Report to Mayor and City Council
Tuesday, January 14, 2020
Discussion
SUBJECT:
Title
APPROVAL OF RESOLUTION NO 20-015 OF THE CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA, AUTHORIZING THE ISSUANCE OF BONDS TO REFUND CERTAIN PENSION OBLIGATIONS OF THE CITY OF CARSON, APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A TRUST AGREEMENT AND BOND PURCHASE AGREEMENT, AUTHORIZING JUDICIAL VALIDATION PROCEEDINGS RELATING TO THE ISSUANCE OF SUCH BONDS AND APPROVING ADDITIONAL ACTIONS RELATED THERETO (CITY COUNCIL)
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I. SUMMARY
At the November 26, 2019 City Council workshop, the City Council directed staff to prepare documents required to begin the process to issue Pension Obligation 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, with an estimated cost savings up to $45 million over 24 years.
II. RECOMMENDATION
Recommendation
1. Approve the resolution (1) approving the form of a Trust Agreement and a Bond Purchase Agreement, (b) authorizing the issuance of the bonds in an amount not to exceed $115 million, (c) authorizing the filing of a judicial validation action with the Los Angeles County Superior Court and (d) approving execution of related consulting contracts.
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III. ALTERNATIVES
Take another action deemed appropriate by City Council
IV. BACKGROUND
At the November 5, 2019 Council Meeting, the City Council created an Ad Hoc Committee to review cost effective pension liability funding opportunities. A presentation regarding pension liability funding was made at the November 19, 2019 City Council meeting. At that time, the City Council gave direction to conduct a public workshop on Pension Obligation Bonds (POBs). At the workshop, information was presented regarding POB issuance and potential financial benefits to the City from the issuance of POB. Based on the analysis, the cost to fund the existing UAL ...
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