2020-12-01 CC Agenda Packet - ITEM #G6 PRESENTATION - Ad-Hoc Pension CommitteeCity of EI Segundo
Ad-hoc Pension Committee Presentation
N DAJA
Background on Ad-hoc Pension Committee
r Defined Benefit Retirement Pension Plan
? Unfunded Actuarial Liability (UAL)
4. Tools to Reduce the City's UAL
5. How do POBs Work?
6. The City's Funded and Unfunded Pension Status
7 Use of Pension Obligation Bonds to Reduce City's
Recurring Costs
8. Next Steps
On July 22, 2020 City Council appointed Mayor Pro Tem Chris
Pimentel and Councilmember Scot Nicol to serve on the Ad Hoc
Pension Committee to review the City's pension obligations.
The committee has met four times:
September 21
October 14
November 16
November 23
Committee's work to date has focused on issuing Pension
Obligation Bonds (POBs) as a mechanism to significantly reduce
the City's recurring pension costs, saving approximately $55
million (present value) over the next twenty years.
The Committee is also looking into conducting a review of the
City's ability to exit CalPERS pension system and use of
alternative retirement options.
The Committee has also done a cursory review of the funding
status of the City's Other Post -Employment Benefits (OPEB) —
retiree medical insurance
wr sionIPIar'
j
The City provides retirement benefits for full-time employees by
contracting with CalPERS
CalPERS offers a defined benefit plan where retirement benefits
are based on a formula which takes into consideration employee
years of service, age at retirement, and final compensation
CalPERS Retirement benefits are funded by contributions from
employees, the City, as well as investment earnings
When investment earnings do not meet expectations, the
funded status of the entire retirement system is at risk with all
member agencies sharing the burden
UAL is Pension Debt the City owes to CalPERS on behalf of existing
retirees and active employees
CalPERS assesses the City an interest rate of 7.0% on the UAL
Employers have the responsibility to pay down their UAL by
increasing contributions to CalPERS
The total UAL owed by the City of EI Segundo is $151.3 million
The remaining UAL amortization period for the City is twenty years
By maintaining the status quo UAL with CalPERS, the City will pay a
total of $130 million in interest to CalPERS
Date
Valuation as of
Plan
Aug -20
6/30/2019
Police 1st Tier
Aug -20
6/30/2019
Fire
Aug -20
6/30/2019
Miscellaneous
Required
Contribution In
Balance
Payment
Balance
Payment
Balance
6/30/2022
61, 677, 695
4,699,976
55, 577, 658
4,236,021
34, 407, 895
6/30/2023
61,133, 440
4,839,052
55, 086, 320
4,360,965
34, 094, 729
6/30/2024
60, 407, 227
4,981,619
54, 431, 345
4,489,059
33, 621, 499
6/30/2025
59, 482, 706
5,127, 775
53, 598, 021
4,620,388
32, 972, 055
6/30/2026
58, 342, 284
5,277,617
52, 570, 516
4,755,042
32,118, 348
6/30/2027
56, 967, 035
5,419,157
51, 331, 798
4,882,674
31,108, 246
6/30/2028
55, 349,108
5,564,589
49, 874, 347
5,013,816
29, 939, 362
6/30/2029
53, 467, 490
5,714,022
48,179, 219
5,148, 564
28, 598,159
6/30/2030
51, 299, 585
5,867,561
46, 226, 049
5,287,018
27, 070, 086
6/30/2031
48, 821,104
6,025,326
43, 992, 939
5,429,280
25, 339, 506
6/30/2032
46, 005, 936
6,187, 427
41, 456, 354
5,575,454
23, 389, 612
6/30/2033
42, 826, 028
6,353,987
38, 591, 004
5,725,647
21, 202, 357
6/30/2034
39, 251, 235
6,525,126
35, 369, 720
5,879,971
18, 758, 347
6/30/2035
35, 249,179
6,700,972
31, 763, 311
6,038,538
16, 036, 764
6/30/2036
30, 785, 082
6,881,657
27, 740, 431
6,201,468
