 Differences between Expected and Actual Experience with regard to economic or demographic assumptions (89,355) 89,355 – – Current year amortization of experience difference – (228,005) – (228,005) Change in assumptions about future economic or demographic factors or other inputs – – – – Current year amortization of change in assumptions – – (40,304) 40,304 Benefit Payments, including Refunds of Employee Contributions (1,138,395) – – –

Net change 1,611,073 (138,650) (40,304) 2,651,122

Plan Fiduciary Net Position: Contributions – Employer 446,583 – (446,583) – Contributions – State 298,122 – (298,122) – Contributions – Employee 180,673 – – (180,673) Contributions – Buy Back 1,118 – – (1,118) Projected Net Investment Income 1,886,149 – – (1,886,149) Difference between projected and actual earnings on Pension Plan investments 2,529 2,529 – – Current year amortization – (34,584) (477,186) 442,602 Benefit Payments, including Refunds of Employee Contributions (1,138,395) – – – Administrative Expenses (62,596) – – 62,596

Net change 1,614,183 (32,055) (1,221,891) (1,562,742)

Ending Balance $ 717,542 $ 695,142 TBD $ 1,088,380

PRELIMINARY COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2018

* Employer and State Contributions subsequent to the measurement date made after September 30, 2017 but made on or before September 30, 2018 need to be added.

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Increase (Decrease) in Pension Expense Arising from the Recognition of the of Differences Between Projected and Actual Earnings on Pension Plan Investments

Plan Year Ending

Differences Between Projected and Actual

Earnings Recognition

Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Recognitio 3 4 5 6 7 8 9 10 11 12 13

2014 (170,397)$ 5 (34,079)$ (34,079)$ (34,079)$ -$ -$ -$ -$ -$ -$ -$ -$ 2015 2,227,305$ 5 445,461$ 445,461$ 445,461$ 445,461$ -$ -$ -$ -$ -$ -$ -$ 2016 158,624$ 5 31,724$ 31,725$ 31,725$ 31,725$ 31,725$ -$ -$ -$ -$ -$ -$ 2017 (2,529)$ 5 -$ (505)$ (506)$ (506)$ (506)$ (506)$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense 443,106$ 442,602$ 442,601$ 476,680$ 31,219$ (506)$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – INVESTMENTS

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Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Changes of Assumptions

Plan Year Ending

Changes of Assumptions

Recognition Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Recognitio 3 4 5 6 7 8 9 10 11 12 13 2016 201,521$ 5 40,305$ 40,304$ 40,304$ 40,304$ 40,304$ -$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense 40,305$ 40,304$ 40,304$ 40,304$ 40,304$ -$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – CHANGES OF ASSUMPTIONS

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Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience

Plan Year Ending

Differences Between Expected and Actual

Experience Recognition

Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Recognitio 3 4 5 6 7 8 9 10 11 12 13

2015 (214,235)$ 5 (42,847)$ (42,847)$ (42,847)$ (42,847)$ -$ -$ -$ -$ -$ -$ -$ 2016 (836,436)$ 5 (167,288)$ (167,287)$ (167,287)$ (167,287)$ (167,287)$ -$ -$ -$ -$ -$ -$ 2017 (89,355)$ 5 -$ (17,871)$ (17,871)$ (17,871)$ (17,871)$ (17,871)$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense (210,135)$ (228,005)$ (228,005)$ (228,005)$ (185,158)$ (17,871)$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – EXPERIENCE

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 30City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 67

  • GASB No.67 and No.68 Statements – Dunedin Fire – Measurement date 09.30.2017.pdf
    • Balance Sheet 67
    • Market Net Assets 67
    • Info for Notes 67
    • Sponsor NPO 67
    • Schedule of NP Changes 67
    • Schedule of Contribution 67
    • Return Schedule 67
    • Info for Notes 68 p1-2
    • Info for Notes 68 p3
    • Final Deferred Flows 68
    • Preliminary Deferred Flows 68
    • Schedule of NP Changes 68
    • Schedule of Contribution 68
    • Final Expense 68
    • Preliminary Expense 68
    • Investment
    • Assumption Changes
    • Experience

Paper

June 26, 2017

VIA EMAIL

Mr. Patrick Kroeger, Plan Administrator City of Dunedin Firefighters’ Retirement System P.O. Box 548 Palm Harbor, FL 34682

Re: City of Dunedin Firefighters’ Retirement System Senate Bill 534 (Section 112.664, Florida Statutes) Compliance

Dear Patrick:

Please find enclosed the annual disclosures that satisfy the October 1, 2016 financial reporting requirements made under Section 112.664.

Our office will submit this information electronically to the Department of Management Services. However, it is important for you to be aware that this report must also be made available on the Plan or Plan Sponsor’s website, if such website exists. A deadline for this website publication is not made clear in the law.

In addition to the enclosed report, the Plan or Plan Sponsor’s website must provide a link to the Division of Retirement’s Actuarial Summary Fact Sheet for the Plan, and also report the previous five years’ assumed and actual rates of return, along with their respective asset allocations. The Board should contact its Investment Consultant for this information.

If there are any questions, concerns, or comments about any of the items contained in this report, please feel free to contact me.

Respectfully submitted,

Foster & Foster, Inc.

By: _________________________

Patrick T. Donlan, EA, ASA, MAAA Enrolled Actuary #17-6595

PTD/lke Enclosures

13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · Fax (239) 481-0634 · www.foster-foster.com

cc via email: H. Lee Dehner, Board Attorneyhttp://www.foster-foster.com/

CITY OF DUNEDIN FIREFIGHTERS’ RETIREMENT SYSTEM

SECTION 112.664, FLORIDA STATUTES

COMPLIANCE

With respect to the reporting standards for defined benefit retirement plans or systems contained in Section

112.664(1), F.S., the actuarial disclosures required under this section were prepared and completed by me

or under my direct supervision and I acknowledge responsibility for the results. To the best of my

knowledge, the results are complete and accurate, and in my opinion, meet the requirements of Section

112.664(1), Florida Statutes, and Rule 60T-1.0035, Florida Administrative Code.

By: Date: 6/26/2017 Patrick T. Donlan, EA, ASA, MAAA Enrolled Actuary #17-6595

When reviewing the following schedules, please note the following:

1) The purpose of producing this report is solely to satisfy the requirements set forth by Section 112.664, Florida Statutes, and is mandatory for every Florida public pension fund, excluding the Florida Retirement System (FRS).

2) None of the schedules shown have any impact on the funding requirements of the Plan. These schedules are for statutory compliance purposes only.

3) In the schedules that follow, the columns labeled “ACTUAL” represent the final recorded GASB 67/68 results. The columns labeled “HYPOTHETICAL” illustrate what the results would have been if different assumptions were used.

4) It is our opinion that the Plan’s actual assumptions utilized in the October 1, 2016 Actuarial Valuation Report, as adopted by the Board of Trustees, are reasonable individually and in the aggregate, and represent our best estimate of future Plan experience.

5) The “Number of Years Expected Benefit Payments Sustained” calculated in Section II: Asset Sustainability should not be interpreted as the number of years the Plan has left until it is insolvent. This calculation is required by 112.664, Florida Statutes, but the numeric result is irrelevant, since in its calculation we are to assume there will be no further contributions to the Fund. As long as the Actuarially Determined Contribution is made each year the Plan will never become insolvent.

___________________________________________________________________________________________________________________________

INTRODUCTION Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 3

______________________________________________________________________________________________________________________

ACTUAL

7.50% 5.50% 9.50% RP-2000 RP-2000 RP-2000

Generational Generational Generational

Total Pension Liability Service Cost 818,555 1,220,561 567,379 Interest 1,946,348 1,820,155 1,999,876 Share Plan Allocation 2,432 2,432 2,432 Changes of Benefit Terms 495,699 643,029 393,485 Differences Between Expected and Actual Experience (836,436) (950,124) (758,852) Changes of Assumptions 201,521 583,138 (18,863) Contributions – Buy Back 73,537 73,537 73,537 Benefit Payments, Including Refunds of Employee Contributions (1,052,549) (1,052,549) (1,052,549) Net Change in Total Pension Liability 1,649,107 2,340,179 1,206,445 Total Pension Liability – Beginning 24,357,446 30,348,811 20,108,217 Total Pension Liability – Ending (a) 26,006,553$ 32,688,990$ 21,314,662$

Plan Fiduciary Net Position Contributions – Employer 442,686 442,686 442,686 Contributions – State 286,293 286,293 286,293 Contributions – Employee 186,769 186,769 186,769 Contributions – Buy Back 73,537 73,537 73,537 Net Investment Income 1,676,263 1,676,263 1,676,263 Benefit Payments, Including Refunds of Employee Contributions (1,052,549) (1,052,549) (1,052,549) Administrative Expenses (69,374) (69,374) (69,374)

Net Change in Plan Fiduciary Net Position 1,543,625 1,543,625 1,543,625 Plan Fiduciary Net Position – Beginning 23,742,276 23,742,276 23,742,276 Plan Fiduciary Net Position – Ending (b) $ 25,285,901 $ 25,285,901 $ 25,285,901

Net Pension Liability – Ending (a) – (b) 720,652$ 7,403,089$ (3,971,239)$

ACTUAL

7.75% 5.75% 9.75%

Pension Expense 1,010,799$ 1,580,970$ 517,057$

GASB 68: PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2016

HYPOTHETICAL

GASB 67: SCHEDULE OF CHANGES IN NET PENSION LIABILITY FISCAL YEAR SEPTEMBER 30, 2016

HYPOTHETICAL

SECTION I – GASB 67/68 Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 4

______________________________________________________________________________________________________________________________________________________

