Schedule of Changes in the Net OPEB Liability and Related Ratios

NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2021

Note 10: Long-Term Debt (Continued)

Capital Lease Payable

The future minimum lease obligations and the net present value of these minimum lease payments are as follows:

Year Ending June 30, 2022 Total minimum lease payments Less: amounts representing interest

BusinessType Activities 75,072$ 75,072 (1,988) Present value of minimum lease payments 73,084 $

Note 11: Compensated Absences

Compensated Absences

For the fiscal year ended June 30, 2021, compensated absences are as follows:

Balance Balance Due Within June 30, 2020 Additions Reductions June 30, 2021 One Year

Compensated absences: Governmental activities $ 16,933,089 $ 4,811,766 $ 5,170,438 $ 16,574,417 $

5,170,438 Business-type activities 619,905 190,832 153,405 657,332 153,405 Total compensated absences 17,552,994 $ $ 5,002,598 $ 5,323,843 $ 17,231,749 $ 5,323,843

The compensated absences are predominantly associated with the General fund.

Note 12: Claims and Judgements

Claims Payable (Self-Insurance)

The City has two types of claims it has to manage and account for. The City is a member of Independent Cities Risk Management Authority (ICRMA), an Authority that provides liability insurance for several California Cities, and employs independent claims administrators to accomplish this task. The two types of claims are workers’ compensation and general liability. The self-insured retention and limits of insurance coverage (each occurrence or per employee, per year) for the respective claims are as follows:

Self-Insured Retention

Limit of Insurance Coverage Workers' Compensation 750,000$ 5,000,000 $ General Liability 2,000,000 20,000,000

NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2021

Note 12: Claims and Judgements (Continued)

Changes in the workers’ compensation, employee health benefits, and general liability outstanding claims liability for the fiscal year ended June 30, 2021, were as follows:

General Liability

Workers' Compensation

Employee Health Benefit Total Claims Payable, June 30, 2020 4,443,000$ 14,951,484$ 85,000$ 19,479,484 $ Claims and Changes in Estimates 2,110,495 5,177,321 - 7,287,816 Claims Payments (188,495) (2,505,805) - (2,694,300) Claims Payable, June 30, 2021 6,365,000$ 17,623,000$ 85,000$ 24,073,000 $

The amounts payable include Incurred but Not Reported (IBNR) claims. Payments are typically paid from General Fund and Employee Benefits Internal Service Fund. The various amounts are based on information provided by the City’s claims administrators.

Commitments and Contingencies

The City is subject to litigation arising in the normal course of business. A liability in the amount of $1,903,430 related to estimated claims liability regarding a settlement , expected to finalize late 2021 has been included in the City’s General fund.

Note 13: City Employee Retirement Plan

a. General Information about the Pension Plans

The City of Downey contributes to the State of California Public Employees Retirement System (CalPERS), which is an agent multiple-employer public employee defined benefit pension plan. All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS’ annual financial report may be obtained from their Executive Office - 400 P Street Sacramento, California 95814, or downloaded from the website at www.calpers.ca.gov.

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible for non-duty disability benefits after 10 statutorily reduced benefits.