Preview
F Superior Court of California F
PORTER | scoTtT
| County of Butte
|
A PROFESSIONAL CORPORATION
Derek J. Haynes, SBN 264621 L 3/4/2021 L
Marc A. Rodriguez, SBN 329938
350 University Avenue, Suite 200
Sacramento, Califomia 95825
D Kimbéiy. Bile. lee D
TEL: 916.929.1481 By __ Deputy
Electronically FILED
FAX: 916.927.3706
Attomeys for Defendants
THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY
and CHICO STATE ENTERPRISES
Exengpt From Filing Fees Pursuant to Goverment Code § 6108
SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUITE
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11
BROOKS O'BRIEN, Case No. 20CV01050
12
Plaintiff, DECLARATION OF DEREK J. HAYNES
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IN SUPPORT OF OPPOSITION TO
14 Vv. PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE
15 THE BOARD OF TRUSTEES OF THE ENTERPRISES TO PROVIDE FURTHER
CALIFORNIA STATE UNIVERSITY, VERIFIED RESPONSES AND
16
CHICO STATE ENTERPRISES, and PRODUCTION OF DOCUMENTS TO
17 DOES 1 through 10, inclusive. PLAINTIFF'S REQUEST FOR
PRODUCTION OF DOCUMENTS, SET 3,
18 Defendants. NOS. 50 AND 58
19
Date: March 17, 2021
20 Time: 9:00am.
Dept:6
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22 Complaint Filed: 05/20/20
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24 I, DerekJ. Haynes, declare:
25 1 I am an attomey duly licensed to practice before all of the courts of the State of
26 Califomia and am a shareholder with the law firm of Porter Scott, attomeys of record for Defendants
27 THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY and CHICO STATE
28 ENTERPRISES.
{02375094.DOCX} 1
DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION
OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58
2. Plaintiff filed her initial complaint on May 20, 2020 which she then amended on
January 5, 2021. The operative complaint alleges four causes of action: (1) Disability Discrimination
under the FEHA, (2) Age Discrimination under the FEHA, (3) Retaliation under the CFRA and (4)
Failure to prevent Discrimination under Govemment Code section 12940(k).
3, On October 19, 2020, Plaintiff served a third set of document requests on Defendant
Chico State Enterprises (“Defendant”) where among other things, Defendant asked for (1) written
summaries of personnel changes resulting from the reorganization and (2) documents evidencing the
balance and any transfers from CSE’s post-retirement benefit fund. Defendant served its responses on
November 25, 2020, stating that it would comply with Request No. 50 to the extent that it could locate
10 any documents responsive to the request. But Defendant
objected to Request No. 58 on the grounds
that
11 the request was ambiguous because there is no Post-Retirement Benefit Fund from which Defendant
12 pays out medical benefits.
13 4. Plaintiff sent a meet and confer letter on January 7, 2021, demanding Defendant amend.
14 its responses to request Nos. 50 and 58. As for request No. 50, Defendant responded, stating it could not
15 locate any responsive documents. Defendant also provided Plaintiff with a verified amended response to
16 request No. 50, stating that aftera diligent search and reasonable inquiry, Defendant could not comply
17 with the request because the documents had been lost. A true and correct copy of Defendant's
further
18 amended response to request for production of documents, set three, is attached hereto as ExhibitA.
19 5, As for request No. 58, Defendant explained that Plaintiff's request was ambiguous
20 because it does not maintain a separate account to pay out post-retirement health benefits and was
21 therefore unable to amend its response. Defendant has explained this to Plaintiff many times.
22 6. Additionally, Defendant produced the actuarial valuation report for its post-retirement
23 health benefits plan for 2017, 2018, and 2019 in response to Plaintiff’s Request for Production of
24 Documents, set two. A true and correct copy of the report is attached hereto as Exhibit B.
25 I make this Declaration on my own personal knowledge except to the facts stated on information
26 and belief. As to such facts, I believe them to be true. If called upon to do so, I could and would
27 competently testify about the matters asserted herein.
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{02375094.DOCX} 2
DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION
OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58
I declare
under the penalty of perjury under
the laws of the State of Califomia
that the foregoing
is true and correct and that this declaration was executed on this 4 day of March, 2021 at Sacramento,
Califomia.
TSA
Derek
J. Haynes
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{02375094.DOCX} 3
DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION
OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58
Exhibit A
PORTER | scoTtT
A PROFESSIONAL CORPORATION
DerekJ. Haynes, SBN 264621
Marc A. Rodriguez, SBN 329938
350 University Avenue, Suite 200
Sacramento, Califomia 95825
TEL: 916.929.1481
FAX: 916.927.3706
Attomeys for Defendants
THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY
and CHICO STATE ENTERPRISES
Exempt From Filing Fees Pursuant to Government Code § 6108
SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUTTE
10
11
BROOKS O'BRIEN, Case No. 20CV01050
12
Plaintiff, DEFENDANT CHICO STATE
13
ENTERPRISES’ FURTHER AMENDED
14 Vv.
RESPONSE TO REQUEST FOR
PRODUCTION OF DOCUMENTS, SET
15 THE BOARD OF TRUSTEES OF THE THREE
CALIFORNIA STATE UNIVERSITY, CHICO
16
STATE ENTERPRISES, and DOES 1 through
17 10, inclusive.
18 Defendants. Complaint Filed: 05/20/20
19
20
21 PROPOUNDING PARTY: Plaintiff BROOKS O’ BRIEN
22 RESPONDING PARTY: — Defendant CHICO STATE ENTERPRISES
23 SET NUMBER: Three
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25 Pursuant to Code of Civil Procedure § 2031.210, et seq., Defendant amends its response to
26 Plaintiff’s Request for Production of Documents, Set Three, as follows:
27 //1
28 //1
{02380601.DOCX} 1
DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR,
PRODUCTION OF DOCUMENTS, SET THREE
PRELIMINARY STATEMENT
In responding to this Request for Production of Documents, responding party has not completed.
its investigation of all facts of this case, or discovery in this matter, and has not completed its
preparation for trial. Accordingly, the following responses are provided without prejudice to responding
party’s right to introduce at trial any evidence that is subsequently discovered relating to proof of
presently known facts and to produce and introduce all evidence whenever discovered
relating to the
proof of subsequently discovered material facts. Moreover, facts, documents, and things now known
may be imperfectly
understood and accordingly, such facts, documents, and things may not be included
in the following responses.
10 Responding party reserves the right to refer to, conduct discovery with reference to, or offer into
11 evidence at the time of trial any and all facts, documents, and things which it does not presently recall
12 but may recall at some time in the future, notwithstanding
the initial responses provided herein.
13 Responding party further reserves the right to raise all appropriate objections with reference to the
14 admissibility of any response or document at the time of trial, even though it may not be specifically
15 objected to in these responses during discovery.