13, 015, 246
6/30/2037
25, 821, 597
7,067,306
23, 267, 413
6,368,876
9,738,765
6/30/2038
20, 318, 631
7,258,064
18, 308,115
6,540,889
6,335,311
6/30/2039
14, 233,135
7,454,064
12, 823, 734
6,717,630
2,804,752
6/30/2040
7,518,911
7,655,457
6,772,625
6,899,234
6/30/2041
126,368
130,716
110,086
113,874
TOTAL
115, 731, 470
104, 284, 408
*Does not include Safety Police
Second Tier Plan, PEPRA Safety Police Plan, or PEPRA Safety
Fire Plan
Source: CalPERS Actuarial Valuation - June 30, 2019
Payment
2,631,185
2,764,733
2,903,060
3,056,579
3,150, 000
3,235,145
3,322,633
3,412,526
3,504,891
3,599,798
3,697,310
3,797,510
3,900,460
4,006,244
4,048,255
3,949,281
3,841,840
TOTALUAL
Balance
151, 663, 248
150, 314, 489
148, 460, 071
146, 052, 782
143, 031,148
139, 407, 079
135,162, 817
130, 244, 868
124, 595, 720
118,153, 549
110, 851, 902
102, 619, 389
93, 379, 302
83, 049, 254
71, 540, 759
58, 827, 775
44, 962, 057
2,901,258 29, 861, 621
61, 722, 708
14, 291, 536
236,454
Payment
11, 567,182
11, 964, 750
12, 373, 738
12, 804, 742
13,182, 659
13, 536, 976
13, 901, 038
14, 275,112
14, 659, 470
15, 054, 404
15, 460,191
15, 877,144
16, 305, 557
16, 745, 754
17,131, 380
17, 385, 463
17, 640, 793
17, 072, 952
14, 554, 691
244,590
281, 738, 586
Too4lj[educeL v thiMI A A
Reduce the length of the UAL amortization period with CaIPERS,
also referred to as a fresh start (refinance)
City has opted to use this tool, reducing the amortization periods from 30 years down to 20
yea rs
This tool has eliminated the effects of negative amortization and saved the City $7.1 million
Additional discretionary payments toward the UAL
Equivalent to making
an additional
mortgage
payment
The City has opted to
use this tool,
saving the
City $3.75 million
Tools AW
Ah
Prepayment of the annual UAL payment to CalPERS
The City has opted to use this tool over the past four years, saving the City $1.25
million
Set up a pension trust to pre -fund CalPERS UAL obligations
The City
set up a
IRS Section 115
Pension Trust in 2017
Current
balance
is approximately
$4.5 million
LLbI lgption.. Bond s�
A Pension Obligation Bond ("POB") is a taxable debt issuance used to extinguish
some or all of the City's UAL.
Proceeds would be
directly
deposited with the City's
pension system,
CalPERS,
and
invested
in the
CalPERS
investment portfolio,
to
reduce
the
City's
UAL
POBs are issued only when the all -in interest rate of the bond issue is
significantly below the actuarial rate of interest factored into the calculation of
the UAL.
Debt service payments for the bond issuance will then replace the City's UAL
payments that would have been owed to CalPERS for the UAL amount paid off
::de L&,Unfunded Pens
Per the CalPERS Actuarial Valuation reports as of June 30, 2019, the City's funded ratios
were:
61.5% for Police 1st Tier
60.5% for Fire
71.8% for Miscellaneous
In total, the City's plans are funded at 65%
Leaving $151 million as the UAL
CalPERS has a strategic target of 100% funding
7
•
Preserve financial flexibility to meet or maintain City service obligations
Industry best practice to repay the UAL amortization period within a 15-20 year range
Use shorter amortization periods to reduce interest costs and better match annual costs
with the work -life of plan participants
Use a level dollar repayment schedule to improve the likelihood that funds will be
available to meet future payment demands.
Level dollar repayment plan also helps facilitate the budget process and long-term
financial planning.
