REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Dahle Bulosan, Interim Chief Financial Officer
Subject:
title
Adopt City Council Resolution No. 2019-89 Providing for the Possible Issuance of One or More Series of City of Huntington Beach Taxable Pension Obligation Bonds and Authorizing a Trust Agreement, A Validation Action and Other Matters Relating Thereto
body
Statement of Issue:
It is requested that the City Council adopt a resolution authorizing the possible issuance of taxable Pension Obligation Bonds ("POBs") to refund all or a portion of its California Public Employees' Retirement System ("CalPERS") Unfunded Accrued Liability ("UAL"), and authorizing a judicial validation proceedings related to the issuance of the POBs.
Financial Impact:
The issuance of pension obligation bonds for the refinancing of certain pension obligations of the City of Huntington Beach will likely reduce the annual costs related to the UAL the City currently is obligated to pay CalPERS. As of June 30, 2018, the most current actuarial valuation available from CalPERS, the City's UAL for all citywide employees and retirees is approximately $436.2 million. Approximately 62% of the UAL is related to public safety (police and fire) employees, and 38% is related to non-safety employees.
Currently, annual UAL payments to CalPERS will range from approximately $32.5 million for the 2020 21 fiscal year, up to approximately $46 million in the peak year of 2030-31. It is highly likely that the increase will impact the ability of the City Council to adopt future balanced budgets. It may also impact the high level of services currently provided to Huntington Beach's residents and businesses.
The issuance of pension obligation bonds will allow the City of Huntington Beach to prepay up to 100% of the projected UAL, based on the most recent valuation report recently released by CalPERS. By issu...
Click here for full text