16 Responding party objects to propounding party’s requests insofar as they seek information that is
17 protected from disclosure by the attomey-client privilege, the work product doctrine, and any other
18 applicable privilege. To the extent that responding party inadvertently discloses information that is
19 protected under any applicable privilege, such inadvertent disclosure does not constitute a waiver of
20 such privilege.
21 Responding party further objects to propounding party's requests insofar as they seek
22 information conceming
matters unrelated to the subject matter of the lawsuit, on the grounds that such
23 requests
are overbroad, unduly burdensome, and seek information that is neither relevant to the subject
24 matter of this action nor reasonably calculated to lead to the discovery of admissible evidence.
25 These general objections are applicable to each and every one of the following responses and
26 objections, and failure to repeat an objection in response to a specific request shall not be deemed waiver
27 of the objection. Further, when responding party specifically repeats one or more of these general
28 objections
in response to a specific request, such specific response cannot be a waiver of these general
{02380601.DOCX} 2
DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR,
PRODUCTION OF DOCUMENTS, SET THREE
objections.
Defendant responds as follows to Plaintiff's Request for Production of Documents, Set Three, in
accordance with Defendant’ s understanding of the fair meaning of those requests.
RESPONSE TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET THREE
REQUEST FOR PRODUCTION NO. 50:
Please produce any and all written summaries of any and all personnel changes as a result of
the CSE Reorganization written by interim CEO David Hassenzahl referenced in the September 13,
2019 Finance and Investment Committee minutes marked as Deposition Exhibit 14.
RESPONSE TO REQUEST FOR PRODUCTION NO. 50:
10 Objection. This request is overbroad to the extent it calls for information outside of Plaintiff's
11 department. This request also calls for information not reasonably calculated to lead to the discovery of
12 admissible evidence. Subject to the foregoing objections, Defendant responds as follows:
13 Defendant will comply with the request and produce all responsive documents within its
14 possession, custody, or control, to the extent any exist.
15 AMENDED RESPONSE TO REQUEST FOR PRODUCTION NO. 50:
16 Objection. This request is overbroad to the extent it calls for information outside of Plaintiff's
17 department. This request also calls for information not reasonably calculated to lead to the discovery of
18 admissible evidence. Subject to the foregoing objections, Defendant responds as follows:
19 After a diligent search and reasonable inquiry, Defendant is unable to comply with this request
20 because the requested documents have been lost.
21
Dated: March 3, 2021 PORTER SCOTT
22
A PROFESSIONAL CORPORATION
23
24 By | D4
DerekJ. Haynes
25
Marc A. Rodriguez
26 Attomeys for Defendants
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{02380601.DOCX} 3
DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR,
PRODUCTION OF DOCUMENTS, SET THREE
Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al.
Butte C ounty Superior C ourt Case No. 20C V01050
VERIFICATION BY REPRESENTATIVE
The undersigned hereby asserts as follows:
I am a representative in the above-entitled proceeding. The matters contained in
DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO
REQUEST FOR PRODUCTION OF DOCUMENTS, SET THREE, are true of my own
knowledge, except as to the matters therein stated on information and belief, and as to those
matters I believe them to be true.
10 I declare under penalty of perjury under the laws of the State of Califomia that the
11 foregoing is true and correct.
12 Executed on March 3rd, 2021, at Chico, Califomia.
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Au
Aa 14 Russel] Wittmeier
at
gs 15 Human Resources/Payroll Director
oS
aS Chico State Enterprises
aa
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Ok
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VERIFICATION
{02380638.DOCX}
Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al.
Butte C ounty Superior Court Case No. 20CV01050
PROOF OF SERVICE
At the time of service, I was over 18 years of age and not a party to this action. My business
address is 350 University Avenue, Suite 200, Sacramento, Califomia 95825.
On the date below, I served the folwi document: DEFENDANT CHICO STATEMENT
ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR PRODUCTION OF
DOCUMENTS, SET THREE
v BY MAIL: I placed the envelope for collection and mailing, following our ordinary business practices.
I am readily familiar with this business’ practice for collecting and processing correspondence for
mailing. On the same day that correspondence is placed for collection and mailing, it is depositedin the
ordinary course of business with the United States Postal Service, in a sealed envelope with postage
10 fully prepaid.
BY PERSONAL SERVICE: I caused such document to be personally delivered to the person(s)
11 addressed below.
BY OVERNIGHT DELIVERY: I enclosed the documents in an envelope or package provided by an
12 ovemight delivery carrier and addressed to the person(s) listed below. I placed the envelope or package
for collection and ovemight delivery at my office or a regularly utilized drop box of the ovemight
13 delivery carrier.
BY FAX TRANSMISSION: Based on an agreement of the parties to accept service by fax
14
transmission, I faxed the documents to the persons at the fax numbers listed below. No error was
15 reported by the fax machine that I used. A copy of the record of the fax transmission, which
I printed
out, is attached
16 BY ELECTRONIC SERVICE: By e-mailing the document(s) to the persons at the e-mail address(es)
listed. Due to a shelter-in-place order issued on account of the Covid-19 pandemic, this office will be
17 primarily working remotely, unable to send or receive physical mail as usual, and is therefore using only
18 electronic mail. No electronic message or other indication that the transmission was unsuccessful was
received within a reasonable time after the transmission.”
19
Jill P. Telfer
20 TELFER LAW
21 331 J Street, Suite 200
Sacramento, CA 95814.
22 jtelfer@telfedaw.com
jchau@telfedaw.com
23 mqguevara@telferlaw.com
24 coumphy@telfedaw.com
25 I declare under penalty of perjury under the laws of the State of Califomia that the foregoing is
true and correct. Executed
at Sacramento, Califomia
on March 3, 20201.
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{02380601.DOCX} 4
DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR,
PRODUCTION OF DOCUMENTS, SET THREE
Exhibit B
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB)
Plan Description
CSE administers an endowment-funded single-employer defined benefit healthcare plan. CSE currently provides
retiree health benefits to eligible employees to the extent sustainable by the provided endowment and can be
terminated at any time. The postretirement health care plan is contributory with retiree contributions adjusted
annually. Separate stand-alone financial statements for the plan are not prepared.
Eligi ity and Benefits
Tier 1: Employees hired before January 1, 2006 who have attained age 55 and have completed 15 years of credited
CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for
breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400
for those with dual or family coverage. Benefits are paid for the lifetime of the retiree. As of July 1, 2017, there are
45 active employees and 2 retirees under this benefit structure.
CHICO STATE ENTERPRISES (Formerly The CSU, Chico Research Foundation)
Notes to the Financial Statements
Years Ended June 30, 2019 and 2018, as Restated
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued
Tier 2: Employees hired on or after January 1, 2006 who have attained age 60 and have completed 15 years of
credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is
lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage
and $400 for those with dual or family coverage. Benefits are paid until the retiree reaches age 65. As of July 1,
2017, there are 136 active employees under this benefit structure.