-i�i7'[�1�11T1Ct3 HEilii�ilTl�ICi711[i ■C
Issuing a POB now does nothing to address future possible unfunded actuarial liabilities
growth
Returning our UAL to zero now does nothing to keep it at zero in the future
CalPERS could over -perform from an investment perspective, and we wouldn't have had
to issue such a large POB
If CalPERS over -performs and beats 7% investment returns (6.7% return earned in FY
2018/19 & 4.7% in FY 2019/20), then our UAL amount will decrease
Unknown possible State legislative/ judicial changes in the future
The State and/or the Courts could make pension rule changes to reduce our UAL
amounts
Refinancing removes an unknown cost variable and replaces UAL cost increases with a
stable fixed payment amount
Interest rates are at
historic
lows: POBs
would
be issued
at an interest rate of
approximately
2.88% versus
the
7% the
City is
currently
paying to CalPERS
Issuing a POB to refinance the UAL does not preclude the City from taking part in any
future State/court decisions, if any, related to pension program changes
Near-term pension program fixes are unlikely
Even if the pension fund is overfunded, those funds stay in the City's CalPERS account
and can be used to cover future UAL shortfalls
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Ah
Ah
I
Sale Dates
CA POB Issuers
Par Amount ($MM)
2/5/2020
City of Pasadena
$131.805
4/22/2020
County of Riverside
$719.995
4/30/2020
City of Larkspur
$18.295
5/13/2020
City of Ontario
$236.585
5/27/2020
City of Montebello
$153.425
6/2/2020
City of Inglewood
$101.620
6/4/2020
City of Riverside
$432.165
6/9/2020
City of EI Monte
$118.725
6/10/2020
City of Carson
$108.020
6/11/2020
North County Fire Protection District
$20.305
7/23/2020
West Covina Public Financing Authority*
$204.095
8/13/2020
City of Pomona
$219.890
9/17/2020
City of Azusa
$70.075
10/14/2020
Torrance Joint Powers Finance Authority**
$349.515
10/27/2020
City of Arcadia
$90.000
10/29/2020
Placentia Public Financing Authority**
$52.950
11/10/2020
City of Gardena
$101.490
* West Covina issued Lease Revenue Bonds (LRBs) as an alternative to POBs because their POB validation proceeding was challenged. The LRBs refunded their CalPERS UAL.
**Torrance and Placentia issued LRBs to avoid the POB validation proceeding and expedite the financing. The LRBs refunded their CalPERS UAL.
16
•
Manhattan Beach Planning
$92m
80/90/100%
Level debt service, matching plan terms
Torrance October 2020 (LRB)
$496m
$350m (70%)
Approximatley level debt service
Inglewood June 2020
Hawthorne October 2019
Gardena November 2020
Carson June 2020
$290m
$117.9m
$109m
Max savings first 5 years (principal deferred until
2026), increasing level DS: $4.5m in 2026-35, $7.4m in
2036-46, $13m in 2047-49 (3 year extension beyond
UAL term)
$120m (100% +
Level debt service throughout
normal costs)
$100m (92%)
$106.8m $106.8m (100%)
Tailored savings in first five years, then level debt
service; 2039finaI maturity, reducing Misc. to match
Safety term
Max savings first two years (principal deferred until
2023), level debt service to 2037then matching DS to
UAL in 2038-44 for zero savings.