Fiscal Year

Beginning 10/1

Projected Beginning

Fiduciary Net Position

Projected Total

Contributions

Projected Benefit

Payments*

Projected

Administrative

Expense

Projected Investment

Earnings

Projected Ending

Fiduciary Net Position

2016 25,285,901 – 1,546,607 – 1,838,445 25,577,739

2017 25,577,739 – 1,403,346 – 1,865,705 26,040,098

2018 26,040,098 – 1,451,239 – 1,898,586 26,487,445

2019 26,487,445 – 1,555,824 – 1,928,215 26,859,836

2020 26,859,836 – 1,652,093 – 1,952,534 27,160,277

2021 27,160,277 – 1,743,140 – 1,971,653 27,388,790

2022 27,388,790 – 1,803,578 – 1,986,525 27,571,737

2023 27,571,737 – 1,875,111 – 1,997,564 27,694,190

2024 27,694,190 – 1,933,085 – 2,004,574 27,765,679

2025 27,765,679 – 1,984,460 – 2,008,009 27,789,228

2026 27,789,228 – 2,007,809 – 2,008,899 27,790,318

2027 27,790,318 – 2,101,232 – 2,005,478 27,694,564

2028 27,694,564 – 2,134,856 – 1,997,035 27,556,743

2029 27,556,743 – 2,133,879 – 1,986,735 27,409,599

2030 27,409,599 – 2,128,834 – 1,975,889 27,256,654

2031 27,256,654 – 2,114,343 – 1,964,961 27,107,272

2032 27,107,272 – 2,094,137 – 1,954,515 26,967,650

2033 26,967,650 – 2,088,219 – 1,944,266 26,823,697

2034 26,823,697 – 2,049,693 – 1,934,914 26,708,918

2035 26,708,918 – 2,005,896 – 1,927,948 26,630,970

2036 26,630,970 – 1,961,148 – 1,923,780 26,593,602

2037 26,593,602 – 1,912,839 – 1,922,789 26,603,552

2038 26,603,552 – 1,865,591 – 1,925,307 26,663,268

2039 26,663,268 – 1,813,907 – 1,931,724 26,781,085

2040 26,781,085 – 1,760,413 – 1,942,566 26,963,238

2041 26,963,238 – 1,706,084 – 1,958,265 27,215,419

2042 27,215,419 – 1,650,644 – 1,979,257 27,544,032

2043 27,544,032 – 1,593,269 – 2,006,055 27,956,818

2044 27,956,818 – 1,536,626 – 2,039,138 28,459,330

2045 28,459,330 – 1,479,646 – 2,078,963 29,058,647

2046 29,058,647 – 1,422,280 – 2,126,063 29,762,430

2047 29,762,430 – 1,364,680 – 2,181,007 30,578,757

2048 30,578,757 – 1,307,356 – 2,244,381 31,515,782

2049 31,515,782 – 1,250,447 – 2,316,792 32,582,127

2050 32,582,127 – 1,193,727 – 2,398,895 33,787,295

2051 33,787,295 – 1,137,170 – 2,491,403 35,141,528

2052 35,141,528 – 1,080,815 – 2,595,084 36,655,797

2053 36,655,797 – 1,024,662 – 2,710,760 38,341,895

2054 38,341,895 – 968,619 – 2,839,319 40,212,595

2055 40,212,595 – 912,801 – 2,981,715 42,281,509

2056 42,281,509 – 857,460 – 3,138,958 44,563,007

2057 44,563,007 – 802,791 – 3,312,121 47,072,337

2058 47,072,337 – 748,926 – 3,502,341 49,825,752

2059 49,825,752 – 695,909 – 3,710,835 52,840,678

2060 52,840,678 – 643,791 – 3,938,909 56,135,796

2061 56,135,796 – 592,911 – 4,187,951 59,730,836

2062 59,730,836 – 543,469 – 4,459,433 63,646,800

2063 63,646,800 – 495,627 – 4,754,924 67,906,097

2064 67,906,097 – 449,688 – 5,076,094 72,532,503

2065 72,532,503 – 405,856 – 5,424,718 77,551,365

Table 1

Plan Assumptions: 7.50% and RP-2000 Generational Mortality

PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS

SECTION II – ASSET SUSTAINABILITY Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 5

______________________________________________________________________________________________________________________________________________________

Fiscal Year

Beginning 10/1

Projected Beginning

Fiduciary Net Position

Projected Total

Contributions

Projected Benefit

Payments*

Projected

Administrative

Expense

Projected Investment

Earnings

Projected Ending

Fiduciary Net Position

Table 1

Plan Assumptions: 7.50% and RP-2000 Generational Mortality

PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS

2066 77,551,365 – 364,229 – 5,802,694 82,989,830

2067 82,989,830 – 325,067 – 6,212,047 88,876,810

2068 88,876,810 – 288,521 – 6,654,941 95,243,230

2069 95,243,230 – 254,545 – 7,133,697 102,122,382

2070 102,122,382 – 223,308 – 7,650,805 109,549,879

2071 109,549,879 – 194,877 – 8,208,933 117,563,935

2072 117,563,935 – 169,142 – 8,810,952 126,205,745

2073 126,205,745 – 145,868 – 9,459,961 135,519,838

2074 135,519,838 – 124,932 – 10,159,303 145,554,209

2075 145,554,209 – 106,308 – 10,912,579 156,360,480

2076 156,360,480 – 89,944 – 11,723,663 167,994,199

2077 167,994,199 – 75,560 – 12,596,731 180,515,370

2078 180,515,370 – 62,923 – 13,536,293 193,988,740

2079 193,988,740 – 51,931 – 14,547,208 208,484,017

2080 208,484,017 – 42,399 – 15,634,711 224,076,329

2081 224,076,329 – 34,198 – 16,804,442 240,846,573

2082 240,846,573 – 27,224 – 18,062,472 258,881,821

2083 258,881,821 – 21,364 – 19,415,335 278,275,792

2084 278,275,792 – 16,572 – 20,870,063 299,129,283

2085 299,129,283 – 12,694 – 22,434,220 321,550,809

2086 321,550,809 – 9,601 – 24,115,951 345,657,159

2087 345,657,159 – 7,177 – 25,924,018 371,574,000

2088 371,574,000 – 5,314 – 27,867,851 399,436,537

2089 399,436,537 – 3,900 – 29,957,594 429,390,231

2090 429,390,231 – 2,841 – 32,204,161 461,591,551

2091 461,591,551 – 2,059 – 34,619,289 496,208,781

2092 496,208,781 – 1,481 – 37,215,603 533,422,903

2093 533,422,903 – 1,063 – 40,006,678 573,428,518

2094 573,428,518 – 759 – 43,007,110 616,434,869

2095 616,434,869 – 539 – 46,232,595 662,666,925

2096 662,666,925 – 381 – 49,700,005 712,366,549

2097 712,366,549 – 268 – 53,427,481 765,793,762

2098 765,793,762 – 186 – 57,434,525 823,228,101

2099 823,228,101 – 128 – 61,742,103 884,970,076

2100 884,970,076 – 86 – 66,372,752 951,342,742

2101 951,342,742 – 57 – 71,350,704 1,022,693,389

2102 1,022,693,389 – 37 – 76,702,003 1,099,395,355

2103 1,099,395,355 – 24 – 82,454,651 1,181,849,982

2104 1,181,849,982 – 15 – 88,638,748 1,270,488,715

2105 1,270,488,715 – 9 – 95,286,653 1,365,775,359

2106 1,365,775,359 – 6 – 102,433,152 1,468,208,505

2107 1,468,208,505 – 3 – 110,115,638 1,578,324,140

2108 1,578,324,140 – 2 – 118,374,310 1,696,698,448

2109 1,696,698,448 – 1 – 127,252,384 1,823,950,831

2110 1,823,950,831 – 1 – 136,796,312 1,960,747,142

2111 1,960,747,142 – – – 147,056,036 2,107,803,178

*All DROP and Share Balances paid in 2016.

Number of Years Expected Benefit Payments Sustained: 999.99

This projection assumes no further contributions, assumes no further benefit accruals, and assumes Market Value of Assets earn 7.50% interest.

It is important to note that as long as the Actuarially Determined Contribution is made each year, the Plan will never become insolvent.

Furthermore, State and local laws mandate that the Actuarially Determined Contribution be made each year.

SECTION II – ASSET SUSTAINABILITY Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 6

______________________________________________________________________________________________________________________________________________________

Fiscal Year

Beginning 10/1

Projected Beginning

Fiduciary Net Position

Projected Total

Contributions

Projected Benefit

Payments*

Projected

Administrative

Expense

Projected Investment

Earnings

Projected Ending

Fiduciary Net Position

2016 25,285,901 – 1,546,607 – 1,348,193 25,087,487

2017 25,087,487 – 1,403,346 – 1,341,220 25,025,361

2018 25,025,361 – 1,451,239 – 1,336,486 24,910,608

2019 24,910,608 – 1,555,824 – 1,327,298 24,682,082

2020 24,682,082 – 1,652,093 – 1,312,082 24,342,071

2021 24,342,071 – 1,743,140 – 1,290,878 23,889,809

2022 23,889,809 – 1,803,578 – 1,264,341 23,350,572

2023 23,350,572 – 1,875,111 – 1,232,716 22,708,177

2024 22,708,177 – 1,933,085 – 1,195,790 21,970,882

2025 21,970,882 – 1,984,460 – 1,153,826 21,140,248

2026 21,140,248 – 2,007,809 – 1,107,499 20,239,938

2027 20,239,938 – 2,101,232 – 1,055,413 19,194,119

2028 19,194,119 – 2,134,856 – 996,968 18,056,231

2029 18,056,231 – 2,133,879 – 934,411 16,856,763

2030 16,856,763 – 2,128,834 – 868,579 15,596,508

2031 15,596,508 – 2,114,343 – 799,664 14,281,829

2032 14,281,829 – 2,094,137 – 727,912 12,915,604

2033 12,915,604 – 2,088,219 – 652,932 11,480,317

2034 11,480,317 – 2,049,693 – 575,051 10,005,675

2035 10,005,675 – 2,005,896 – 495,150 8,494,929

2036 8,494,929 – 1,961,148 – 413,290 6,947,071

2037 6,947,071 – 1,912,839 – 329,486 5,363,718

2038 5,363,718 – 1,865,591 – 243,701 3,741,828

2039 3,741,828 – 1,813,907 – 155,918 2,083,839

2040 2,083,839 – 1,760,413 – 66,200 389,626

2041 389,626 – 1,706,084 – – –

*All DROP and Share Balances paid in 2016.

Number of Years Expected Benefit Payments Sustained: 25.23

This projection assumes no further contributions, assumes no further benefit accruals, and assumes Market Value of Assets earn 5.50% interest.

It is important to note that as long as the Actuarially Determined Contribution is made each year, the Plan will never become insolvent.

Furthermore, State and local laws mandate that the Actuarially Determined Contribution be made each year.

PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS

Table 2

Hypothetical Assumptions: 5.50% and RP-2000 Generational Mortality

SECTION II – ASSET SUSTAINABILITY Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 7

______________________________________________________________________________________________________________________________________________________