As of July 1, 2017, the date of the most recent actuarial valuation, plan participation consisted of:
Retirees and beneficiaries receiving benefits 2
Active employees 181
Total plan participants 183
Funding Policy
CSE has the right to establish and amend the funding policy fori EB pl ‘SE will fund the plan monthly, on a
pay-as-you-go basis for members who meet the eligibility crit The contrib! requirements of plan members
and CSE are established and may be amended by CSE’s rd of, rectors. the year ended June 30, 2019,
CSE contributed $13,776, which was the annual required ibi per the July 1, 2017 Actuarial Report for the
OPEB.
OPEB Liabilities, OPEB Expense and Deferred of Ri ices and Deferred Inflows of Resources
Related to OEPB
CSE’s Net OPEB Liability was measured a: of June 19 ‘s’ annual OPEB cost (expense) is an amount
actuarially determined in accordance wit ent counting Standards Board (GASB) Statement Number
75. The Actuarially Determined Contrib )isa jount actuarially determined by the Actuarial Standards
of Practice and applicable Federal a he A represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost ear anda ortize any unfunded actuarial liabilities (or funding excess)
over a period not to exceed thi eal The following table shows the components of CSE’s annual OPEB cost
for the year, the amount act ted, the changes in CSE’s net OPEB plan position as of June 30, 2019.
2019 2018
Service cost 41,923 $ 44,538
Interest on net OPEB Obligation 18,930 15,854
Change of assumptions 31,900 (28,221)
Annual OPEB cost (expense) 92,753 32,171
Benefit payments (13,776) (17,701)
Net change in total OPEB liability 78,977 14,470
Net OPEB Obligation - Beginning of Year 529,756 515,286
Net OPEB Obligation - End of Year 608,733 $ 529,756
16
CHICO STATE ENTERPRISES (Formerly The CSU, Chico Research Foundation)
Notes to the Financial Statements
Years Ended June 30, 2019 and 2018, as Restated
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued
The Net OPEB liability of $608,733 is presented as a non-current liability on CSE’s statement of net position.
Actual Employer Percentage Net Ending OPEB
Years Ended June 30 Annual OPEB Cost Contributions Contributed Obligation
2019 $ 92,753 $ 13,776 14.85% $ 608,733
2018 $ 32,171 $ 17,701 55.02% 529,756
2017 $ 55,214 $ 22,967 41.60% 598,646
2016 $ 54,096 $ 58,427 108.01% 566,399
(NOTE: The schedule above is intended to show information for the pr s ten (10) years. Since 2018 was the
first year for the presentation of this information, only data from 2016 forward is available.)
Funded Status and Funding Progress
The most recent actuarial valuation report for CSE’s OPEB pl as prepare of July 1, 2017. As of June 30,
2019, the actuarial accrued liability for benefits was $608,73; id the ir value 0} er assets held at the University
Foundation was $515,421. The annual covered payroll $8,6, 12 and the ratio of the unfunded actuarial
accrued liability to covered payroll was 7%.
Actuarial valuations of an ongoing plan involve esti of the v: of reported amounts and assumptions about
the probability of occurrence of events far into the fu' lude assumptions about future employment,
mortality, and healthcare cost trend. Amounts deter gard ig the funded status of the plan and the annual
required contributions of the employer ar t to inual revision as actual results are compared with past
expectations and new estimates are ma about, ie futu The schedule of funding progress, presented as required
supplementary information following. e notes he fi cial statements, presents multi-year trend information
about whether the actuarial value of pla Ing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and mptions
The total OPEB liability wa etermined U ing the following actuarial assumptions, applied to all periods included in
the measurement, unless ot! ise speg ed:
Salary increases 3.00 percent
Healthcare cost trend rate 5.00 percent for 2018; 5.00 percent for 2019; and5.00
percent for 2020 and later years
Cap increases None
Pre-retirement mortality rates were based on the RP-2014 Employee Mortality Table for Males or Females, as
appropriate, without projection. Post-retirement mortality rates were based on the RP-2014 Health Annuitant
Mortality Table for Males or Females, as appropriate, without projection.
Retirement and termination assumptions used were based on a review of plan experience and our best estimate of
future plan experience.
GASB 75 requires a discount rate that reflects the following:
a) The long-term expected rate of return on OPEB plan investments — to the extent that the OPEB plan’s fiduciary
net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be
invested using a strategy to achieve that return;
17
CHICO STATE ENTERPRISES arch Foundation)
Notes to the Financial Statements
Years Ended June 30, 2019 and 2018, as Restated
Note 11 —- Postemployment Benefits Other Than Pension Benefits (OPEB), continued
b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa
or higher— to the extent that the conditions in (a) are not met.
To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and
the amount of projected benefit payments is compared in each period of projected benefit payments. The discount
rate used to measure CSE’s Total OPEB liability is based on these requirements and the following information:
Sensitivity of the Net OPEB Liability to Changes in the ount, ite
The following presents the net OPEB liability, as well as OPEB liability would be if it were calculated
using a discount rate that is 1 percentage point lower (2.13%) ercentage point higher (4.13%) than the current
discount rate:
1% Discount Rate 1% Increase
(3.13%) (4.13%)
Net OPEB liability 80,391 608,733 $ 545,694
Sensitivity of the Net OPEB Lia! lit Trend Rate The following presents the net OPEB liability,
as well as what the net OPEB liability be if it were calculated using healthcare cost trend rates that are 1
percentage point lower (4.00%) or 1 percent point higher (6.00%) than the current healthcare cost trend rate of
5%:
Net OPEB liability 602,362 $ 608,733 $ 613,161
18
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB)
Plan Description
CSE administers an endowment-funded single-employer defined benefit healthcare plan. CSE currently provides
retiree health benefits to eligible employees to the extent sustainable by the provided endowment and can be
terminated at any time. The postretirement health care plan is contributory with retiree contributions adjusted
annually. Separate stand-alone financial statements for the plan are not prepared.
Eligibility and Benefits
Tier 1: Employees hired before January 1, 2006 who have attained age 55 and have completed 15 years of credited
CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for
breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400
for those with dual or family coverage. Benefits are paid for the lifetime of the retiree. As of July 1, 2019, there are
37 active employees and 3 retirees under this benefit structure.
Tier 2: Employees hired on or after January 1, 2006 who have attained age 60 and have completed 15 years of
credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is
lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage
and $400 for those with dual or family coverage. Benefits are paid until the retiree reaches age 65. As of July 1,
2019, there are 176 active employees under this benefit structure.