• 90% of UALs. using level POB debt service
90%
Police 1st
55, 509, 926
Required
POB Debt
Contribution In
Payment
Service
Savings
6/30/2022
4,229,978
3,850,333
379,646
6/30/2023
4,355,147
3,850,204
504,942
6/30/2024
4,483,457
3,848,661
634,796
6/30/2025
4,614,998
3,852,275
762,722
6/30/2026
4,749,855
3,850,976
898,879
6/30/2027
4,877,241
3,849,140
1,028,101
6/30/2028
5,008,130
3,852,897
1,155, 233
6/30/2029
5,142, 620
3,849,097
1,293,523
6/30/2030
5,280,805
3,851,061
1,429,744
6/30/2031
5,422,793
3,848,385
1,574,408
6/30/2032
5,568,684
3,851,280
1,717,404
6/30/2033
5,718,588
3,849,718
1,868,870
6/30/2034
5,872,613
3,852,743
2,019,870
6/30/2035
6,030,875
3,850,823
2,180, 051
6/30/2036
6,193,491
3,853,339
2,340,153
6/30/2037
6,360,575
3,849,409
2,511,166
6/30/2038
6,532,258
3,848,237
2,684,020
6/30/2039
6,708,658
3,853,089
2,855,569
6/30/2040
6,889,911
3,848,619
3,041,292
6/30/2041
117,644
0
117,644
TOTAL
104,158,323
73,160,288
30,998,035
90%
Fire
TIC 50,019,892
2.88%
POB Debt
PV Savings Payment Service Savings
369,027 3,812,419 3,470,220 342,199
477,090 3,924,869 3,467,076 457,792
583,005 4,040,153 3,467,683 572,470
680,901 4,158, 349 3,468, 910 689,440
780,006 4,279,538 3,470,735 808,803
867,186 4,394,407 3,467,532 926,875
947,164 4,512,434 3,470, 878 1,041, 556
1,030,883 4,633,708 3,467,417 1,166, 290
1,107,574 4,758,316 3,470,639 1,287,678
1,185,526 4,886,352 3,469,646 1,416,707
1,257,030 5,017,909 3,469,625 1,548,284
1,329,633 5,153,082 3,470,653 1,682,429
1,396,868 5,291,974 3,466,739 1,825,235
1,465,474 5,434,684 3,468,554 1,966,131
1,529,097 5,581,321 3,470,259 2,111,062
1,594,945 5,731,988 3,471,177 2,260,811
1,657,049 5,886,800 3,471,415 2,415,385
1,713,648 6,045,867 3,468,022 2,577,845
1,774,053 6,209,311 3,470,999 2,738,311
66,705 102,487 0 102,487
21,812,864 93,855,967 65,918,178 27,937,789
90%
Misc.
TIC 30,967,106
2.88%
POB Debt
PV Savings Payment Service Savings
332,627 2,368,067 2,224,196 143,871
432,541 2,488,260 2,222,167 266,093
525,764 2,612,754 2,224,310 388,444
615,480 2,750,921 2,223,531 527,390
701,843 2,835,000 2,224,849 610,151
781,803 2,911,631 2,222,833 688,797
853,962 2,990,370 2,225,211 765,159
929,484 3,071,273 2,223,072 848,202
997,520 3,154,402 2,225,412 928,990
1,066,777 3,239,818 2,224,953 1,014,865
1,133,245 3,327,579 2,226,816 1,100,763
1,196,987 3,417,759 2,226,010 1,191,749
1,262,266 3,510,414 2,221,962 1,288,452
1,321,672 3,605,620 2,225,120 1,380,500
1,379,405 3,643,430 2,224,833 1,418,597
1,435,934 3,554,353 2,225,748 1,328,605
1,491,200 3,457,656 2,226,252 1,231,404
1,546,984 2,611,132 2,224,336 386,796
1,597,317 0 0 0
58,111 0 0 0
19,660,921 55,550,437 40,041,611 15,508,827
90%
Total UAL
TIC 136,496,923
2.88%
POB Debt
PV Savings Payment Service Savings
139,847 10,410,464 9,544,749 865,715
251,415 10,768,275 9,539,448 1,228,827
356,752 11,136, 364 9,540,655 1,595,709
470,814 11,524,268 9,544,715 1,979,553
529,461 11,864,393 9,546,560 2,317,833
580,989 12,183, 278 9,539,505 2,643,773
627,346 12, 510, 934 9,548,986 2,961,948
