Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 62 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 - 62 - Based on the actuarial valuation date of January 1, 2014, the City’s annual cost for fiscal years ended December 31, 2016 and 2015, the amount of expected contribution to the plan, and changes in net obligation are as follows: ($ in millions) 2016 2015 Annual required contribution 7.7 $ 4.6 $ Interest on net OPEB obligation 1.5 1.6 Adjustment to annual required contribution (2.5) (2.5) Annual OPEB cost (expense) 6.7 3.7 Expected contribution (employer-paid benefits) (2.0) (1.1) Increase in net OPEB obligation 4.7 2.6 Net OPEB obligation - beginning of the year 49.4 46.8 Net OPEB obligation - end of year 54.1 $ 49.4 $ * Estimated using growth rate of 2014-2015 from 2015 actuarial report The schedules of funding progress ($ in millions) (unaudited) are as follows: Actuarial Accrued UAAL as a Actuarial Actuarial Liabilities Unfunded Percentage Valuation Value of (AAL) AAL Funding Covered of Covered Date Assets Entry Age (UAAL) Ratio Payroll Payroll January 1 (A) (B) (B-A) (A/B) (C) ((B-A)/C) 2012 - $ 74.7 $ 74.7 $ - % 891.6 $ 8.4 % 2014 - 41.8 41.8 - 1,004.0 4.2 2016 - 65.7 65.7 - 1,125.7 5.8 The Health Care Subfund of the General Fund is reported in The City of Seattle’s Comprehensive Annual Financial Report. 14. ENVIRONMENTAL LIABILITIES Environmental liabilities were $86.7 million and $45.9 million, at December 31, 2016, and 2015, respectively. The following is a brief description of the significant Superfund sites: ● The Harbor Island Superfund Site—In 1983, the U.S. Environmental Protection Agency (EPA) designated this site as a federal Superfund site. The Department and other entities are sharing costs equally for investigating contamination in the East Waterway alongside Harbor Island. The City share is split between City Light 45% and Seattle Public Utilities (SPU) 55%. The Department’s involvement stems from its sale of transformers to a company on Harbor Island. The City of Seattle is one of four parties who are conducting a remedial investigation and feasibility study that will delineate cleanup actions. A draft final feasibility study was submitted to EPA in October 2016. Nine alternative actions were presented with costs ranging from $256.0 million to $411.0 million with an estimated time to complete construction on active cleanup components ranging from 9 to 13 years. EPA however, has not identified the cleanup construction timing and cost estimate at this time. The project