Fiscal Year

Beginning 10/1

Projected Beginning

Fiduciary Net Position

Projected Total

Contributions

Projected Benefit

Payments*

Projected

Administrative

Expense

Projected Investment

Earnings

Projected Ending

Fiduciary Net Position

2016 25,285,901 – 1,546,607 – 2,328,697 26,067,991

2017 26,067,991 – 1,403,346 – 2,409,800 27,074,445

2018 27,074,445 – 1,451,239 – 2,503,138 28,126,344

2019 28,126,344 – 1,555,824 – 2,598,101 29,168,621

2020 29,168,621 – 1,652,093 – 2,692,545 30,209,073

2021 30,209,073 – 1,743,140 – 2,787,063 31,252,996

2022 31,252,996 – 1,803,578 – 2,883,365 32,332,783

2023 32,332,783 – 1,875,111 – 2,982,547 33,440,219

2024 33,440,219 – 1,933,085 – 3,084,999 34,592,133

2025 34,592,133 – 1,984,460 – 3,191,991 35,799,664

2026 35,799,664 – 2,007,809 – 3,305,597 37,097,452

2027 37,097,452 – 2,101,232 – 3,424,449 38,420,669

2028 38,420,669 – 2,134,856 – 3,548,558 39,834,371

2029 39,834,371 – 2,133,879 – 3,682,906 41,383,398

2030 41,383,398 – 2,128,834 – 3,830,303 43,084,867

2031 43,084,867 – 2,114,343 – 3,992,631 44,963,155

2032 44,963,155 – 2,094,137 – 4,172,028 47,041,046

2033 47,041,046 – 2,088,219 – 4,369,709 49,322,536

2034 49,322,536 – 2,049,693 – 4,588,281 51,861,124

2035 51,861,124 – 2,005,896 – 4,831,527 54,686,755

2036 54,686,755 – 1,961,148 – 5,102,087 57,827,694

2037 57,827,694 – 1,912,839 – 5,402,771 61,317,626

2038 61,317,626 – 1,865,591 – 5,736,559 65,188,594

2039 65,188,594 – 1,813,907 – 6,106,756 69,481,443

2040 69,481,443 – 1,760,413 – 6,517,117 74,238,147

2041 74,238,147 – 1,706,084 – 6,971,585 79,503,648

2042 79,503,648 – 1,650,644 – 7,474,441 85,327,445

2043 85,327,445 – 1,593,269 – 8,030,427 91,764,603

2044 91,764,603 – 1,536,626 – 8,644,648 98,872,625

2045 98,872,625 – 1,479,646 – 9,322,616 106,715,595

2046 106,715,595 – 1,422,280 – 10,070,423 115,363,738

2047 115,363,738 – 1,364,680 – 10,894,733 124,893,791

2048 124,893,791 – 1,307,356 – 11,802,811 135,389,246

2049 135,389,246 – 1,250,447 – 12,802,582 146,941,381

2050 146,941,381 – 1,193,727 – 13,902,729 159,650,383

2051 159,650,383 – 1,137,170 – 15,112,771 173,625,984

2052 173,625,984 – 1,080,815 – 16,443,130 188,988,299

2053 188,988,299 – 1,024,662 – 17,905,217 205,868,854

2054 205,868,854 – 968,619 – 19,511,532 224,411,767

2055 224,411,767 – 912,801 – 21,275,760 244,774,726

2056 244,774,726 – 857,460 – 23,212,870 267,130,136

2057 267,130,136 – 802,791 – 25,339,230 291,666,575

2058 291,666,575 – 748,926 – 27,672,751 318,590,400

2059 318,590,400 – 695,909 – 30,233,032 348,127,523

2060 348,127,523 – 643,791 – 33,041,535 380,525,267

2061 380,525,267 – 592,911 – 36,121,737 416,054,093

2062 416,054,093 – 543,469 – 39,499,324 455,009,948

2063 455,009,948 – 495,627 – 43,202,403 497,716,724

2064 497,716,724 – 449,688 – 47,261,729 544,528,765

2065 544,528,765 – 405,856 – 51,710,955 595,833,864

PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS

Table 3

Hypothetical Assumptions: 9.50% and RP-2000 Generational Mortality

SECTION II – ASSET SUSTAINABILITY Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 8

______________________________________________________________________________________________________________________________________________________

Fiscal Year

Beginning 10/1

Projected Beginning

Fiduciary Net Position

Projected Total

Contributions

Projected Benefit

Payments*

Projected

Administrative

Expense

Projected Investment

Earnings

Projected Ending

Fiduciary Net Position

PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS

Table 3

Hypothetical Assumptions: 9.50% and RP-2000 Generational Mortality

2066 595,833,864 – 364,229 – 56,586,916 652,056,551

2067 652,056,551 – 325,067 – 61,929,932 713,661,416

2068 713,661,416 – 288,521 – 67,784,130 781,157,025

2069 781,157,025 – 254,545 – 74,197,826 855,100,306

2070 855,100,306 – 223,308 – 81,223,922 936,100,920

2071 936,100,920 – 194,877 – 88,920,331 1,024,826,374

2072 1,024,826,374 – 169,142 – 97,350,471 1,122,007,703

2073 1,122,007,703 – 145,868 – 106,583,803 1,228,445,638

2074 1,228,445,638 – 124,932 – 116,696,401 1,345,017,107

2075 1,345,017,107 – 106,308 – 127,771,576 1,472,682,375

2076 1,472,682,375 – 89,944 – 139,900,553 1,612,492,984

2077 1,612,492,984 – 75,560 – 153,183,244 1,765,600,668

2078 1,765,600,668 – 62,923 – 167,729,075 1,933,266,820

2079 1,933,266,820 – 51,931 – 183,657,881 2,116,872,770

2080 2,116,872,770 – 42,399 – 201,100,899 2,317,931,270

2081 2,317,931,270 – 34,198 – 220,201,846 2,538,098,918

2082 2,538,098,918 – 27,224 – 241,118,104 2,779,189,798

2083 2,779,189,798 – 21,364 – 264,022,016 3,043,190,450

2084 3,043,190,450 – 16,572 – 289,102,306 3,332,276,184

2085 3,332,276,184 – 12,694 – 316,565,635 3,648,829,125

2086 3,648,829,125 – 9,601 – 346,638,311 3,995,457,835

2087 3,995,457,835 – 7,177 – 379,568,153 4,375,018,811

2088 4,375,018,811 – 5,314 – 415,626,535 4,790,640,032

2089 4,790,640,032 – 3,900 – 455,110,618 5,245,746,750

2090 5,245,746,750 – 2,841 – 498,345,806 5,744,089,715

2091 5,744,089,715 – 2,059 – 545,688,425 6,289,776,081

2092 6,289,776,081 – 1,481 – 597,528,657 6,887,303,257

2093 6,887,303,257 – 1,063 – 654,293,759 7,541,595,953

2094 7,541,595,953 – 759 – 716,451,579 8,258,046,773

2095 8,258,046,773 – 539 – 784,514,418 9,042,560,652

2096 9,042,560,652 – 381 – 859,043,244 9,901,603,515

2097 9,901,603,515 – 268 – 940,652,321 10,842,255,568

2098 10,842,255,568 – 186 – 1,030,014,270 11,872,269,652

2099 11,872,269,652 – 128 – 1,127,865,611 13,000,135,135

2100 13,000,135,135 – 86 – 1,235,012,834 14,235,147,883

2101 14,235,147,883 – 57 – 1,352,339,046 15,587,486,872

2102 15,587,486,872 – 37 – 1,480,811,251 17,068,298,086

2103 17,068,298,086 – 24 – 1,621,488,317 18,689,786,379

2104 18,689,786,379 – 15 – 1,775,529,705 20,465,316,069

2105 20,465,316,069 – 9 – 1,944,205,026 22,409,521,086

2106 22,409,521,086 – 6 – 2,128,904,503 24,538,425,583

2107 24,538,425,583 – 3 – 2,331,150,430 26,869,576,010

2108 26,869,576,010 – 2 – 2,552,609,721 29,422,185,729

2109 29,422,185,729 – 1 – 2,795,107,644 32,217,293,372

2110 32,217,293,372 – 1 – 3,060,642,870 35,277,936,241

2111 35,277,936,241 – – – 3,351,403,943 38,629,340,184

*All DROP and Share Balances paid in 2016.

Number of Years Expected Benefit Payments Sustained: 999.99

This projection assumes no further contributions, assumes no further benefit accruals, and assumes Market Value of Assets earn 9.50% interest.

It is important to note that as long as the Actuarially Determined Contribution is made each year, the Plan will never become insolvent.

Furthermore, State and local laws mandate that the Actuarially Determined Contribution be made each year.

SECTION II – ASSET SUSTAINABILITY Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 9

______________________________________________________________________________________________________________________________________________________

ACTUAL

7.50% 5.50% 9.50%

RP-2000 RP-2000 RP-2000

Generational Generational Generational

Total Required Contribution (Fixed $) $980,843 $1,845,285 $633,568

Total Required Contribution (% of Payroll) 27.5% 51.8% 17.8%

Expected Member Contribution 203,330 201,370 205,289

Expected State Money 283,861 283,861 283,861

Expected Sponsor Contribution (Fixed $) $493,652 $1,360,054 $144,418

Expected Sponsor Contribution (% of Payroll) 13.9% 38.2% 4.1%

ASSETS

Actuarial Value ¹ 26,458,831 26,458,831 26,458,831

Market Value ¹ 25,285,901 25,285,901 25,285,901

LIABILITIES

Present Value of Benefits

Active Members

Retirement Benefits 17,750,822 25,783,151 12,797,631

Disability Benefits 989,643 1,321,368 766,501

Death Benefits 580,928 820,450 432,946

Vested Benefits 170,206 257,033 118,256

Refund of Contributions 24,201 25,015 23,450

Service Retirees 8,237,211 9,828,892 7,065,093

DROP Retirees ¹ 1,865,257 2,268,363 1,582,713

Beneficiaries 1,540,577 1,870,873 1,304,662

Disability Retirees 1,298,081 1,515,913 1,136,165

Terminated Vested 0 0 0

Excess State Monies Reserve 32,072 32,072 32,072

Accumulated Share Balances ¹ 107,450 107,450 107,450

Total: 32,596,448 43,830,580 25,366,939

Present Value of Future Salaries 26,442,208 29,226,341 24,130,698

Present Value of Future

Member Contributions 1,454,321 1,607,449 1,327,188

Total Normal Cost 844,742 1,283,974 573,959

Present Value of Future

Normal Costs (Entry Age Normal) 6,443,283 10,883,727 3,976,866

Total Actuarial Accrued Liability ¹ 26,153,165 32,946,853 21,390,073

Unfunded Actuarial Accrued (305,666) 6,488,022 (5,068,758)

Liability (UAAL)

HYPOTHETICAL

ACTUAL AND HYPOTHETICAL CONTRIBUTIONS APPLICABLE TO THE FISCAL YEAR

ENDING SEPTEMBER 30, 2018

Valuation Date: 10/1/2016

SECTION III – FUNDING Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 10

______________________________________________________________________________________________________________________________________________________

ACTUAL

7.50% 5.50% 9.50%

RP-2000 RP-2000 RP-2000

Generational Generational Generational

HYPOTHETICAL

ACTUAL AND HYPOTHETICAL CONTRIBUTIONS APPLICABLE TO THE FISCAL YEAR

ENDING SEPTEMBER 30, 2018

Valuation Date: 10/1/2016

PENSION COST

Normal Cost ² 923,571 1,390,261 633,568

Administrative Expenses ² 79,670 78,902 80,438

Payment Required To Amortize UAAL ² (22,398) 376,122 (444,677)

Total Required Contribution $980,843 $1,845,285 $633,568 ³

¹ The asset values and liabilities for DROP Members include accumulated DROP Balances as of 9/30/2016.

² Contributions developed as of 10/1/2016 displayed above have been adjusted to account for assumed salary increase and interest components.

³ Per Florida Statutes, the Minimum Required Contribution may be no less than the Normal Cost.