675,981 12, 847, 601 9,539,586 3,308,015
719,657 13,193,523 9,547,111 3,646,412
764,192 13, 548, 964 9,542,983 4,005,980
805,688 13, 914,172 9,547,721 4,366,451
847,886 14, 289, 430 9,546,382 4,743,048
891,047 14,675,001 9,541,444 5,133,557
928,000 15, 071,179 9,544,497 5,526,682
926,936 15,418,242 9,548,431 5,869,811
843,851 15, 646, 917 9,546,334 6,100, 583
760,239 15,876,714 9,545,904 6,330,810
232,119 15, 365, 657 9,545,447 5,820,209
0 13, 099, 222 7,319,618 5,779,604
0 220,131 0 220,131
11,352,219 253,564,727 179,120,076 74,444,651
TIC
2.88%
PV Savings
841,500
1,161, 046
1,465,521
1,767,195
2,011,310
2,229,978
2,428,472
2,636,347
2,824,751
3,016,495
3,195,964
3,374,506
3,550,180
3,715,146
3,835,438
3,874,730
3,908,488
3,492,750
3,371,370
124,816
52,826,004
10%
Remaining 10% UAL+
UAL POB
1,156,718 10,701,467
1,196,475 10,735,923
1,237,374 10, 778,029
1,280,474 10, 825,189
1,318,266 10,864,826
1,353,698 10, 893, 203
1,390,104 10, 939,090
1,427,511 10,967,097
1,465,947 11,013,058
1,505,440 11,048,424
1,546,019 11,093, 740
1,587,714 11,134, 096
1,630,556 11,172, 000
1,674,575 11, 219, 072
1,713,138 11, 261, 569
1,738,546 11, 284, 880
1,764,079 11, 309, 983
1,707,295 11, 252, 743
1,455,469 8,775,087
24,459 24,459
28,173,859 207,293,935
• 90% of UALs. using level POB debt service
= $16
P
$14
90% UALAmortization and Estimated POB Debt Service
FiscalYear
■ UALAmortization POB Debt Service
• 95% of UALs. using level POB debt service
95%
Police 1st
58,593,810
Required
POB Debt
Contribution In
Payment
Service
Savings
6/30/2022
4,464,977
4,065,874
399,103
6/30/2023
4,597,099
4,064,612
532,488
6/30/2024
4,732,538
4,061,865
670,673
6/30/2025
4,871,386
4,064,016
807,371
6/30/2026
5,013,736
4,066,002
947,734
6/30/2027
5,148,199
4,062,099
1,086,100
6/30/2028
5,286,360
4,063,297
1,223,063
6/30/2029
5,428,321
4,061,575
1,366,746
6/30/2030
5,574,183
4,065,063
1,509,120
6/30/2031
5,724,060
4,063,621
1,660,439
6/30/2032
5,878,056
4,062,468
1,815,588
6/30/2033
6,036,288
4,061,718
1,974,570
6/30/2034
6,198, 870
4,065,234
2,133, 636
6/30/2035
6,365,923
4,063,524
2,302,399
6/30/2036
6,537,574
4,065,934
2,471,640
6/30/2037
6,713,941
4,061,551
2,652,390
6/30/2038
6,895,161
4,063,982
2,831,179
6/30/2039
7,081,361
4,062,092
3,019,269
6/30/2040
7,272,684
4,065,880
3,206,804
6/30/2041
124,180
0
124,180
TOTAL
109,944,897
77,210,404
32,734,493
TIC
2.88%
PV Savings
387,94C
503,117
95% 95%
Fire Misc.
52,798,775 TIC 32,687,500
2.88%
POB Debt I POB Debt
Payment Service I Savings �PVSavings Payment Service Savings
4,024,220 3,663,282 360,938 350,843 2,499,626 2,345,044 154,582
4,142, 917 3,659,125 483,791 457,107 2,626,496 2,347,367 279,129
4,264,606 3,663,657 600,949 551,921 2,757,907 2,348,779 409,128
4,389,369 3,663,525 725,844 647,981 2,903,750 2,347,111 556,639
4,517,290 3,663,758 853,532 740,660 2,992,500 2,347,389 645,111
4,638,540 3,663,703 974,838 822,264 3,073,388 2,349,161 724,226
4,763,125 3,659,666 1,103,459 904,722 3,156,501 2,344,951 811,551
4,891,136 3,663,586 1,227,550 978,313 3,241,900 2,346,099 895,801
5,022,667 3,663,562 1,359,105 1,052,861 3,329,646 2,346,354 983,293
5,157,816 3,659,167 1,498, 649 1,128,490 3,419,808 2,348,707 1,071,101
5,296,681 3,660,604 1,636,077 1,197, 517 3,512,445 2,348,167 1,164, 278
5,439,365 3,662,838 1,776,527 1,263,948 3,607,635 2,349,874 1,257,760
5,585,972 3,659,825 1,926,148 1,332,070 3,705,437 2,348,093 1,357,344
5,736,611 3,662,272 2,074,339 1,394,431 3,805,932 2,348,293 1,457,639
5,891,395 3,659,310 2,232,085 1,458,504 3,845,842 2,344,943 1,500,899
6,050,432 3,660,380 2,390,053 1,518,044 3,751,817 2,347, 676 1,404,141
6,213,845 3,659,912 2,553,932 1,576,761 3,649,748 2,349,377 1,300,371
6,381,749 3,660,642 2,721,107 1,632,984 2,756,195 2,348,485 407,710
6,554,272 3,662,396 2,891,877 1,686,926 0 0 0
108,180 0 108,180 61,340 0 0 0
99,070,188 69,571,208 29,498,980 20,757,685 58,636,573 42,255,870 16,380,702
TIC
2.88%
PV Savings
95%
Total UAL
144,080, 086 TIC
2.88%
5%
POB Debt Remaining
Payment Service Savings PV Savings UAL
10,988,823 10,074,200 914,623 889,042 578,35
11,366,513 10,071,104 1,295,408 1,223,957 598,23E
11,755,051 10,074,301 1,680,750 1,543,627 618,68;
12,164,505 10,074,652 2,089,853 1,865,670 640,23;
12, 523, 526 10, 077,148 2,446,378 2,122, 866 659,13-
12,860,127
59,13;12,860,127 10, 074, 963 2,785,164 2,349,252 676,84S
13,205,986 10,067,913 3,138,073 2,572,892 695,05,
13,561,356 10,071,259 3,490,098 2,781,480 713,75E
13,926,497 10,074,978 3,851,518 2,983,666 732,972
14,301,684 10,071,495 4,230,189 3,185,354 752,72(
14,687,181 10,071,239 4,615,943 3,378,611 773,01(
15,083,287 10,074,430 5,008,857 3,563,660 793,85;
15,490,279 10,073,152 5,417,127 3,746,333 815,27E
15,908,466 10,074,089 5,834,377 3,922,037 837,28E
16,274,811 10,070,186 6,204,625 4,054,268 856,56
16, 516,190 10, 069, 606 6,446, 583 4,094,552 869,27--
16,758,753
69,27;16,758,753 10,073,272 6,685,481 4,127,521 882,04(
16, 219, 304 10, 071, 219 6,148,085 3,689,574 853,64f
13,826,956 7,728,275 6,098,681 3,557,559 727,73
232,361 0 232,361 131,752 12,23(
267,651,657 189,037,482 78,614,175 55,783,672 14,086,92
95% of UALs,, using level POB debt service
95% UAL Amortization and Estimated POB Debt Service
$8
$6
$4
$2
$0
Fiscal Year
UAL Amortization POB Debt Service
• 100% of UALs., using level POB debt service
Required
Contribution In
6/30/2022
6/30/2023
6/30/2024
6/30/2025
6/30/2026
6/30/2027
6/30/2028
6/30/2029
6/30/2030
6/30/2031
6/30/2032
6/30/2033
6/30/2034
6/30/2035
6/30/2036
6/30/2037
6/30/2038
6/30/2039
6/30/2040
6/30/2041
TOTAL
100%
Police 1st
61, 677, 695
POB Debt
Payment Service I Savings
4,699,976 4,276,551 423,425
4,839,052 4,279,195 559,857
4,981,619 4,275,244 706,375
5,127, 775 4,275,931 851,844
5,277,617 4,276,203 1,001,414
5,419,157 4,275,305 1,143, 852
5,564,589 4,278,944 1,285,645
5,714,022 4,274,199 1,439,823
5,867,561 4,274,210 1,593,351
6,025,326 4,279,123 1,746,203
6,187, 427 4,278,922 1,908,505
6,353,987 4,278,854 2,075,133
6,525,126 4,277,725 2,247,401
6,700,972 4,276,225 2,424,747