25
CHICO STATE ENTERPRISES
Notes to the Financial Statements
Years Ended June 30, 2020 and 2019
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued
As of July 1, 2019, the date of the most recent actuarial valuation, plan participation consisted of:
Retirees and beneficiaries receiving benefits
Active employees 213
Total plan participants 216
Funding Policy
CSE has the right to establish and amend the funding policy for its OPEB plan. CSE will fund the plan monthly, on a
pay-as-you-go basis for members who meet the eligibility criteria. The contribution requirements of plan members
and CSE are established and may be amended by CSE’s Board of Directors. For the year ended June 30, 2020,
CSE contributed $17,326, which was the annual required contribution per the July 1, 2019 Actuarial Report for the
OPEB.
OPEB Liabilities, OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OEPB
CSE’s Net OPEB Liability was measured as of June 30, 2020:.CSEs’ annual OPEB cost (expense) is an amount
actuarially determined in accordance with Governmental Accounting Standards Board (GASB) Statement Number
75. The Actuarially Determined Contribution (ADC) is.an amount actuarially determined by the Actuarial Standards
of Practice and applicable Federal and State laws. The ADC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess)
over a period not to exceed thirty (30) years. The following table shows the components of CSE’s annual OPEB cost
for the year, the amount actually contributed, andthe changes in CSE’s net OPEB plan position as of June 30, 2020.
2020 2019
Service cost $ 55,357 §$ 41,923
Interest on net OPEB Obligation 23,155 18,930
Change of assumptions 151,389 31,900
Annual OPEB cost (expense) 229,901 92,753
Benefit payments (17,236) (13,776)
Net change in total OPEB liability 212,665 78,977
Net OPEB Obligation - Beginning of Year 608,733 529,756
Net OPEB Obligation - End of Year 821,398 $ 608,733
The Net OPEB liability of $821,398 is presented as a non-current liability on CSE’s Statement of Net Position.
Actual Employer Percentage Net Ending OPEB
Year Ended June 30 Annual OPEB Cost Contributions Contributed Obligation
2020 229,901 17,236 7.50% 821,398
2019 92,753 13,776 14.85% 608,733
2018 32,171 17,701 55.02% 529,756
2017 55,214. 22,967 41.60% 598,646
2016 54,096 58,427 108.01% 566,399
(NOTE: The schedule above is intended to show information for the previous ten (10) years. Since 2018 was the
first year for the presentation of this information, only data from 2016 and forward is available.)
26
CHICO STATE ENTERPRISES
Notes to the Financial Statements
Years Ended June 30, 2020 and 2019
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued
Funded Status and Funding Progress
The most recent actuarial valuation report for CSE’s OPEB plan was prepared as of July 1, 2019. As of June 30,
2020, the actuarial accrued liability for benefits was $821,398 and the fair value of other assets held at the University
Foundation was $497,695. The annual covered payroll was $11,046,092 and the ratio of the unfunded actuarial
accrued liability to covered payroll was 7.44%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about
the probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. The schedule of funding progress, presented as required
supplementary information following the notes to the financial statements, presents multi-year trend information
about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions
The total OPEB liability was determined using the following.actuarial.assumptions, applied to all periods included in
the measurement, unless otherwise specified:
Salary increases 3.00 percent
Inflation rate 3.00 percent
Healthcare costtrend rate 5.90 percent for 2020; 5.80 percent for 2021;
§.70 percent for 2022; decreasing 0.10 percent per year to 5.00 percent
for 2029 andlater years
Cap increases None
Pre-retirement mortality rates were based onthe RP-2014 Employee Mortality Table for Males or Females, as
appropriate, without projection. Post-retirement mortality rates were based on the RP-2014 Health Annuitant
Mortality Table for Males or Females, as appropriate, without projection.
Retirement and termination assumptions used were based on a review of plan experience and our best estimate of
future plan experience.
GASB 75 requires a discount rate that reflects the following:
a) The long-term expected rate of return on OPEB plan investments — to the extent that the OPEB plan’s fiduciary
net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be
invested using a strategy to achieve that return;
b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa
or higher — to the extent that the conditions in (a) are not met.
To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and
the amount of projected benefit payments is compared in each period of projected benefit payments. The discount
rate used to measure CSE’s Total OPEB liability is based on these requirements and the following information:
27
CHICO STATE ENTERPRISES
Notes to the Financial Statements
Years Ended June 30, 2020 and 2019
Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued
Long-Term
Expected Rate of Municipal Bond
Measurement Plan Investments 20-Year High
Reporting date Date (if any) Grade Rate Index Discount Rate
June 30, 2019 June 30, 2019 4.00% 3.13% 3.13%
June 30, 2020 June 30, 2020 4.00% 2.45% 2.45%
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated
using a discount rate that is 1 percentage point lower (1.45%) or 1 percentage point higher (3.45%) than the current
discount rate:
1% Decrease Discount Rate 1% Increase
1.45% (2.45%) (3.45%)
Net OPEB liability $ 933,657 $ 821,398 $ 724,937
Sensitivity of the Net OPEB Liability to Changes in the Trend Rate The following presents the net OPEB liability,
as well as what the net OPEB liability would be if.it were calculated using healthcare cost trend rates that are 1
percentage point lower (4.00%) or 1 percentage point higher.(6.00%) than the current healthcare cost trend rate of
5%:
1% Decrease Trend Rate 1% Increase
(4.90% decreasing (5.90% decreasing (6.90% decreasing
to 3.90%) to 4.90%) to 5.90%)
Net OPEB liability 769,563 $ 821,398 $ 885,005
Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al.
Butte County Superior C ourt Case No. 20C V01050
PROOF OF SERVICE
At the time of service, I was over 18 years of age and not a party to this action. My business
address is 350 University Avenue, Suite 200, Sacramento, Califomia 95825.
On the date below, I served the following document: DECLARATION OF DEREK J.
HAYNES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED
RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR
PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58
v BY MAIL: I placed the envelope for collection and mailing, following our ordinary business practices.
I am readily familiar with this business’ practice for collecting and processing correspondence for
10 mailing. On the same day that correspondence is placed for collection and mailing, it is depositedin the
ordinary course of business with the United States Postal Service, in a sealed envelope with postage
11 full id.
BY PERSONAL SERVICE: I caused such document to be personally delivered to the person(s)
12 addressed below.
BY OVERNIGHT DELIVERY: I enclosed the documents in an envelope or package provided by an
13 ovemight delivery carrier and addressed to the person(s) listed below. I placed the envelope or package
14 for collection and ovemight delivery at my office or a regularly utilized drop box of the ovemight
delive camer.
15 BY ELECTRONIC SERVICE: By e-mailing
the document(s) to the persons at the e-mail address(es)
listed. Due to a shelter-in-place order issued on account of the Covid-19 pandemic, this office will be
16 primarily working remotely, unable to send or receive physical mail as usual, and is therefore using only
electronic mail. No electronic message or other indication that the transmission was unsuccessful was
17 received within a reasonable time after the transmission.”
