City of Coral Springs, Florida Notes to Financial Statements

Note 16. Other Post-Employment Benefits (Continued) Net OPEB Liability

The City’s net OPEB liability was measured as of September 30, 2021 The total OPEB liability used to calculate the net OPEB liability was determined as of that date.

Actuarial assumptions. The total OPEB liability was determined by an actuarial valuation as of October 1, 2020 with updated asset information as of September 30, 2021, using the following assumptions, applied to all prior periods included in the measurement:

For police and fire employees, mortality rates were based on sex distinct PUB 2010 safety employees headcount weighted mortality table with generational mortality improvement scale MP-2020 For all other employees, mortality rates were based on sex distinct PUB 2010 general employees headcount weighted mortality table with generational mortality improvement scale MP-2020

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best–estimate ranges of expected future real rates of return (expected returns, net of investment expense 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.

The following assumptions were changed: The discount rate increased from 3.08% to 3.21% and the per capita claims costs for medical coverage were updated.

City of Coral Springs, Florida

Notes to Financial Statements

Note 16. Other Post-Employment Benefits (Continued)

The target allocation and best estimates of real rates of return for each major asset class as of September 30, 2021 (measurement date), are summarized in the following table:

Discount rate The discount rate used to measure the total OPEB liability was 3.21%. The projection of cash flows used to determine the discount rate assumes that City contributions will be made at rates equal to the actuarially determined contribution rates The discount rate is based on a blend of the expected long-term rate of return on assets of 5.50% for benefit payments during the first 14 years after the valuation date and a yield on 20-year grade AA/Aa or higher municipal bonds of 2.43% per year for benefit payments beyond the first 14 years after the valuation date.

Changes in the Net OPEB Liability

City of Coral Springs, Florida

Notes to Financial Statements

Note 16. Other Post-Employment Benefits (Continued)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following table illustrates the impact of interest rate sensitivity on the net OPEB liability of the City as of September 30, 2022:

1% Decrease Discount Rate 1% Increase

Sensitivity of the Net OPEB Liability to Changes in the healthcare cost trend rates The following table illustrates the impact of healthcare cost trend rate sensitivity on the net OPEB liability of the City as of September 30, 2022:

1% Decrease Healthcare Cost Trend Rates 1% Increase (6.31% decreasing to 2.90%) (7.31% decreasing to 3.90%) (8.31% decreasing to 4.90%)

For the year ended September 30, 2022, the City recognized OPEB expense of $72,733 On September 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to the OPEB plan from the following sources: