Page 17 - ANALYSIS.XLS

City Retirement Plan (TMRS) Funding
The City’s contribution rate for the City of McAllen for calendar year 2020 and 2021 was 7.81% and
8.19%, respectively for a blended rate for the fiscal year 2020-21 of 7.91%. The plan is almost fully-funded
with a funded ratio of 92%. The rate used to develop the budget is 8.66% of payroll.

Health Insurance
This year, the City’s cost of providing health insurance is budgeted an increase from last year’s adjusted
budget level. The total amount budgeted for claims is $13.6M. Last year’s estimated claims were $12.3M-
---- under the $19.9M quoted by the carrier for aggregate stop loss coverage that the City elected to renew.
There were some changes necessary as a result of the decreasing fund balance that supports the funding
of the City’s Health Plan. A three-year premium adjustment recommendation was reviewed that would
align our premiums with the actuarial evaluation of premiums. The City added a “Buy Up Plan” to its
coverage.

Retiree Health Insurance Plan
The City had an actuarial valuation performed as of October 1, 2014 to determine the annual required
cost (ARC) as well as the unfunded liability. Starting with the October 1, 2016 valuation, the actuarial
valuation is performed in accordance with the new GASB 75 accounting standards, replacing GASB 45,
which prescribes the City’s financial reporting of the effects of this valuation for fiscal years 2015-16 and
2016-17, the ARC was determined to be $825K for all City funds. The amount used in the budget is
$844K.

Debt Discussion
The City has an outstanding debt balance of $86.7M in General Obligation and Combination of Tax and
Revenue Certificate of Obligations. The City also has outstanding certificate of obligations in the amount
of $9.3M for additional funding on the Performing Arts Facility of which will be repaid through the Hotel
Tax revenue.

The City held a Bond election on May 5, 2018 and citizens approved the issuance of Bonds for $25M;
$22M for Drainage improvements and $3M for Traffic improvements.

In addition, the City has $130M outstanding in Revenue Bonds in the Waterworks and Sewer System.
This amount is comprised of different issues and for the undertaking of various water projects including
the sludge dewatering at the South Water Treatment Plant, a transmission line from Main to Ware to the
South Water Treatment Plant, HCID #1 raw water line and improvements to the South Water Treatment
Plant Expansion Filter/Clarifier. Proposed loan funding for FY 2020-2021 will be used for City-wide
implementation of Advanced Metering Infrastructure (AMI) to replace all existing, manually-read water
meters. Appropriations for various wastewater projects include an upgrade to the South Wastewater
Treatment Plant administration building, improvements to the electrical and SCADA systems at the North
Wastewater Treatment Plant and installation of the Sprague Interceptor Sewer, installation of Reuse Water
Distribution Pipeline along with Pump Stations. Also, Wastewater collection pipelines are going to be
installed to provide services to un-sewered Colonia’s in the northwest side of the City.

The other Revenue Bonds the City has outstanding are the Airport and Anzalduas bonds which were used
for the Airport Expansion and the construction of the Anzalduas span.
A detail listing of the individual issues is provided in pages 124-125.

2020-2021 Budget Message v