18
Jill P. Telfer
19 TELFER LAW
331 J Street, Suite 200
20 Sacramento, CA 95814.
21 jtelfer@telfedaw.com
jchau@telfedaw.com
22 mqguevara@telferaw.com
cmumphy@telfedaw.com
23
24 I declare under penalty of perjury under the laws of the State of Califomia
that the foregoing is
true and comect. Executed at Sacramento, Califomia on March 4, 2021.
25
Gk
Secs
26
27
28
{02375094.DOCX} 4
DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL
DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION
OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58
Preview
F Superior Court of California F PORTER | scoTtT | County of Butte | A PROFESSIONAL CORPORATION Derek J. Haynes, SBN 264621 L 3/4/2021 L Marc A. Rodriguez, SBN 329938 350 University Avenue, Suite 200 Sacramento, Califomia 95825 D Kimbéiy. Bile. lee D TEL: 916.929.1481 By __ Deputy Electronically FILED FAX: 916.927.3706 Attomeys for Defendants THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY and CHICO STATE ENTERPRISES Exengpt From Filing Fees Pursuant to Goverment Code § 6108 SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUITE 10 11 BROOKS O'BRIEN, Case No. 20CV01050 12 Plaintiff, DECLARATION OF DEREK J. HAYNES 13 IN SUPPORT OF OPPOSITION TO 14 Vv. PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE 15 THE BOARD OF TRUSTEES OF THE ENTERPRISES TO PROVIDE FURTHER CALIFORNIA STATE UNIVERSITY, VERIFIED RESPONSES AND 16 CHICO STATE ENTERPRISES, and PRODUCTION OF DOCUMENTS TO 17 DOES 1 through 10, inclusive. PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, 18 Defendants. NOS. 50 AND 58 19 Date: March 17, 2021 20 Time: 9:00am. Dept:6 21 22 Complaint Filed: 05/20/20 23 24 I, DerekJ. Haynes, declare: 25 1 I am an attomey duly licensed to practice before all of the courts of the State of 26 Califomia and am a shareholder with the law firm of Porter Scott, attomeys of record for Defendants 27 THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY and CHICO STATE 28 ENTERPRISES. {02375094.DOCX} 1 DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58 2. Plaintiff filed her initial complaint on May 20, 2020 which she then amended on January 5, 2021. The operative complaint alleges four causes of action: (1) Disability Discrimination under the FEHA, (2) Age Discrimination under the FEHA, (3) Retaliation under the CFRA and (4) Failure to prevent Discrimination under Govemment Code section 12940(k). 3, On October 19, 2020, Plaintiff served a third set of document requests on Defendant Chico State Enterprises (“Defendant”) where among other things, Defendant asked for (1) written summaries of personnel changes resulting from the reorganization and (2) documents evidencing the balance and any transfers from CSE’s post-retirement benefit fund. Defendant served its responses on November 25, 2020, stating that it would comply with Request No. 50 to the extent that it could locate 10 any documents responsive to the request. But Defendant objected to Request No. 58 on the grounds that 11 the request was ambiguous because there is no Post-Retirement Benefit Fund from which Defendant 12 pays out medical benefits. 13 4. Plaintiff sent a meet and confer letter on January 7, 2021, demanding Defendant amend. 14 its responses to request Nos. 50 and 58. As for request No. 50, Defendant responded, stating it could not 15 locate any responsive documents. Defendant also provided Plaintiff with a verified amended response to 16 request No. 50, stating that aftera diligent search and reasonable inquiry, Defendant could not comply 17 with the request because the documents had been lost. A true and correct copy of Defendant's further 18 amended response to request for production of documents, set three, is attached hereto as ExhibitA. 19 5, As for request No. 58, Defendant explained that Plaintiff's request was ambiguous 20 because it does not maintain a separate account to pay out post-retirement health benefits and was 21 therefore unable to amend its response. Defendant has explained this to Plaintiff many times. 22 6. Additionally, Defendant produced the actuarial valuation report for its post-retirement 23 health benefits plan for 2017, 2018, and 2019 in response to Plaintiff’s Request for Production of 24 Documents, set two. A true and correct copy of the report is attached hereto as Exhibit B. 25 I make this Declaration on my own personal knowledge except to the facts stated on information 26 and belief. As to such facts, I believe them to be true. If called upon to do so, I could and would 27 competently testify about the matters asserted herein. 28 {02375094.DOCX} 2 DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58 I declare under the penalty of perjury under the laws of the State of Califomia that the foregoing is true and correct and that this declaration was executed on this 4 day of March, 2021 at Sacramento, Califomia. TSA Derek J. Haynes 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 {02375094.DOCX} 3 DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58 Exhibit A PORTER | scoTtT A PROFESSIONAL CORPORATION DerekJ. Haynes, SBN 264621 Marc A. Rodriguez, SBN 329938 350 University Avenue, Suite 200 Sacramento, Califomia 95825 TEL: 916.929.1481 FAX: 916.927.3706 Attomeys for Defendants THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY and CHICO STATE ENTERPRISES Exempt From Filing Fees Pursuant to Government Code § 6108 SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUTTE 10 11 BROOKS O'BRIEN, Case No. 20CV01050 12 Plaintiff, DEFENDANT CHICO STATE 13 ENTERPRISES’ FURTHER AMENDED 14 Vv. RESPONSE TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET 15 THE BOARD OF TRUSTEES OF THE THREE CALIFORNIA STATE UNIVERSITY, CHICO 16 STATE ENTERPRISES, and DOES 1 through 17 10, inclusive. 18 Defendants. Complaint Filed: 05/20/20 19 20 21 PROPOUNDING PARTY: Plaintiff BROOKS O’ BRIEN 22 RESPONDING PARTY: — Defendant CHICO STATE ENTERPRISES 23 SET NUMBER: Three 24 25 Pursuant to Code of Civil Procedure § 2031.210, et seq., Defendant amends its response to 26 Plaintiff’s Request for Production of Documents, Set Three, as follows: 27 //1 28 //1 {02380601.DOCX} 1 DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR, PRODUCTION OF DOCUMENTS, SET THREE PRELIMINARY STATEMENT In responding to this Request for Production of Documents, responding party has not completed. its investigation of all facts of this case, or discovery in this matter, and has not completed its preparation for trial. Accordingly, the following responses are provided without prejudice to responding party’s right to introduce at trial any evidence that is subsequently discovered relating to proof of presently known facts and to produce and introduce all evidence whenever discovered relating to the proof of subsequently discovered material facts. Moreover, facts, documents, and things now known may be imperfectly understood and accordingly, such facts, documents, and things may not be included in the following responses. 10 Responding party reserves the right to refer to, conduct discovery with reference to, or offer into 11 evidence at the time of trial any and all facts, documents, and things which it does not presently recall 12 but may recall at some time in the future, notwithstanding the initial responses provided herein. 13 Responding party further reserves the right to raise all appropriate objections with reference to the 14 admissibility of any response or document at the time of trial, even though it may not be specifically 15 objected to in these responses during discovery. 