SECTION III – FUNDING Section 112.664, F.S. Requirements

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 11

  • Section I – GASB – SB534 – 2016 – 1.1 – Dunedin Fire
  • Section II – Asset Sustainability – 2016 – 1.2 – Dunedin Fire
  • Section III – Funding – 2016 – Dunedin Fire

Dunedin Employee group(s) covered

City/District Name: Dunedin Employee group(s) covered: Fire

Current actuarial valuation date: 10/1/2016

Market Value of Plan Assets (MVA): $25,285,901

Unfunded Accrued Liability (UAL): ($305,666)

Number of plan participants: 95

7.85%

Assumed 7.50%

Funding requirement as percentage of payroll: 26.34%

Percentage of payroll contributed by employee: 5.50%

Benefit Formula Description: 3% AFC X (0-25)SC + 2% AFC X (37.5+)SC

MVA Funded Ratio (5-year history):

Rate of

Return:

7.61%

7.47%

59.23%

6.15%

Employees covered by Social Security? Yes

*Adjusted by excluding plans from average whose Funded Ratios were not within two standard deviations from the mean

Actuarial Value of Plan Assets (AVA): $26,458,831

AFC Averaging Period (years): 3

2/13/2018Date prepared:

Actuarial Accrued Liability (AAL): $26,153,165

Actuarial Value, Actual (2016 Plan Year)

Averages for all plans with 2016

current actuarial valuation date

96.68%

99.43%

105.11%

102.97%

95.53%

81.88% *

83.59% *

86.95% *

81.49% *

76.00% *

Market Value, Actual 7.12% 3.99%

**

**

**Excludes plans with zero payroll

Current valuation

1 year prior

2 years prior

3 years prior

4 years prior

Florida

Statute

Chapter Discount

Rate

Pension

Liability

Market

Value of

Plan

Assets

Net

Pension

Liability

Years

assets

sustain

benefit

payments

Total

Dollar

Contribution

Total

% of Pay

Contribution

26,006,553 25,285,901 720,652 999.99 980,843 27.50

32,688,990 25,285,901 7,403,089 25.23 1,845,285 51.80

999.99 980,843 27.50

112.664(1)(a)

112.664(1)(b)

7.50%

Valuation Basis

5.50%

7.50%

Additional actuarial disclosures required by section 112.664, Florida Statutes:

N/A N/A N/A

Link to annual financial statements:

(For explanation of terms, see glossary on page 2)

26,006,553

25,285,901

720,652

GASB 67 Reporting

7.50%

https://www.rol.frs.state.fl.us/forms/LOC5340203PDF10012016N1.pdf

Discount Rate

Total Pension Liability

Net Pension Liability

Market Value of Plan Assets

GASB 67 Funded Ratio 97.23%

Market Value of Plan Assets (MVA): The fair market value of assets, including DROP accounts.

Unfunded Accrued Liability (UAL): The difference between the actuarial accrued liability and the actuarial value of assets accumulated to finance the obligation.

MVA Funded Ratio: Market Value of Plan Assets divided by Actuarial Accrued Liability (GASB)

Rate of Return (Assumed): Assumed long-term rate of return on the pension fund assets.

Funding requirement as

percentage of payroll:

Total Required Contribution (employer and employee) divided by total payroll of active participants

AFC: Average Final Compensation or some variant of compensation (e.g., AME [Average Monthly Earnings], FAC [Final Average Compensation], FMC [Final Monthly Compensation] etc.)

Actuarial Value of Plan Assets (AVA):Assets calculated under an asset valuation method smoothing the effects of volatility in market value of assets. Used to determine employer contribution.

Actuarial Accrued Liability (AAL): Portion of Present Value of Fully Projected Benefits attributable to service credit earned as of the current actuarial valuation date.

SC: Service Credit

Years assets sustain benefit

payments:

Assuming no future contributions from any source, the number of years the market value of assets will sustain payment of expected retirement benefits. The number of years will vary based on the Florida Statute Chapter assumption.

Florida Statute Chapter: 112.664(1)(a) – uses mortality tables used in either of the two most recently published FRS valuation reports, with projection scale for mortality improvement

112.664(1)(b) – uses same mortality assumption as 112.664(1)(a) but using an assumed discount rate equal to 200 basis points (2.00%) less than plan’s assumed rate of return.

Valuation Basis – uses all the assumptions in the plan’s valuation as of the current actuarial valuation date.

Discount Rate: Rate used to discount the liabilities. Typically the same as assumed rate of return on assets.

Total Pension Liability: Actuarial Accrued Liability measured using the appropriate assumptions as specified above and the Traditional Individual Entry Age Normal Cost

Total Dollar Contribution: Required contribution from all sources (i.e., employee and sponsor). Contribution will vary based on the Florida Statute Chapter assumption.

Total % of Pay Contribution: Total Dollar Contribution divided by total payroll of active participants

Net Pension Liability: Total Pension Liability minus Market Value of Plan Assets.

Section 112.664 – Glossary of Terms

Actuarial Summary Fact Sheet – Glossary of Terms

Annual financial statements: A report issued which covers a local government retirement system or plan to satisfy the financial reporting requirements of section 112.664(1), F.S.

Firefighter Retirement System

Case Study Analysis Guidelines

The issue is: Firefighter Retirement SystemAmendment:The case got unanimously approved in the city commissioner meeting

How Should the Case Study Analysis Paper Be Set Up?

Use only APA format, and include citations when completing your individual paper. Refer to APA Formatting and Style Guide.

· Title Page

· Page numbers are required.

· One or two paragraphs to bring the reader into your story

· The following headers must be included within your paper: Issue, Stakeholders, Stakeholder Perspectives, Expert Interview, Recommendation(s)

· “Issue” in one or two sentences at the most, separated from any paragraphs. Bold your issue so the reader can see at a glance what your case study is.

· Include the history of your case study and any related laws

· Then, do your next steps that include “stakeholders and perspectives.” The most common form used by students that sets up nicely is a chart:

StakeholdersPerspectives
MayorThe mayor would want…………and supports this……….………

· Paragraph on your “expert” face-to-face interview(s)

· Include face-to-face interview date, time, and location. We reserved the option to follow-up with your expert interviewee to verify your attendance. If we find you did not attend, you will receive a zero for the paper.

· Close with a strong recommendation based on your critical thinking, expert interviews, personal life experience, etc. (Do not call this a solution, etc.)

· Discuss your city/county council presentation experience

· Reference Page

· Your Case Study Analysis Paper should be 6 to 10 pages in length in APA format.

Case Study Analysis Guidelines

The case study method is a form of stimulation aimed at providing students with an understanding of the complexities relating to specific circumstances faced on the job. A case study should contain a complete description of an issue including all known events, people, and other impacting factors. It represents a situation/concern to be analyzed and resolved. Case studies should allow students to:

· Ask (or ask themselves) questions that help extract key information from a case

· Diagnose the case

· Define all the different issues involved in the case

· Make well thought out, fact-based decisions

· Formulate principles for handling future cases

In the field of public administration, the case study method is “an action plan” for resolving community issues. It provides clarity of purpose for what needs to be accomplished to effectively connect citizens to governance.

“Few public administrators expect ever to find a ‘one size fits all’ issue resolving approach for the vast range of circumstances/concerns that they are likely to encounter” (Public Administration – The Profession and the Practice).

Principles for Creating a Case Study Analysis

Each case should focus on a single issue/situation clearly delineated in one or two sentences, at most, and separated from paragraphs so as to easily determine what it is we are about to address.

A case study analysis must contain all the data necessary to arrive at a recommendation for resolution:

· Facts and events of the case

· Feelings, habits, attitudes, and expectations of the key stakeholders

· A clear description of the setting (time, place, and physical and social environment)

Steps in Creating a Case Study

1. Identify the Issue

· Must illustrate one or several specific principles.

· Will constitute the heart of the case study and thus influence all parts including how it is represented.

· Case studies are stories; they teach what stories teach – which happens to be what administrators most need to learn.

· Create an Outline of the Case Study

· Select facts and incidents that will be easily recognized and understood by participants.

· Organize these in a logical sequence. Remove any inflated or exaggerated components that might diminish the authenticity of the case.

2. Identify the Stakeholders

· Clearly identify each stakeholder in terms of his/her position.

· Write up the case study.

· Whether the case study is short or long, present a clear, concise, and coherent portrait of the stakeholders, events, and information.

· Use a writing style that is simple and direct – no long winded dissertations – one that speaks right to the reader.

· Occasionally include brief dialogues to create interest and allow readers to hear what the stakeholders in the case study have to say for themselves.

· In the case introduction, present your key stakeholders and provide information that clearly identifies him/her/them. Establish the relationship between the stakeholders and the issue under study. Include the organizational context.

· Recount events or incidents in chronological order.

· Occasionally use “flashbacks” to fill in gaps or heighten the sense of realism in the case. In certain case studies, you may have events overlap, occur simultaneously, or repeat themselves.

· In the concluding sentence or paragraph of the case study, point out the need for some form of action: a decision, a recommendation for resolution, a weighing of alternatives, or a combination of these.

· End with a bridge of some sort that leads from your case study presentation to participant discussion. Three types of conclusion are frequently used: 1) open-ended conclusion: the participants define the facts and problems, 2) directed conclusions: specific questions, tasks, or even a quiz following a case study, 3) closed conclusions: a textbook solution is provided at the end of the case study.

3. Identify Stakeholder Perspectives

· Understand that public administration is politics – not the “obvious politics” of high stakes electioneering and policy making, but the “other politics” of small-scale, behind the scenes problems solving: the nature of administrative casework follows accordingly.

· Stories don’t come ready-made but must be formed through selection and shaping from the flow of events: “Case synthesis precedes case analysis.”

· Keep your eye on the entire set of interacting decision-makers and interlocking policies: it’s there you are most likely to find any lurking problems of under-determination.

· It’s usually helpful to break out the goals being pursued, the variables that must be modified to move toward the goals, and the criteria to be borne in mind when pursuing the goals; it’s in those criteria that problems of over-determination are likely to originate.

· Remember Mile’s Law: “Where one stands depends on where one sits.”

· Search for the paradigm of the case, but expect departures from the underlying pattern; explore the progression of circumstances.

4. Make a Recommendation

· Cases involve choices; in a democracy, choice demands justification, which further implies a process of dialogue and an effort at persuasion.

· An effective administrative analyst must be ready to “speak in tongues;” expect to work in a variety of idioms and vocabularies.

· Most important of all: Trust your own experience and instincts!

Board of Trustees Dunedin Firefighters’ Retirement System

13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · Fax (239) 481-0634 · www.foster-foster.com

February 8, 2018

Board of Trustees Dunedin Firefighters’ Retirement System 1042 Virginia Street Dunedin, FL 34698

RE: GASB Statement No.67 and No.68 – City of Dunedin Firefighters’ Retirement System

Dear Board:

We are pleased to present to the Board GASB Statement No.67 and No.68 measured as of September 30, 2017 for the City of Dunedin Firefighters’ Retirement System.

The calculation of the liability associated with the benefits referenced in this report was performed for satisfying the requirements of GASB No.67 and No.68 and is not applicable for other purposes, such as determining the plan’s funding requirements. A calculation of the plan’s liability for other purposes may produce significantly different results.

The total pension liability, net pension liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of October 1, 2016. The total pension liability was rolled-forward from the valuation date to the plan’s fiscal year ending September 30th, 2017 using generally accepted actuarial principles. It is our opinion that the assumptions used for this purposes are internally consistent, reasonable, and comply with the requirements under GASB No.67 and No.68.

Certain schedules should include a 10-year history of information. As provided for in GASB No.67 and No.68, this historical information is only presented for the years in which the information was measured in conformity with the requirements of GASB No.67 and No.68.

To the best of our knowledge, these statements are complete and accurate and are in accordance with generally recognized actuarial practices and methods.

If there are any questions, concerns, or comments about any of the items contained in this report, please contact me at 239-433-5500.

Respectfully submitted,

Foster & Foster, Inc.

