Report to Mayor and City Council
Tuesday, May 19, 2020
Discussion
SUBJECT:
Title
APPROVAL OF RESOLUTION NO 20-082 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA, APPROVING THE FORM OF PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE ISSUANCE OF THE CITY OF CARSON 2020 TAXABLE PENSION OBLIGATION BONDS AND APPROVING ADDITIONAL ACTIONS RELATED THERETO (CITY COUNCIL)
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I. SUMMARY
In January 2020, the City Council authorized the issuance of Pension Obligation Bonds (Bonds) to pay the unfunded actuarial liability (UAL) in the City's pension plan with the California Public Employees Retirement System (PERS) for the Miscellaneous employees' plan. At the same time, the City Council authorized the filing of a judicial validation action with the Los Angeles County Superior Court relating to the Pension Obligation Bonds.
The validation action is complete and the Bonds can now be issued. Approval of the Official Statement to be used in connection with the marketing of the Bonds is the final authorization needed to issue the Bonds.
II. RECOMMENDATION
Recommendation
1. Approve the resolution approving the form of a Preliminary Official Statement and the form of a Continuing Disclosure Certificate in connection with the issuance of the Bonds.
1.
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III. ALTERNATIVES
Take another action deemed appropriate by City Council.
IV. BACKGROUND
In January 2020, the City Council authorized the issuance of the Bonds to prepay the outstanding unfunded liability (UAL) for the PERS plan for its general employees. As of June 30, 2018, the most recent PERS valuation date, the plan was 64.8% funded, with a net liability of approximately $107 million expected as of June 30, 2020.
In January, the estimated budget relief expected from issuance of the Bonds was approximately $45 million over 24 years. This was the difference between what would be required to be paid to PERS compared to the debt service on the Bonds. Those savings were based on...
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