16 Responding party objects to propounding party’s requests insofar as they seek information that is 17 protected from disclosure by the attomey-client privilege, the work product doctrine, and any other 18 applicable privilege. To the extent that responding party inadvertently discloses information that is 19 protected under any applicable privilege, such inadvertent disclosure does not constitute a waiver of 20 such privilege. 21 Responding party further objects to propounding party's requests insofar as they seek 22 information conceming matters unrelated to the subject matter of the lawsuit, on the grounds that such 23 requests are overbroad, unduly burdensome, and seek information that is neither relevant to the subject 24 matter of this action nor reasonably calculated to lead to the discovery of admissible evidence. 25 These general objections are applicable to each and every one of the following responses and 26 objections, and failure to repeat an objection in response to a specific request shall not be deemed waiver 27 of the objection. Further, when responding party specifically repeats one or more of these general 28 objections in response to a specific request, such specific response cannot be a waiver of these general {02380601.DOCX} 2 DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR, PRODUCTION OF DOCUMENTS, SET THREE objections. Defendant responds as follows to Plaintiff's Request for Production of Documents, Set Three, in accordance with Defendant’ s understanding of the fair meaning of those requests. RESPONSE TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET THREE REQUEST FOR PRODUCTION NO. 50: Please produce any and all written summaries of any and all personnel changes as a result of the CSE Reorganization written by interim CEO David Hassenzahl referenced in the September 13, 2019 Finance and Investment Committee minutes marked as Deposition Exhibit 14. RESPONSE TO REQUEST FOR PRODUCTION NO. 50: 10 Objection. This request is overbroad to the extent it calls for information outside of Plaintiff's 11 department. This request also calls for information not reasonably calculated to lead to the discovery of 12 admissible evidence. Subject to the foregoing objections, Defendant responds as follows: 13 Defendant will comply with the request and produce all responsive documents within its 14 possession, custody, or control, to the extent any exist. 15 AMENDED RESPONSE TO REQUEST FOR PRODUCTION NO. 50: 16 Objection. This request is overbroad to the extent it calls for information outside of Plaintiff's 17 department. This request also calls for information not reasonably calculated to lead to the discovery of 18 admissible evidence. Subject to the foregoing objections, Defendant responds as follows: 19 After a diligent search and reasonable inquiry, Defendant is unable to comply with this request 20 because the requested documents have been lost. 21 Dated: March 3, 2021 PORTER SCOTT 22 A PROFESSIONAL CORPORATION 23 24 By | D4 DerekJ. Haynes 25 Marc A. Rodriguez 26 Attomeys for Defendants 27 28 {02380601.DOCX} 3 DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR, PRODUCTION OF DOCUMENTS, SET THREE Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al. Butte C ounty Superior C ourt Case No. 20C V01050 VERIFICATION BY REPRESENTATIVE The undersigned hereby asserts as follows: I am a representative in the above-entitled proceeding. The matters contained in DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET THREE, are true of my own knowledge, except as to the matters therein stated on information and belief, and as to those matters I believe them to be true. 10 I declare under penalty of perjury under the laws of the State of Califomia that the 11 foregoing is true and correct. 12 Executed on March 3rd, 2021, at Chico, Califomia. 13 Au Aa 14 Russel] Wittmeier at gs 15 Human Resources/Payroll Director oS aS Chico State Enterprises aa 16 Ok 17 18 19 20 21 22 23 24 25 26 27 28 VERIFICATION {02380638.DOCX} Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al. Butte C ounty Superior Court Case No. 20CV01050 PROOF OF SERVICE At the time of service, I was over 18 years of age and not a party to this action. My business address is 350 University Avenue, Suite 200, Sacramento, Califomia 95825. On the date below, I served the folwi document: DEFENDANT CHICO STATEMENT ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET THREE v BY MAIL: I placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business’ practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is depositedin the ordinary course of business with the United States Postal Service, in a sealed envelope with postage 10 fully prepaid. BY PERSONAL SERVICE: I caused such document to be personally delivered to the person(s) 11 addressed below. BY OVERNIGHT DELIVERY: I enclosed the documents in an envelope or package provided by an 12 ovemight delivery carrier and addressed to the person(s) listed below. I placed the envelope or package for collection and ovemight delivery at my office or a regularly utilized drop box of the ovemight 13 delivery carrier. BY FAX TRANSMISSION: Based on an agreement of the parties to accept service by fax 14 transmission, I faxed the documents to the persons at the fax numbers listed below. No error was 15 reported by the fax machine that I used. A copy of the record of the fax transmission, which I printed out, is attached 16 BY ELECTRONIC SERVICE: By e-mailing the document(s) to the persons at the e-mail address(es) listed. Due to a shelter-in-place order issued on account of the Covid-19 pandemic, this office will be 17 primarily working remotely, unable to send or receive physical mail as usual, and is therefore using only 18 electronic mail. No electronic message or other indication that the transmission was unsuccessful was received within a reasonable time after the transmission.” 19 Jill P. Telfer 20 TELFER LAW 21 331 J Street, Suite 200 Sacramento, CA 95814. 22 jtelfer@telfedaw.com jchau@telfedaw.com 23 mqguevara@telferlaw.com 24 coumphy@telfedaw.com 25 I declare under penalty of perjury under the laws of the State of Califomia that the foregoing is true and correct. Executed at Sacramento, Califomia on March 3, 20201. 26 27 28 {02380601.DOCX} 4 DEFENDANT CHICO STATE ENTERPRISES’ FURTHER AMENDED RESPONSE TO REQUEST FOR, PRODUCTION OF DOCUMENTS, SET THREE Exhibit B Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB) Plan Description CSE administers an endowment-funded single-employer defined benefit healthcare plan. CSE currently provides retiree health benefits to eligible employees to the extent sustainable by the provided endowment and can be terminated at any time. The postretirement health care plan is contributory with retiree contributions adjusted annually. Separate stand-alone financial statements for the plan are not prepared. Eligi ity and Benefits Tier 1: Employees hired before January 1, 2006 who have attained age 55 and have completed 15 years of credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400 for those with dual or family coverage. Benefits are paid for the lifetime of the retiree. As of July 1, 2017, there are 45 active employees and 2 retirees under this benefit structure. CHICO STATE ENTERPRISES (Formerly The CSU, Chico Research Foundation) Notes to the Financial Statements Years Ended June 30, 2019 and 2018, as Restated Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued Tier 2: Employees hired on or after January 1, 2006 who have attained age 60 and have completed 15 years of credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400 for those with dual or family coverage. Benefits are paid until the retiree reaches age 65. As of July 1, 2017, there are 136 active employees under this benefit structure. As of July 1, 2017, the date