By:

Patrick T. Donlan, ASA, MAAA Enrolled Actuary #17-6595

PTD/lke Enclosureshttp://www.foster-foster.com/

GASB 67 STATEMENT OF FIDUCIARY NET POSITION

SEPTEMBER 30, 2017

ASSETS Cash and Cash Equivalents: Prepaid Expenses Money Market

Total Cash and Equivalents

Receivables: Member Contributions in Transit Additional City Contributions State Contributions Investment Income

Total Receivable

Investments: Fixed Income Equities Mutual Funds: Real Estate

Total Investments

Total Assets

LIABILITIES Payables: Investment Expenses

Total Liabilities

NET POSITION RESTRICTED FOR PENSIONS

MARKET VALUE

1,148 355,611

356,759

6,353 57,462

298,121 43,944

405,880

5,793,492 17,506,054

2,866,772

26,166,318

26,928,957

28,873

28,873

26,900,084

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 2

GASB 67

ADDITIONS Contributions: Member 180,673 Buy-Back 1,118 City 446,583 State 298,122

Total Contributions 926,496

Investment Income: Net Increase in Fair Value of Investments 1,476,760 Interest & Dividends 553,734 Less Investment Expense¹ (141,816)

Net Investment Income 1,888,678

Total Additions 2,815,174

DEDUCTIONS Distributions to Members: Benefit Payments 1,114,815 Lump Sum DROP Distributions 5,210 Lump Sum Share Distributions 4,428 Refunds of Member Contributions 13,942

Total Distributions 1,138,395

Administrative Expense 62,596

Total Deductions 1,200,991

Net Increase in Net Position 1,614,183

NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 25,285,901

End of the Year 26,900,084

¹Investment related expenses include investment advisory, custodial and performance monitoring fees.

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017

Market Value Basis

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 3

GASB 67

Plan Description

Plan Administration

Plan Membership as of October 1, 2016:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits 46 Inactive Plan Members Entitled to But Not Yet Receiving Benefits – Active Plan Members 49

95

Benefits Provided

Normal Retirement:

Early Retirement:

Delayed Retirement:

Service Connected Disability

NOTES TO THE FINANCIAL STATEMENTS

Eligibility: Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter as a result from an act occurring in the performance of service for the City is immediately eligible for a disability benefit. Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 60% of average salary over the 5 highest years of Credited Service.

(For the Year Ended September 30, 2017)

The Plan provides retirement, termination, disability and death benefits.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Benefit: 3% of AFC multiplied by Credited Service up to 25 years plus 2% of AFC multiplied by Credited Service in excess of 37.5 years. Total benefit is limited to 100% of AFC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

Date: A Member may retire on the first day of the month coincident with or next following age 45 and 10 years of Credited Service. Benefit: The Normal Retirement Benefit is actuarially reduced by 3.00% for each year to age 50 and 3.33% for each year from age 50 to age 45 by which the commencement of benefits precedes the member’s Normal Retirement date had the Member continued employment as a firefighter. For this purpose, the Normal Retirement date upon completion of 20 years of Credited Service is disregarded.

Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. Vested Termination: Eligibility: A Member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service. Benefit: The benefit is the Member’s accrued Normal Retirement Benefit as of the date of termination. The benefit is payable at the Member’s Normal Retirement age determined as if the Member continued employment as a firefighter. Alternatively, Members can elect a reduced Early Retirement Benefit anytime after age 45. Members with less than 10 years of Credited Service will receive a refund of their own accumulated contributions.

The Plan is a single-employer defined benefit pension plan administered by the Plan’s Board of Trustees comprised of: Two Council appointees, two Members of the Plan elected by the membership, and a fifth Member elected by other four and appointed by Council as a ministerial duty.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 4

GASB 67

Non-Service Connected Disability

Contributions Member Contributions: 5.5% of Compensation.

Eligibility: Any member who has 10 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter is immediately eligible for a disability benefit. Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 30% of average salary over the 5 highest years of Credited Service. Death Benefits in the Line of Duty: Eligibility: Any Member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service. Benefit: 50% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 15% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student); 50% total maximum for all such children. Other Pre-Retirement Death Benefits: Eligibility: Any Member who dies, and whose death is not attributable to active duty or service, while employed as a firefighter by the City is eligible for survivor benefits regardless of Credited Service.

Share Plan: 75% of the Excess State Monies received each fiscal year (amounts above $283,050.40) are allocated equally among Eligible Members.

Benefit: 25% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 7.5% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student).

Employer Contributions: Chapter 175 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 5

GASB 67

Investments Investment Policy: The following was the Board’s adopted asset allocation policy as of September 30, 2017:

Asset Class Target Allocation Domestic Equity 52.50% International Equity 12.50% Domestic Fixed Income 25.00% Real Estate 10.00% Total 100.00%

Concentrations:

Rate of Return:

Deferred Retirement Option Program

The DROP balance as September 30, 2017 is $282,008.

The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan’s Fiduciary Net Position.

The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

For the year ended September 30, 2017, the annual money-weighted rate of return on Pension Plan investments, net of Pension Plan investment expense, was 7.55 percent.

Maximum Interest Credited: The Member’s average daily balance of the DROP account is debited or credited with interest on a quarterly basis at a rate equal to the Trust Fund’s net investment return for the quarter.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Members who meet eligibility must submit a written election to participate in the DROP.

Maximum DROP Period: The earlier of 5 years of participation in the DROP or when the Member has completed 30 years of Credited Service.

Benefit: The member’s Credited Service and FAC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and FAC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire. DROP participants do not receive the supplement until actual termination of employment.

City of Dunedin Firefighters’ Retirement System FOSTER & FOSTER | 6

GASB 67

The components of the Net Pension Liability of the Sponsor on September 30, 2017 were as follows:

Total Pension Liability 27,617,626$ Plan Fiduciary Net Position (26,900,084)$ Sponsor’s Net Pension Liability 717,542$ Plan Fiduciary Net Position as a percentage of Total Pension Liability 97.40%

Actuarial Assumptions:

Inflation 2.50% Salary Increases Service based Discount Rate 7.50% Investment Rate of Return 7.50%

Mortality Rate Healthy Lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB. Mortality Rate 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.

The most recent actuarial experience study used to review the other significant assumptions was dated October 3, 2016.

Domestic Equity 7.50% International Equity 8.50% Domestic Fixed Income 2.50% Real Estate 4.50%

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2016 updated to September 30, 2017 using the following actuarial assumptions:

NET PENSION LIABILITY OF THE SPONSOR

The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.

These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan’s target asset allocation as of September 30, 2017 are summarized in the following table:

Long Term Expected Real Rate of ReturnAsset Class

For 2017 the inflation rate assumption of the investment advisor was 2.50%.

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Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.50 percent.

1% Decrease Current

Discount Rate 1% Increase 6.50% 7.50% 8.50%

Sponsor’s Net Pension Liability 3,904,479$ 717,542$ (1,955,528)$

The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.

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09/30/2017 09/30/2016 09/30/2015 Total Pension Liability Service Cost 856,749 818,555 795,653 Interest 1,969,652 1,946,348 1,800,848 Change in Excess State Money – – 5,213 Share Plan Allocation 11,304 2,432 15,635 Changes of benefit terms – 495,699 – Differences between Expected and Actual Experience (89,355) (836,436) (214,235) Changes of assumptions – 201,521 – Contributions – Buy Back 1,118 73,537 32,877 Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Net Change in Total Pension Liability 1,611,073 1,649,107 1,344,606 Total Pension Liability – Beginning 26,006,553 24,357,446 23,012,840 Total Pension Liability – Ending (a) 27,617,626$ 26,006,553$ 24,357,446$

Plan Fiduciary Net Position Contributions – Employer 446,583 442,686 501,383 Contributions – State 298,122 286,293 303,898 Contributions – Employee 180,673 186,769 178,122 Contributions – Buy Back 1,118 73,537 32,877 Net Investment Income 1,888,678 1,676,263 (353,976) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Administrative Expense (62,596) (69,374) (76,367) Net Change in Plan Fiduciary Net Position 1,614,183 1,543,625 (505,448) Plan Fiduciary Net Position – Beginning 25,285,901 23,742,276 24,247,724 Plan Fiduciary Net Position – Ending (b) $ 26,900,084 $ 25,285,901 $ 23,742,276

Net Pension Liability – Ending (a) – (b) 717,542$ 720,652$ 615,170$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 97.40% 97.23% 97.47%

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ Net Pension Liability as a percentage of Covered Employee Payroll 21.84% 21.22% 18.71%

Notes to Schedule:

Changes of benefit terms:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

For measurement date 09/30/2016, Ordinance 16-22 was adopted. The change was an increase in the Supplemental benefit from $3 to $13 per month per year of service up to a maximum of $325 for Members who retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

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Changes of assumptions:

For measurement date 09/30/2015, the inflation assumption was lowered from 3.50% to 3.00%

In addition, the inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan’s investment consultant.

• The assumed rates of individual salary increase were reduced as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The assumed rates of retirement were reduced at each age, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

For measurement date 09/30/2016, as a result of an October 3, 2016 Experience Study and as a result of recent State legislation, the Board has made the following assumption changes: • The assumed rates of mortality were changed to match those used by the FRS for special risk employees in their July 1, 2015 valuation report. • The expected withdrawal rates were reduced, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The investment return assumption was reduced from 7.75% to 7.50% per year, net of investment related expenses.

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09/30/2014 09/30/2013 Total Pension Liability Service Cost 793,320 736,260 Interest 1,685,549 1,586,064 Change in Excess State Money 9,746 – Share Plan Allocation 29,234 – Changes of benefit terms – – Differences between Expected and Actual Experience – – Changes of assumptions – – Contributions – Buy Back 64,645 – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) Net Change in Total Pension Liability 1,499,188 1,214,216 – Total Pension Liability – Beginning 21,513,652 20,299,436 Total Pension Liability – Ending (a) 23,012,840$ 21,513,652$ -$

Plan Fiduciary Net Position Contributions – Employer 510,314 549,848 Contributions – State 322,030 314,996 Contributions – Employee 176,623 172,605 Contributions – Buy Back 64,645 – Net Investment Income 1,904,122 2,667,160 Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) Administrative Expense (44,389) (48,564) Net Change in Plan Fiduciary Net Position 1,850,039 2,547,937 Plan Fiduciary Net Position – Beginning 22,397,685 19,849,748 Plan Fiduciary Net Position – Ending (b) $ 24,247,724 $ 22,397,685

Net Pension Liability – Ending (a) – (b) (1,234,884)$ (884,033)$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 105.37% 104.11%

Covered Employee Payroll¹ 3,211,327$ 3,138,275$ Net Pension Liability as a percentage of Covered Employee Payroll -38.45% -28.17%

Notes to Schedule:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

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09/30/2017 09/30/2016 09/30/2015 09/30/2014 09/30/2013 Actuarially Determined Contribution 733,401 725,736 784,433 793,364 832,898 Contributions in relation to the Actuarially Determined Contributions 733,401 725,736 784,433 793,364 832,898 Contribution Deficiency (Excess) -$ -$ -$ -$ -$

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ 3,211,327$ 3,138,275$ Contributions as a percentage of Covered Employee Payroll 22.33% 21.37% 23.85% 24.71% 26.54%

Notes to Schedule

Valuation Date: 10/01/2015 (AIS 05/03/2016)

Methods and assumptions used to determine contribution rates:

Funding Method: Amortization Method: Remaining Amortization Period: Mortality Rates:

Termination Rates: Service Probability 0 15.0% 1 15.0% 2 7.0% 3 7.0% 4 5.0% 5 5.0% 6 4.0% 7 4.0% 8 2.0% 9 2.0%

10+ 0.5%

Disability Rates:

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

The assumed rates of termination were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations.

Entry Age Normal Cost Method. Level Percentage of Pay, Closed. 30 Years.

SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years

Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.

RP2000 Generational Mortality Table – Sex Distinct. Disabled lives set forward 5 years. This assumption sufficiently accommodates for expected future mortality

See sample rates on following page. 75% of disabilities are assumed to be service- incurred. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters.

