Comprehensive Annual Financial Report - Metro Transit

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Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Funding PolicyNormal annual costs of the plan are funded by employer and retiree contributions that arepay-as-you-go financing requirements. Metro established a trust for future other postemploymentbenefits (OPEB) funding above the pay-as-you-go methodology. For fiscalyears 2011 and 2010, Metro expenses under the pay-as-you-go methodology were $7.0million and $6.8 million, respectively. Metro’s actual contributions under the pay-as-yougomethodology have been favorable as compared to the actuarial estimate for the pasttwo years.The contribution requirements of plan members and Metro are established and may beamended by the Board of Commissioners. The required contribution is based uponprojected pay-as-you-go financing requirements, with an additional amount to prefundbenefits as determined annually by Metro. For the fiscal year 2011, Metro contributed$10.0 million to the plan, including $7.0 for current annual costs and an additional $3.0million to prefund benefits. For the fiscal year 2010, Metro contributed $9.9 million to theplan, including $6.8 for current annual costs and an additional $3.1 million to prefundbenefits.Annual OPEB Cost and Net OPEB Obligation.Metro’s annual OPEB cost (expense) is calculated based on the annual requiredcontribution of the employer (ARC), an amount actuarially determined in accordance withthe parameters of GASB No. 45. The ARC represents a level of funding that, if paid onan ongoing basis, is projected to cover normal cost each year and amortize anyunfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.The following table shows the actuarial assessment of Metro’s annual OPEB cost for theyear and the changes in Metro’s net OPEB obligation. The following table is inthousands.20112010Annual required contribution $ 18,078 $ 18,078Interest on net OPEB obligation 1,578 1,029Adjustment to annual required contribution (1,986) (1,274)Annual OPEB cost (expense) 17,670 17,833Contributions (10,046) (9,914)Increase in net OPEB obligation 7,624 7,919Net OPEB obligation—beginning of year 31,569 23,650Net OPEB obligation—end of year $ 39,193 $ 31,56951
Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Metro’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,and the net OPEB obligation for 2011 is as follows (dollar amounts in thousands):Fiscal YearEndedAnnualOPEB CostPercentage of AnnualOPEB Cost ContributedNet OPEBObligation06/30/08 $18,157 36.7% $11,50106/30/09 $18,157 33.1% $23,65006/30/10 $18,078 54.8% $31,56906/30/11 $18,078 55.5% $39,193Funded Status and Funding ProgressIn the July 1, 2009, the most recent actuarial valuation date, the plan was 1.6 percentfunded. The actuarial accrued liability for benefits was $191.2 million and the actuarialvalue of assets was $3.1 million, resulting in an unfunded actuarial accrued liability(UAAL) of $180.2 million. Covered payroll amounted to $83.7 million and the unfundedactuarial accrued liability as a percent of covered payroll is 215.3%.The schedule of funding progress, presented as required supplementary information(RSI) following the notes to the financial statements, presents multiyear trend informationabout whether the actuarial value of plan assets are increasing or decreasing over timerelative to the actuarial accrued liability for benefits.Actuarial Methods and AssumptionsActuarial valuations of an ongoing plan involve estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Examples include assumptions about future employment, mortality, and thehealthcare cost trends. Amounts determined regarding the funded status of the plan andthe annual required contributions of the employer are subject to continual revision.Actual results are compared with past expectations and new estimates are made aboutthe future.Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as understood by the employer and the plan members) and include the types ofbenefits provided at the time of each valuation and the historical pattern of sharing ofbenefit costs between the employer and plan members to that point.In the July 1, 2009, actuarial valuation, the projected unit credit cost method was used.The actuarial assumptions include a 5.0% discount rate of return (net of administrativeexpenses), and an annual healthcare cost trend rate of 8.10% in 2009 and grading downto 4.7% in the year 2085 and each year thereafter. The UAAL is being amortized as alevel dollar amount over 30 years. The remaining amortization period at July 1, 2010,was 27 years.52
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2011Comprehensive AnnualFinancial R
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Introduction SectionBi-State Develo
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October 26, 2011Vincent C. Schoemeh
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Sources of Local Match Funding for
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Business EnterprisesAll other opera
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Emerson Electric, Express Scripts a
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Executive OfficersJohn M. NationsPr
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Page 113 and 114: Ticket prices are: All: $62.00"Sund
Page 119: 707 N. First StreetSt. Louis, MO 63
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Comprehensive Annual Financial Report - Metro Transit

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