of the most recent actuarial valuation, plan participation consisted of: Retirees and beneficiaries receiving benefits 2 Active employees 181 Total plan participants 183 Funding Policy CSE has the right to establish and amend the funding policy fori EB pl ‘SE will fund the plan monthly, on a pay-as-you-go basis for members who meet the eligibility crit The contrib! requirements of plan members and CSE are established and may be amended by CSE’s rd of, rectors. the year ended June 30, 2019, CSE contributed $13,776, which was the annual required ibi per the July 1, 2017 Actuarial Report for the OPEB. OPEB Liabilities, OPEB Expense and Deferred of Ri ices and Deferred Inflows of Resources Related to OEPB CSE’s Net OPEB Liability was measured a: of June 19 ‘s’ annual OPEB cost (expense) is an amount actuarially determined in accordance wit ent counting Standards Board (GASB) Statement Number 75. The Actuarially Determined Contrib )isa jount actuarially determined by the Actuarial Standards of Practice and applicable Federal a he A represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost ear anda ortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thi eal The following table shows the components of CSE’s annual OPEB cost for the year, the amount act ted, the changes in CSE’s net OPEB plan position as of June 30, 2019. 2019 2018 Service cost 41,923 $ 44,538 Interest on net OPEB Obligation 18,930 15,854 Change of assumptions 31,900 (28,221) Annual OPEB cost (expense) 92,753 32,171 Benefit payments (13,776) (17,701) Net change in total OPEB liability 78,977 14,470 Net OPEB Obligation - Beginning of Year 529,756 515,286 Net OPEB Obligation - End of Year 608,733 $ 529,756 16 CHICO STATE ENTERPRISES (Formerly The CSU, Chico Research Foundation) Notes to the Financial Statements Years Ended June 30, 2019 and 2018, as Restated Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued The Net OPEB liability of $608,733 is presented as a non-current liability on CSE’s statement of net position. Actual Employer Percentage Net Ending OPEB Years Ended June 30 Annual OPEB Cost Contributions Contributed Obligation 2019 $ 92,753 $ 13,776 14.85% $ 608,733 2018 $ 32,171 $ 17,701 55.02% 529,756 2017 $ 55,214 $ 22,967 41.60% 598,646 2016 $ 54,096 $ 58,427 108.01% 566,399 (NOTE: The schedule above is intended to show information for the pr s ten (10) years. Since 2018 was the first year for the presentation of this information, only data from 2016 forward is available.) Funded Status and Funding Progress The most recent actuarial valuation report for CSE’s OPEB pl as prepare of July 1, 2017. As of June 30, 2019, the actuarial accrued liability for benefits was $608,73; id the ir value 0} er assets held at the University Foundation was $515,421. The annual covered payroll $8,6, 12 and the ratio of the unfunded actuarial accrued liability to covered payroll was 7%. Actuarial valuations of an ongoing plan involve esti of the v: of reported amounts and assumptions about the probability of occurrence of events far into the fu' lude assumptions about future employment, mortality, and healthcare cost trend. Amounts deter gard ig the funded status of the plan and the annual required contributions of the employer ar t to inual revision as actual results are compared with past expectations and new estimates are ma about, ie futu The schedule of funding progress, presented as required supplementary information following. e notes he fi cial statements, presents multi-year trend information about whether the actuarial value of pla Ing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and mptions The total OPEB liability wa etermined U ing the following actuarial assumptions, applied to all periods included in the measurement, unless ot! ise speg ed: Salary increases 3.00 percent Healthcare cost trend rate 5.00 percent for 2018; 5.00 percent for 2019; and5.00 percent for 2020 and later years Cap increases None Pre-retirement mortality rates were based on the RP-2014 Employee Mortality Table for Males or Females, as appropriate, without projection. Post-retirement mortality rates were based on the RP-2014 Health Annuitant Mortality Table for Males or Females, as appropriate, without projection. Retirement and termination assumptions used were based on a review of plan experience and our best estimate of future plan experience. GASB 75 requires a discount rate that reflects the following: a) The long-term expected rate of return on OPEB plan investments — to the extent that the OPEB plan’s fiduciary net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return; 17 CHICO STATE ENTERPRISES arch Foundation) Notes to the Financial Statements Years Ended June 30, 2019 and 2018, as Restated Note 11 —- Postemployment Benefits Other Than Pension Benefits (OPEB), continued b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher— to the extent that the conditions in (a) are not met. To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and the amount of projected benefit payments is compared in each period of projected benefit payments. The discount rate used to measure CSE’s Total OPEB liability is based on these requirements and the following information: Sensitivity of the Net OPEB Liability to Changes in the ount, ite The following presents the net OPEB liability, as well as OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.13%) ercentage point higher (4.13%) than the current discount rate: 1% Discount Rate 1% Increase (3.13%) (4.13%) Net OPEB liability 80,391 608,733 $ 545,694 Sensitivity of the Net OPEB Lia! lit Trend Rate The following presents the net OPEB liability, as well as what the net OPEB liability be if it were calculated using healthcare cost trend rates that are 1 percentage point lower (4.00%) or 1 percent point higher (6.00%) than the current healthcare cost trend rate of 5%: Net OPEB liability 602,362 $ 608,733 $ 613,161 18 Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB) Plan Description CSE administers an endowment-funded single-employer defined benefit healthcare plan. CSE currently provides retiree health benefits to eligible employees to the extent sustainable by the provided endowment and can be terminated at any time. The postretirement health care plan is contributory with retiree contributions adjusted annually. Separate stand-alone financial statements for the plan are not prepared. Eligibility and Benefits Tier 1: Employees hired before January 1, 2006 who have attained age 55 and have completed 15 years of credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400 for those with dual or family coverage. Benefits are paid for the lifetime of the retiree. As of July 1, 2019, there are 37 active employees and 3 retirees under this benefit structure. Tier 2: Employees hired on or after January 1, 2006 who have attained age 60 and have completed 15 years of credited CSE service will be eligible to receive a CSE-paid medical plan contribution upon retirement. Eligibility is lost for breaks in service that exceed one year. CSE will pay up to $200 per month for those with single coverage and $400 for those with dual or family coverage. Benefits are paid until the retiree reaches age 65. As of July 1, 2019, there are 176 active employees under this benefit structure. 