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Retirement Rates:

Interest Rate:

Salary Increases: Years of 0 1 2 3 4 5 6 7 8 9

10 11 12 13

14+

Payroll Growth:

Funding Projection:

Actuarial Asset Method:

Disability Rates: Age 20 25 30 35 40 45 50

5+

Number of Years After First Eligibility For Normal

Retirement Probability of Normal

Retirement

0.15% 0.18%

35%0

The required dollar contributions for the following year include a half-year of interest and a full year of salary increase based on the expected average salary increase for the upcoming year.

The assumed rates of salary increase were approved in conjunction with a special actuarial analysis dated March 16, 2012.

1 2 3 4

20% 20% 20% 20%

100%

8.0%

0.51% 1.00%

% Increase in Salary

0.23% 0.30%

% Becoming Disabled During the Year 0.14%

5.5%

14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.5%

4.0%

All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period.

Additionally, the assumed rate of retirement is 5.00% for each year of eligibility for early retirement. The assumed rates of retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. 7.75% per year, compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.

1.77% per year for amortization of the Unfunded Actuarial Accrued Liability. This is in compliance with Part VII of Chapter 112, Florida Statutes.

7.5% 7.0% 6.5% 6.0%

5.0%

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09/30/2017 09/30/2016 09/30/2015 09/30/2014 09/30/2013 Annual Money-Weighted Rate of Return Net of Investment Expense 7.55% 7.12% -1.47% 8.56% 13.40%

SCHEDULE OF INVESTMENT RETURNS Last 10 Fiscal Years

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General Information about the Pension Plan

Plan Description

All actively employed full-time firefighters participate in the Plan as a condition of employment.

Plan Membership as of October 1, 2016:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits 46 Inactive Plan Members Entitled to But Not Yet Receiving Benefits – Active Plan Members 49

95

Benefits Provided

Normal Retirement:

Early Retirement:

Delayed Retirement:

Eligibility: A Member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service.

Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 30% of average salary over the 5 highest years of Credited Service.

Benefit: The Normal Retirement Benefit is actuarially reduced by 3.00% for each year to age 50 and 3.33% for each year from age 50 to age 45 by which the commencement of benefits precedes the member’s Normal Retirement date had the Member continued employment as a firefighter. For this purpose, the Normal Retirement date upon completion of 20 years of Credited Service is disregarded.

Date: A Member may retire on the first day of the month coincident with or next following age 45 and 10 years of Credited Service.

Benefit: The benefit is the Member’s accrued Normal Retirement Benefit as of the date of termination. The benefit is payable at the Member’s Normal Retirement age determined as if the Member continued employment as a firefighter. Alternatively, Members can elect a reduced Early Retirement Benefit anytime after age 45. Members with less than 10 years of Credited Service will receive a refund of their own accumulated contributions. Service Connected Disability

Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement.

NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2018)

Vested Termination:

Eligibility: Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter as a result from an act occurring in the performance of service for the City is immediately eligible for a disability benefit.

Non-Service Connected Disability

Benefit: The greater of: (1) The accrued Normal Retirement Benefit taking into account compensation earned and service credited until the date of disability, or (2) 60% of average salary over the 5 highest years of Credited Service.

Eligibility: Any member who has 10 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service as a firefighter is immediately eligible for a disability benefit.

The Plan provides retirement, termination, disability and death benefits.

Eligibility: A Member may retire on the first day of the month coincident with or next following the earlier of: (1) age 52 and 25 years of Credited Service, or (2) age 55 and 10 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Benefit: 3% of AFC multiplied by Credited Service up to 25 years plus 2% of AFC multiplied by Credited Service in excess of 37.5 years. Total benefit is limited to 100% of AFC. In addition, a supplemental benefit of $13 per year of Credited Service up to a maximum of $325 is payable monthly to members who meet the requirements for Normal Retirement and retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

The Plan is a single-employer defined benefit pension plan administered by the Plan’s Board of Trustees comprised of: Two Council appointees, two Members of the Plan elected by the membership, and a fifth Member elected by other four and appointed by Council as a ministerial duty.

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Net Pension Liability

The measurement date is September 30, 2017. The measurement period for the pension expense was October 1, 2016 to September 30, 2017. The reporting period is October 1, 2017 through September 30, 2018.

The Sponsor’s Net Pension Liability was measured as of September 30, 2017. The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date.

Actuarial Assumptions:

Inflation 2.50% Salary Increases Service based Discount Rate 7.50% Investment Rate of Return 7.50%

Mortality Rate 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.

For 2017 the inflation rate assumption of the investment advisor was 2.50%.

The most recent actuarial experience study used to review the other significant assumptions was dated October 3, 2016.

Death Benefits in the Line of Duty:

The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.

Contributions Member Contributions: 5.5% of Compensation. Employer Contributions: Chapter 175 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws.

Eligibility: Any Member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service. Benefit: 50% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 15% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student); 50% total maximum for all such children. Other Pre-Retirement Death Benefits: Eligibility: Any Member who dies, and whose death is not attributable to active duty or service, while employed as a firefighter by the City is eligible for survivor benefits regardless of Credited Service. Benefit: 25% of base rate of pay in effect on date of death is payable to the spouse. If there is no spouse, or upon death or remarriage of the spouse, 7.5% of the Member’s salary is payable to each unmarried child under age 18 (age 22 if a full-time student).

These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB.

Mortality Rate Healthy Lives:

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2016 updated to September 30, 2017 using the following actuarial assumptions:

Share Plan: 75% of the Excess State Monies received each fiscal year (amounts above $283,050.40) are allocated equally among Eligible Members.

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Asset Class Target Allocation Long Term Expected Real Rate of Return

Domestic Equity 52.50% 7.50% International Equity 12.50% 8.50% Domestic Fixed Income 25.00% 2.50% Real Estate 10.00% 4.50% Total 100.00%

Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.50 percent.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan’s target asset allocation as of September 30, 2017 are summarized in the following table:

The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.

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Total Pension Liability

Plan Fiduciary Net Position

Net Pension Liability

(a) (b) (a)-(b) Reporting Period Ending September 30, 2017 $ 26,006,553 $ 25,285,901 $ 720,652 Changes for a Year:

Service Cost 856,749 – 856,749 Interest 1,969,652 – 1,969,652 Share Plan Allocation 11,304 – 11,304 Differences between Expected and Actual Experience (89,355) – (89,355) Changes of assumptions – – – Changes of benefit terms – – – Contributions – Employer – 446,583 (446,583) Contributions – State – 298,122 (298,122) Contributions – Employee – 180,673 (180,673) Contributions – Buy Back 1,118 1,118 – Net Investment Income – 1,888,678 (1,888,678) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,138,395) – Administrative Expense – (62,596) 62,596

Net Changes 1,611,073 1,614,183 (3,110) Reporting Period Ending September 30, 2018 $ 27,617,626 $ 26,900,084 $ 717,542

Sensitivity of the Net Pension Liability to changes in the Discount Rate.

1% Decrease Current Discount

Rate 1% Increase 6.50% 7.50% 8.50%

Sponsor’s Net Pension Liability 3,904,479$ 717,542$ (1,955,528)$

Pension Plan Fiduciary Net Position. Detailed information about the pension Plan’s Fiduciary Net Position is available in a separately issued Plan financial report.

Increase (Decrease)

CHANGES IN NET PENSION LIABILITY

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For the year ended September 30, 2017, the Sponsor has recognized a Pension Expense of $1,584,028.

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between Expected and Actual Experience – 797,689 Changes of assumptions 161,216 – Net difference between Projected and Actual Earnings on Pension Plan investments 1,395,125 – Employer and State Contributions subsequent to the measurement date 744,705 – Total 2,301,046$ 797,689$

OUTFLOW Year ended September 30: 2018 (210,135)$ 443,106$ 273,277$ 2019 (228,005)$ 442,602$ 273,277$ 2020 (228,005)$ 442,601$ 307,356$ 2021 (228,005)$ 476,680$ (95,258)$ 2022 (185,158)$ 31,219$ -$ Thereafter 281,619$ (441,083)$ -$

Payable to the Pension Plan

On September 30, 2017, the Sponsor reported a payable of $57,462 for the outstanding amount of contributions of the Pension Plan required for the year ended September 30, 2017.

FINAL PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS

FISCAL YEAR SEPTEMBER 30, 2017

On September 30, 2017, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State Contributions subsequent to the measurement date has been recognized as a reduction of the Net Pension Liability in the year ended September 30, 2017. Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows:

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For the year ended September 30, 2018, the Sponsor will recognize a Pension Expense of $1,088,380.

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between Expected and Actual Experience – 659,039 Changes of assumptions 120,912 – Net difference between Projected and Actual Earnings on Pension Plan investments 949,994 – Employer and State Contributions subsequent to the measurement date TBD – Total TBD 659,039$

OUTFLOW INFLOW Year ended September 30: 2019 (228,005)$ 40,304$ 442,601$ 254,900$ 2020 (228,005)$ 40,304$ 476,680$ 288,979$ 2021 (185,158)$ 40,304$ 31,219$ (113,635)$ 2022 (17,871)$ -$ (506)$ (18,377)$ 2023 -$ -$ -$ -$ Thereafter -$ -$ -$ -$

Payable to the Pension Plan

PRELIMINARY PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS

On September 30, 2017, the Sponsor reported a payable of $57,462 for the outstanding amount of contributions of the Pension Plan required for the year ended September 30, 2017.

On September 30, 2018, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows:

The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State Contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended September 30, 2018.

FISCAL YEAR SEPTEMBER 30, 2018

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Reporting Period Ending 09/30/2018 09/30/2017 09/30/2016 Measurement Date 09/30/2017 09/30/2016 09/30/2015 Total Pension Liability Service Cost 856,749 818,555 795,653 Interest 1,969,652 1,946,348 1,800,848 Change in Excess State Money – – 5,213 Share Plan Allocation 11,304 2,432 15,635 Changes of benefit terms – 495,699 – Differences between Expected and Actual Experience (89,355) (836,436) (214,235) Changes of assumptions – 201,521 – Contributions – Buy Back 1,118 73,537 32,877 Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Net Change in Total Pension Liability 1,611,073 1,649,107 1,344,606 Total Pension Liability – Beginning 26,006,553 24,357,446 23,012,840 Total Pension Liability – Ending (a) $ 27,617,626 $ 26,006,553 $ 24,357,446

Plan Fiduciary Net Position Contributions – Employer 446,583 442,686 501,383 Contributions – State 298,122 286,293 303,898 Contributions – Employee 180,673 186,769 178,122 Contributions – Buy Back 1,118 73,537 32,877 Net Investment Income 1,888,678 1,676,263 (353,976) Benefit Payments, including Refunds of Employee Contributions (1,138,395) (1,052,549) (1,091,385) Administrative Expense (62,596) (69,374) (76,367) Net Change in Plan Fiduciary Net Position 1,614,183 1,543,625 (505,448) Plan Fiduciary Net Position – Beginning 25,285,901 23,742,276 24,247,724 Plan Fiduciary Net Position – Ending (b) $ 26,900,084 $ 25,285,901 $ 23,742,276

Net Pension Liability – Ending (a) – (b) 717,542$ 720,652$ 615,170$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 97.40% 97.23% 97.47%

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ Net Pension Liability as a percentage of Covered Employee Payroll 21.84% 21.22% 18.71%

Notes to Schedule:

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Changes of benefit terms: For measurement date 09/30/2016, Ordinance 16-22 was adopted. The change was an increase in the Supplemental benefit from $3 to $13 per month per year of service up to a maximum of $325 for Members who retire on or after October 1, 2016 or enter the DROP on or after October 1, 2014.

