Title
Staff Report for Resolution Authorizing the Sale of Pension Obligation Bonds to Refinance Outstanding Side Fund Obligations of the City to the California Public Employees’ Retirement System (CalPERS), Approving the Final Form of Related Financing Documents, and Approving Official Actions (authorizes the sale of bonds to pay off the side fund debt to CalPERS and create new debt at a lower interest rate)
Staffreport
RECOMMENDATION
Staff recommends City Council approval of the resolution authorizing issuance of pension obligation bonds, approving the final form of the related financing documents, and approving official actions to refinance the outstanding Public Safety side fund obligation of the City. The bond transaction would refinance the existing CalPERS side fund obligation over the same term in the same total amount, plus issuance costs (less $6,000,000 to be borrowed from the Water Pollution Plant Fund for the initial pay-down of the side fund obligation) and take advantage of lower bond interest rates. Financing documents include the Indenture of Trust between the City and U.S. Bank National Association, Bond Purchase Agreement, and the Official Statement and Continuing Disclosure Certificate.
BACKGROUND
The City’s Safety Plan in the CalPERS retirement system is a cost-sharing multiple-employer plan with pooling (cost-sharing) arrangements for participating employers. All risks, rewards, and costs, including benefit costs, are shared and are not attributable to the individual employers. A single valuation covers plan members and the same contribution rate applies to all employers. A menu of benefit provisions and other requirements are established by state statute within the Public Employees’ Retirement Law. The City has contractually selected optional benefit provisions from the benefit menu and adopted these benefits by City Council resolution.
At the time the City was required to join the Safety Risk Pool in 2004, a side fund was crea...
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