25 CHICO STATE ENTERPRISES Notes to the Financial Statements Years Ended June 30, 2020 and 2019 Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued As of July 1, 2019, the date of the most recent actuarial valuation, plan participation consisted of: Retirees and beneficiaries receiving benefits Active employees 213 Total plan participants 216 Funding Policy CSE has the right to establish and amend the funding policy for its OPEB plan. CSE will fund the plan monthly, on a pay-as-you-go basis for members who meet the eligibility criteria. The contribution requirements of plan members and CSE are established and may be amended by CSE’s Board of Directors. For the year ended June 30, 2020, CSE contributed $17,326, which was the annual required contribution per the July 1, 2019 Actuarial Report for the OPEB. OPEB Liabilities, OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OEPB CSE’s Net OPEB Liability was measured as of June 30, 2020:.CSEs’ annual OPEB cost (expense) is an amount actuarially determined in accordance with Governmental Accounting Standards Board (GASB) Statement Number 75. The Actuarially Determined Contribution (ADC) is.an amount actuarially determined by the Actuarial Standards of Practice and applicable Federal and State laws. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty (30) years. The following table shows the components of CSE’s annual OPEB cost for the year, the amount actually contributed, andthe changes in CSE’s net OPEB plan position as of June 30, 2020. 2020 2019 Service cost $ 55,357 §$ 41,923 Interest on net OPEB Obligation 23,155 18,930 Change of assumptions 151,389 31,900 Annual OPEB cost (expense) 229,901 92,753 Benefit payments (17,236) (13,776) Net change in total OPEB liability 212,665 78,977 Net OPEB Obligation - Beginning of Year 608,733 529,756 Net OPEB Obligation - End of Year 821,398 $ 608,733 The Net OPEB liability of $821,398 is presented as a non-current liability on CSE’s Statement of Net Position. Actual Employer Percentage Net Ending OPEB Year Ended June 30 Annual OPEB Cost Contributions Contributed Obligation 2020 229,901 17,236 7.50% 821,398 2019 92,753 13,776 14.85% 608,733 2018 32,171 17,701 55.02% 529,756 2017 55,214. 22,967 41.60% 598,646 2016 54,096 58,427 108.01% 566,399 (NOTE: The schedule above is intended to show information for the previous ten (10) years. Since 2018 was the first year for the presentation of this information, only data from 2016 and forward is available.) 26 CHICO STATE ENTERPRISES Notes to the Financial Statements Years Ended June 30, 2020 and 2019 Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued Funded Status and Funding Progress The most recent actuarial valuation report for CSE’s OPEB plan was prepared as of July 1, 2019. As of June 30, 2020, the actuarial accrued liability for benefits was $821,398 and the fair value of other assets held at the University Foundation was $497,695. The annual covered payroll was $11,046,092 and the ratio of the unfunded actuarial accrued liability to covered payroll was 7.44%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions The total OPEB liability was determined using the following.actuarial.assumptions, applied to all periods included in the measurement, unless otherwise specified: Salary increases 3.00 percent Inflation rate 3.00 percent Healthcare costtrend rate 5.90 percent for 2020; 5.80 percent for 2021; §.70 percent for 2022; decreasing 0.10 percent per year to 5.00 percent for 2029 andlater years Cap increases None Pre-retirement mortality rates were based onthe RP-2014 Employee Mortality Table for Males or Females, as appropriate, without projection. Post-retirement mortality rates were based on the RP-2014 Health Annuitant Mortality Table for Males or Females, as appropriate, without projection. Retirement and termination assumptions used were based on a review of plan experience and our best estimate of future plan experience. GASB 75 requires a discount rate that reflects the following: a) The long-term expected rate of return on OPEB plan investments — to the extent that the OPEB plan’s fiduciary net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return; b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher — to the extent that the conditions in (a) are not met. To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and the amount of projected benefit payments is compared in each period of projected benefit payments. The discount rate used to measure CSE’s Total OPEB liability is based on these requirements and the following information: 27 CHICO STATE ENTERPRISES Notes to the Financial Statements Years Ended June 30, 2020 and 2019 Note 11 — Postemployment Benefits Other Than Pension Benefits (OPEB), continued Long-Term Expected Rate of Municipal Bond Measurement Plan Investments 20-Year High Reporting date Date (if any) Grade Rate Index Discount Rate June 30, 2019 June 30, 2019 4.00% 3.13% 3.13% June 30, 2020 June 30, 2020 4.00% 2.45% 2.45% Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (1.45%) or 1 percentage point higher (3.45%) than the current discount rate: 1% Decrease Discount Rate 1% Increase 1.45% (2.45%) (3.45%) Net OPEB liability $ 933,657 $ 821,398 $ 724,937 Sensitivity of the Net OPEB Liability to Changes in the Trend Rate The following presents the net OPEB liability, as well as what the net OPEB liability would be if.it were calculated using healthcare cost trend rates that are 1 percentage point lower (4.00%) or 1 percentage point higher.(6.00%) than the current healthcare cost trend rate of 5%: 1% Decrease Trend Rate 1% Increase (4.90% decreasing (5.90% decreasing (6.90% decreasing to 3.90%) to 4.90%) to 5.90%) Net OPEB liability 769,563 $ 821,398 $ 885,005 Brooks O’Brien v. The Board of Trustees of the Califomia State University, et al. Butte County Superior C ourt Case No. 20C V01050 PROOF OF SERVICE At the time of service, I was over 18 years of age and not a party to this action. My business address is 350 University Avenue, Suite 200, Sacramento, Califomia 95825. On the date below, I served the following document: DECLARATION OF DEREK J. HAYNES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58 v BY MAIL: I placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business’ practice for collecting and processing correspondence for 10 mailing. On the same day that correspondence is placed for collection and mailing, it is depositedin the ordinary course of business with the United States Postal Service, in a sealed envelope with postage 11 full id. BY PERSONAL SERVICE: I caused such document to be personally delivered to the person(s) 12 addressed below. BY OVERNIGHT DELIVERY: I enclosed the documents in an envelope or package provided by an 13 ovemight delivery carrier and addressed to the person(s) listed below. I placed the envelope or package 14 for collection and ovemight delivery at my office or a regularly utilized drop box of the ovemight delive camer. 15 BY ELECTRONIC SERVICE: By e-mailing the document(s) to the persons at the e-mail address(es) listed. Due to a shelter-in-place order issued on account of the Covid-19 pandemic, this office will be 16 primarily working remotely, unable to send or receive physical mail as usual, and is therefore using only electronic mail. No electronic message or other indication that the transmission was unsuccessful was 17 received within a reasonable time after the transmission.” 18 Jill P. Telfer 19 TELFER LAW 331 J Street, Suite 200 20 Sacramento, CA 95814. 21 jtelfer@telfedaw.com jchau@telfedaw.com 22 mqguevara@telferaw.com cmumphy@telfedaw.com 23 24 I declare under penalty of perjury under the laws of the State of Califomia that the foregoing is true and comect. Executed at Sacramento, Califomia on March 4, 2021. 25 Gk Secs 26 27 28 {02375094.DOCX} 4 DECLARATION OF DEREK J. HAY NES IN SUPPORT OF OPPOSITION TO PLAINTIFF'S MOTION TO COMPEL DEFENDANT CHICO STATE ENTERPRISES TO PROVIDE FURTHER VERIFIED RESPONSES AND PRODUCTION OF DOCUMENTS TO PLAINTIFF'S REQUEST FOR PRODUCTION OF DOCUMENTS, SET 3, NOS. 50 AND 58