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For measurement date 09/30/2015, the inflation assumption was lowered from 3.50% to 3.00%

• The investment return assumption was reduced from 7.75% to 7.50% per year, net of investment related expenses. • The assumed rates of individual salary increase were reduced as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report. • The assumed rates of retirement were reduced at each age, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

Changes of assumptions: For measurement date 09/30/2016, as a result of an October 3, 2016 Experience Study and as a result of recent State legislation, the Board has made the following assumption changes: • The assumed rates of mortality were changed to match those used by the FRS for special risk employees in their July 1, 2015 valuation report. • The expected withdrawal rates were reduced, as shown in the Actuarial Assumptions and Methods section of the 10/01/2016 Valuation report.

In addition, the inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan’s investment consultant.

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Reporting Period Ending 09/30/2015 09/30/2014 Measurement Date 09/30/2014 09/30/2013 Total Pension Liability Service Cost 793,320 736,260 – Interest 1,685,549 1,586,064 – Change in Excess State Money 9,746 – – Share Plan Allocation 29,234 – – Changes of benefit terms – – – Differences between Expected and Actual Experience – – – Changes of assumptions – – – Contributions – Buy Back 64,645 – – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) – Net Change in Total Pension Liability 1,499,188 1,214,216 – Total Pension Liability – Beginning 21,513,652 20,299,436 – Total Pension Liability – Ending (a) $ 23,012,840 $ 21,513,652 $ –

Plan Fiduciary Net Position Contributions – Employer 510,314 549,848 – Contributions – State 322,030 314,996 – Contributions – Employee 176,623 172,605 – Contributions – Buy Back 64,645 – – Net Investment Income 1,904,122 2,667,160 – Benefit Payments, including Refunds of Employee Contributions (1,083,306) (1,108,108) – Administrative Expense (44,389) (48,564) – Net Change in Plan Fiduciary Net Position 1,850,039 2,547,937 – Plan Fiduciary Net Position – Beginning 22,397,685 19,849,748 – Plan Fiduciary Net Position – Ending (b) $ 24,247,724 $ 22,397,685 $ –

Net Pension Liability – Ending (a) – (b) (1,234,884)$ (884,033)$ -$

Plan Fiduciary Net Position as a percentage of the Total Pension Liability 105.37% 104.11% #DIV/0!

Covered Employee Payroll¹ 3,211,327$ 3,138,275$ -$ Net Pension Liability as a percentage of Covered Employee Payroll -38.45% -28.17% #DIV/0!

Notes to Schedule:

SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

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GASB 68

09/30/2017 09/30/2016 09/30/2015 09/30/2013 09/30/2013 Actuarially Determined Contribution 733,401 725,736 784,433 832,898 832,898 Contributions in relation to the Actuarially Determined Contributions 733,401 725,736 784,433 832,898 832,898 Contribution Deficiency (Excess) $ – $ – $ – $ – $ –

Covered Employee Payroll¹ 3,284,952$ 3,395,812$ 3,288,615$ 3,138,275$ 3,138,275$ Contributions as a percentage of Covered Employee Payroll 22.33% 21.37% 23.85% 26.54% 26.54%

Notes to Schedule

Valuation Date: 10/01/2015 (AIS 05/03/2016)

Methods and assumptions used to determine contribution rates:

Funding Method: Amortization Method: Remaining Amortization Period: Mortality Rates:

Termination Rates: Service Probability 0 15.0% 1 15.0% 2 7.0% 3 7.0% 4 5.0% 5 5.0% 6 4.0% 7 4.0% 8 2.0% 9 2.0%

10+ 0.5%

Disability Rates: See sample rates on following page. 75% of disabilities are assumed to be service- incurred. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters.

SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years

¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.

The assumed rates of termination were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations.

RP2000 Generational Mortality Table – Sex Distinct. Disabled lives set forward 5 years. This assumption sufficiently accommodates for expected future mortality improvements.

30 Years.

Entry Age Normal Cost Method. Level Percentage of Pay, Closed.

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GASB 68

Retirement Rates:

Interest Rate:

Salary Increases: Years of Service

% Increase in Salary

0 14.0% 1 13.0% 2 12.0% 3 11.0% 4 10.0% 5 9.0% 6 8.5% 7 8.0% 8 7.5% 9 7.0%

10 6.5% 11 6.0% 12 5.5% 13 5.0%

14+ 4.0%

Payroll Growth:

Funding Projection:

Actuarial Asset Method:

Disability Rates: Age 20 25 30 35 40 45 50

5+ 100%

1.77% per year for amortization of the Unfunded Actuarial Accrued Liability. This is in compliance with Part VII of Chapter 112, Florida Statutes. The required dollar contributions for the following year include a half-year of interest and a full year of salary increase based on the expected average salary increase for the upcoming year.

All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period.

Additionally, the assumed rate of retirement is 5.00% for each year of eligibility for early retirement. The assumed rates of retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. 7.75% per year, compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.

The assumed rates of salary increase were approved in conjunction with a special actuarial analysis dated March 16, 2012.

20% 3 20% 4 20%

Number of Years After First Eligibility For Normal

Retirement Probability of Normal

Retirement

1.00%

0.15% 0.18% 0.23% 0.30% 0.51%

% Becoming Disabled During the Year 0.14%

0 35% 1 20% 2

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GASB 68

Net Pension Liability

Deferred Inflows

Deferred Outflows

Pension Expense

Beginning balance $ 615,170 $ 273,625 $ 2,510,823 $ –

Employer and State Contributions made after 09/30/2016 – – 744,705 –

Total Pension Liability Factors: Service Cost 818,555 – – 818,555 Interest 1,946,348 – – 1,946,348 Change in Excess State Money 2,432 – – 2,432 Share Plan Allocation 495,699 – – 495,699 Changes in benefit terms – – – – Contributions – Buy Back 73,537 – – 73,537 Differences between Expected and Actual Experience with regard to economic or demographic assumptions (836,436) 836,436 – – Current year amortization of experience difference – (210,135) – (210,135) Change in assumptions about future economic or demographic factors or other inputs 201,521 – 201,521 – Current year amortization of change in assumptions – – (40,305) 40,305 Benefit Payments, including Refunds of Employee Contributions (1,052,549) – – –

Net change 1,649,107 626,301 905,921 3,166,741

Plan Fiduciary Net Position: Contributions – Employer 442,686 – (442,686) – Contributions – State 286,293 – (286,293) – Contributions – Employee 186,769 – – (186,769) Contributions – Buy Back 73,537 – – (73,537) Projected Net Investment Income 1,834,887 – – (1,834,887) Difference between projected and actual earnings on Pension Plan investments (158,624) – 158,624 – Current year amortization – (34,079) (477,185) 443,106 Benefit Payments, including Refunds of Employee Contributions (1,052,549) – – – Administrative Expenses (69,374) – – 69,374

Net change 1,543,625 (34,079) (1,047,540) (1,582,713)

Ending Balance $ 720,652 $ 865,847 $ 2,369,204 $ 1,584,028

FINAL COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2017

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GASB 68

Net Pension Liability

Deferred Inflows

Deferred Outflows

Pension Expense

Beginning balance $ 720,652 $ 865,847 $ 2,369,204 $ –

Employer and State Contributions made after 09/30/2017 – – TBD* –

Total Pension Liability Factors: Service Cost 856,749 – – 856,749 Interest 1,969,652 – – 1,969,652 Share Plan Allocation 11,304 – – 11,304 Changes in benefit terms – – – – Contributions – Buy Back 1,118 – – 1,118 Differences between Expected and Actual Experience with regard to economic or demographic assumptions (89,355) 89,355 – – Current year amortization of experience difference – (228,005) – (228,005) Change in assumptions about future economic or demographic factors or other inputs – – – – Current year amortization of change in assumptions – – (40,304) 40,304 Benefit Payments, including Refunds of Employee Contributions (1,138,395) – – –

Net change 1,611,073 (138,650) (40,304) 2,651,122

Plan Fiduciary Net Position: Contributions – Employer 446,583 – (446,583) – Contributions – State 298,122 – (298,122) – Contributions – Employee 180,673 – – (180,673) Contributions – Buy Back 1,118 – – (1,118) Projected Net Investment Income 1,886,149 – – (1,886,149) Difference between projected and actual earnings on Pension Plan investments 2,529 2,529 – – Current year amortization – (34,584) (477,186) 442,602 Benefit Payments, including Refunds of Employee Contributions (1,138,395) – – – Administrative Expenses (62,596) – – 62,596

Net change 1,614,183 (32,055) (1,221,891) (1,562,742)

Ending Balance $ 717,542 $ 695,142 TBD $ 1,088,380

PRELIMINARY COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2018

* Employer and State Contributions subsequent to the measurement date made after September 30, 2017 but made on or before September 30, 2018 need to be added.

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GASB 68

Increase (Decrease) in Pension Expense Arising from the Recognition of the of Differences Between Projected and Actual Earnings on Pension Plan Investments

Plan Year Ending

Differences Between Projected and Actual

Earnings Recognition

Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Recognitio 3 4 5 6 7 8 9 10 11 12 13

2014 (170,397)$ 5 (34,079)$ (34,079)$ (34,079)$ -$ -$ -$ -$ -$ -$ -$ -$ 2015 2,227,305$ 5 445,461$ 445,461$ 445,461$ 445,461$ -$ -$ -$ -$ -$ -$ -$ 2016 158,624$ 5 31,724$ 31,725$ 31,725$ 31,725$ 31,725$ -$ -$ -$ -$ -$ -$ 2017 (2,529)$ 5 -$ (505)$ (506)$ (506)$ (506)$ (506)$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense 443,106$ 442,602$ 442,601$ 476,680$ 31,219$ (506)$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – INVESTMENTS

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GASB 68

Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Changes of Assumptions

Plan Year Ending

Changes of Assumptions

Recognition Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Recognitio 3 4 5 6 7 8 9 10 11 12 13 2016 201,521$ 5 40,305$ 40,304$ 40,304$ 40,304$ 40,304$ -$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense 40,305$ 40,304$ 40,304$ 40,304$ 40,304$ -$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – CHANGES OF ASSUMPTIONS

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GASB 68

Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience

Plan Year Ending

Differences Between Expected and Actual

Experience Recognition

Period (Years) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Recognitio 3 4 5 6 7 8 9 10 11 12 13

2015 (214,235)$ 5 (42,847)$ (42,847)$ (42,847)$ (42,847)$ -$ -$ -$ -$ -$ -$ -$ 2016 (836,436)$ 5 (167,288)$ (167,287)$ (167,287)$ (167,287)$ (167,287)$ -$ -$ -$ -$ -$ -$ 2017 (89,355)$ 5 -$ (17,871)$ (17,871)$ (17,871)$ (17,871)$ (17,871)$ -$ -$ -$ -$ -$

Net Increase (Decrease) in Pension Expense (210,135)$ (228,005)$ (228,005)$ (228,005)$ (185,158)$ (17,871)$ -$ -$ -$ -$ -$

AMORTIZATION SCHEDULE – EXPERIENCE

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  • Balance Sheet 67
  • Market Net Assets 67
  • Info for Notes 67
  • Sponsor NPO 67
  • Schedule of NP Changes 67
  • Schedule of Contribution 67
  • Return Schedule 67
  • Info for Notes 68 p1-2
  • Info for Notes 68 p3
  • Final Deferred Flows 68
  • Preliminary Deferred Flows 68
  • Schedule of NP Changes 68
  • Schedule of Contribution 68
  • Final Expense 68
  • Preliminary Expense 68
  • Investment
  • Assumption Changes
  • Experience

Problem Set 1

Due date: February 13.

1.1 The Principles and Practice of Economics

1. Examine the following statements and determine if they are normative or positive in nature. Explain your answer.

The U.S. automotive industry registered its highest growth rate in 5 years in 2012; U.S. auto sales increased by 13% compared to 2011.

a. The U.S. government should increase carbon taxes to control emissions that cause global warming.

2. This chapter introduces the idea of opportunity cost.

a. What is meant by opportunity cost?

b. What is the opportunity cost of taking a year after graduating from high school and backpacking across Europe? Are people who do so being irrational?

1.2 Economic Methods and Economic Questions

3. What does it mean to say that economists use the scientific method? How do economists distinguish between models that work and those that don’t?

4. Explain why correlation does not always imply causation. Does causation always imply positive correlation? Explain your answer.

5. The use of machine learning and big data may improve the precision of economic predictions. However, economists may still be interested in disentangling causality relations between economic variables. Why?

6. How does a natural experiment differ from a randomized one?

1.3 Optimization

7. Some people choose to live close to the city center; others choose to live away from the city and take a longer commute to work every day. Does picking a location with a longer commute imply a failure to optimize?

8. Briefly describe the Lucas’ Critique.

1.4 Demand, Supply, and Equilibrium

9. How is the market demand schedule derived from individual demand schedules? How does the market demand curve differ from an individual demand curve?

10. Explain how the following factors will shift the demand curve for Gillette shaving cream.

a. The price of a competitor’s shaving cream increases.

b. With an increase in unemployment, the average level of income in the economy falls.

c. Shaving gels and foams, marketed as being better than shaving creams, are introduced in the market.

11. Explain how the following factors will shift the supply curve for sparkling wine:

a. New irrigation technology increases the output of grapes of a vineyard.

b. Following an increase in the immigration of unskilled labor, the wages of wine-grape pickers fall.

c. The government sets a minimum wage for seasonal employment. Note: wine-grape pickers are seasonal employees and the minimum wage is likely to be over their equilibrium wage.

12. Brazil is the world’s largest coffee producer. There was a severe drought in Brazil in 2013-14 that damaged Brazil’s coffee crop. The price of coffee beans doubled during the first three months of 2014.

a. Draw and discuss a supply and demand diagram to explain the increase in coffee prices.

b. Are coffee and tea substitutes or complements? Explain.

c. What do you think the impact of this drought has been on the equilibrium price and quantity of tea? Draw a supply and demand diagram for the tea market to explain your answer.

d. Do you think that the demand of coffee is elastic or inelastic.

e. Given your answer to (d), do you think that shifts in the supply of coffee have a potentially large effect on the price of coffee?

13. During the recent Great Recession diverse central banks (FED, BOE, ECB, JCB) have been carrying out Quantitative Easing (QE) policies: They have created money to buy securities such as government bonds from banks. This QE policy is supposed to lower interest rates. Could you please use a simple supply and demand model to explain this effect? (See, e.g., the second paragraph in

https://voxeu.org/article/how-quantitative-easing-works.)

2.1 The Wealth of Nations

12. GetNIPA Table 1.1.5 from the BEA web page:

https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey

Plot the share of the following components over GDP for the period 1929-2014

· Personal consumption expenditures (C)

· Gross private domestic investment (I)

· Net exports of goods and services (X-M)

· Government consumption expenditures and gross investment (G)

13. What are the key differences between the Consumer Price Index (CPI) and the GDP deflator?

14. A typical resident of the country of Collegia consumes a simple basket of goods consisting only of life’s essentials: soda, pizza, and Advil. A year’s basket contains 1,000 sodas, 100 pizzas, and 50 bottles of Advil. The price of these goods in each of the past eight years is given in the following table:

Using 2008 as the base year:

a. Calculate the CPI for each year.

b. Calculate the rate of inflation for each year from the previous year, starting with 2006.

15. According to Forbes magazine, Jeff Bezos net worth in 2018 is 112 Billion. (https://www.forbes.com/billionaires/ – 1c896a7d251c)

But, does this make Bezos the richest American who ever lived?

John D. Rockefeller, the founder of Standard Oil, is usually credited with this distinction. At the time of his death in 1937, the founder of the Standard Oil empire had an estimated net worth of $1.4 billion.

Please go to the BLS CPI site at http://data.bls.gov/cgi-bin/surveymost?cu. Under “Consumer Price Index-All Urban Consumers,” select “US All Items, 1982-84=100” and click the “Retrieve data” button at the bottom of the page. Adjust the years to retrieve data from 1937 through 2018. Use the data under the “Jan” column to calculate Bezos’ 2018 net worth measured in 1937 dollars. You should find that Bezos’ wealth does have more buying power than Rockefeller’s wealth.

2.2 Aggregate Incomes

16. Suppose you are comparing income per capita in the United States and Ghana. You first convert the values into U.S. dollars using the current exchange rate between the U.S. dollar and the Ghanaian cedi. You also convert both values to U.S. dollars using the purchasing power parity-adjusted exchange rate. Which measure is likely to give you a more accurate picture of the living standards in both countries? Explain your answer.

17. What is the correlation between income per capita and welfare measures like absolute poverty and life expectancy? What does this suggest about income per capita as a measure of welfare?

18. The following table lists 2012 GDP per capita for four countries. The data are given in the national currencies of the countries. It also lists the price of a Big Mac burger in local currency in each country in 2012.

Macintosh HD:Users:uskaaan:Desktop:Screen Shot 2014-12-17 at 2.49.38 PM.png

The price of a Big Mac in the United States in 2012 was $4.20.

Using the Big Mac burger as a representative commodity common to the countries, calculate the purchasing power parity (PPP)-adjustment factor for each country, and then the PPP level of per capita GDP in each country.

19. Suppose that the GDP in current dollars for Polonia is higher than Ruritania’s GDP. However, using purchasing-power-parity-adjusted dollars, Ruritania’s GDP is higher than Polonia’s GDP. Based on this information, what would you conclude about living standards in Polonia and Ruritania?

1

SodaPizzaAdvil

20051.00$ 8.00$ 10.00$

20061.50$ 8.00$ 10.00$

20071.50$ 8.50$ 11.00$

20082.00$ 8.50$ 11.50$

20092.50$ 9.00$ 11.00$

20102.50$ 9.00$ 10.00$

20112.00$ 10.00$ 12.00$

20123.00$ 10.00$ 13.00$

1.2 Economic Methods and Questions

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1.2 Economic Methods and Questions

The Scientific Method

Causation and Correlation

Economic Questions and Answers

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EBE Example

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Evidence-Based Economics Example: Is college worth it?

1. The Scientific Method

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The scientific method (also referred to as empiricism) is composed of two steps: 1. Developing models that explain some part of the world 2. Testing those models using data to see how closely the model matches what we actually observe

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Model

A simplified description of reality

Is this an airplane?

1. The Scientific Method

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What’s the shortest distance between two points?

Exhibit 2.1 Flying from New York to Tokyo Requires More Than a Flat Map

1. The Scientific Method

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Evidenced-Based Example:

Returns to education

Assumption—one more year of education results in a 10% increase in future earnings

1. The Scientific Method

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Returns to education:

If you would earn $15 per hour with 12 years of education, with one more year of education (your first year of college) you would earn:

$15 x 1.10 = $16.50

1. The Scientific Method

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Returns to education:

If you would earn $16.50 with 13 years of education, with one more year of education (2nd year of college), you would earn:

$16.50 x 1.10 = $18.15

1. The Scientific Method

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Returns to education:

The third year: $18.15 x 1.1 = $19.97

The fourth year: $19.97 x 1.1 = $21.97

1. The Scientific Method

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Returns to education:

Hypothesis:

Getting a college degree (years 13-16) increases wages from $15 to $21.97, or 46.5%

[(($21.97 – $15)/$15) = .4647]

1. The Scientific Method

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Two important features of models:

They are not exact. Not everyone will see their wages increase by 10% with every additional year of education

They generate predictions that can be tested with data

1. The Scientific Method

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Hypothesis: Each additional year of education increases wages by 10%

True or False?

1. The Scientific Method

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Exhibit 2.3 Average Annual Earnings of 30-Year-Old Americans by Education Level (2013 data)

1. The Scientific Method

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How much higher is the wage for college graduates than for high school graduates?

College = $59,086

High School = $39,376

College results in a wage that is 50% higher.

[(($59,086 – $39,376)/$39,376) = .50]

Model predicted 46.5%. Is that close enough?

1. The Scientific Method

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If college graduates earn, on average, $59,086/year, does that mean that all college graduates earn that much?

1. The Scientific Method

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Can Bill Gates make you rich?

1. The Scientific Method

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Speaking of Bill Gates…

How does his level of education affect his income?

1. The Scientific Method

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When you look at only a small amount of data, it is easy to jump to the wrong conclusions.

One exception Counterexample.

1. The Scientific Method

2. Causation and Correlation

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Causation

When one thing directly affects another

Example: pulling an all-nighter will make you tired

2. Causation and Correlation

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Correlation

When two things are related (causation could not be present)

Positive correlation – they both change in the same direction

Negative correlation – they change in opposite directions

2. Causation and Correlation

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Why isn’t correlation the same thing as causality?

Omitted variables

If we ignore something that contributes to cause and effect, then that something is an omitted variable. A correlation might not make sense until the omitted variable is added.

Example: Named Cows.

2. Causation and Correlation

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Why isn’t correlation the same thing as causality?

2. Reverse causality

Reverse causality is when there is cause and effect, but it goes in the opposite direction as what we thought.

Example: gambling and healthier older people

2. Causation and Correlation

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How can we tell the difference between causality and correlation?

Experiments

Controlled = subjects are randomly put into treatment (something happens) and control (nothing happens) groups by the researcher.

Problem: difficult to do with economics studies

2. Causation and Correlation

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How can we tell the difference between causality and correlation?

Experiments

Natural = subjects end up in treatment or control groups due to something that is not purposefully determined by the researcher

2. Causation and Correlation

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Evidence-Based Economics and Natural Experiments

How much is an extra year of school worth?

In 1947, the UK raised the minimum drop-out age from 14 to 15.

Those students reaching age 14 before 1947 = control group

Those students reaching age 14 in 1947 or after = treatment group

2. Causation and Correlation

3. Economic Questions and Answers

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Two Properties of a Good Economic Question:

Relevant and important

Economic research contributes to social welfare

Can be answered

Economic questions can be answered empirically

Key Ideas

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A model is a simplified description of reality.

Economists use data to evaluate the accuracy of models and understand how the world works.

Correlation is not the same thing as causality.

Key Ideas

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Experiments help economists to measure cause and effect.

Economic research focuses on questions that are important to society and can be answered with models and data.