6,881,657 4,278,529 2,603,128
7,067,306 4,278,692 2,788,614
7,258,064 4,274,554 2,983,510
7,454,064 4,276,095 3,177, 969
7,655,457 4,277,968 3,377,489
130,716 0 130,716
115,731,470 81,262,468 34,469,002
100,
Fire
TIC 55,577,658
2.88%
POB Debt
PV Savings Payment Service Savings
411,582 4,236,021 3,856,455 379,567
528,977 4,360,965 3,856,286 504,680
648,745 4,489,059 3,854,700 634,360
760,463 4,620,388 3,853,261 767,127
868,983 4,755,042 3,851,962 903,080
964,821 4,882,674 3,855,126 1,027,548
1,054,090 5,013,816 3,853,795 1,160, 021
1,147, 480 5,148, 564 3,854,994 1,293,570
1,234,318 5,287,018 3,851,842 1,435,176
1,314,891 5,429,280 3,854,167 1,575,113
1,396,908 5,575,454 3,851,935 1,723,519
1,476,387 5,725,647 3,855,374 1,870,274
1,554,226 5,879,971 3,853,262 2,026,709
1,629,970 6,038,538 3,851,342 2,187,196
1,700,936 6,201,468 3,853,857 2,347,611
1,771,171 6,368,876 3,854,928 2,513,948
1,841,955 6,540,889 3,853,583 2,687,306
1,907,132 6,717,630 3,853,262 2,864,368
1,970,174 6,899,234 3,853,792 3,045,442
74,117 113,874 0 113,874
24,257,327 104,284,408 73,223,921 31,060,487
100%
Misc.
TIC 34,407,895
2.88%
POB Debt
PV Savings Payment Service Savings
368,950 2,631,185 2,470,888 160,297
476,842 2,764,733 2,472,523 292,210
582,605 2,903,060 2,468,204 434,856
684,834 3,056,579 2,470,700 585,879
783,653 3,150, 000 2,469,936 680,064
866,721 3,235,145 2,470,498 764,647
951,092 3,322,633 2,469,787 852,846
1,030,922 3,412,526 2,469,121 943,405
1,111, 785 3,504,891 2,472,290 1,032,601
1,186, 060 3,599,798 2,472,335 1,127, 463
1,261,510 3,697,310 2,469,392 1,227,918
1,330,636 3,797,510 2,468,612 1,328,898
1,401,603 3,900,460 2,469,236 1,431,225
1,470,283 4,006,244 2,471,618 1,534,626
1,533,977 4,048,255 2,470,204 1,578,051
1,596,719 3,949,281 2,469,605 1,479,676
1,659,086 3,841,840 2,472,503 1,369,338
1,718,937 2,901,258 2,472,634 428,624
1,776,483 0 0 0
64,568 0 0 0
21,857,263 61,722,708 44,470,085 17,252,623
100%
Total UAL
TIC 151,663,248
2.88%
POB Debt
PV Savings Payment Service Savings
155,814 11, 567,182 10, 603, 893 963,289
276,092 11, 964, 750 10, 608, 003 1,356,747
399,378 12, 373, 738 10, 598,147 1,775,591
523,029 12, 804, 742 10, 599, 893 2,204,850
590,129 13,182, 659 10, 598,101 2,584,558
644,968 13,536,976 10,600,929 2,936,047
699,242 13, 901, 038 10, 602, 525 3,298,513
751,855 14, 275,112 10, 598, 314 3,676,798
799,923 14, 659, 470 10, 598, 343 4,061,127
848,980 15, 054, 404 10, 605, 626 4,448,778
898,761 15, 460,191 10, 600, 250 4,859,941
945,465 15, 877,144 10, 602, 839 5,274,305
989,786 16, 305, 557 10, 600, 222 5,705,335
1,031,611 16, 745, 754 10, 599,185 6,146, 569
1,031,130 17,131, 380 10, 602, 591 6,528,789
939,807 17, 385, 463 10, 603, 224 6,782,239
845,400 17, 640, 793 10, 600, 640 7,040,153
257,222 17, 072, 952 10, 601, 991 6,470,961
0 14, 554, 691 8,131, 760 6,422,932
0 244,590 0 244,590
12, 628, 592 281, 738, 586 198, 956,475 82, 782,111
TIC
2.88%
PV Savings
936,345
1,281,911
1,630,728
1,968,326
2,242,765
2,476,510
2,704,424
2,930,258
3,146, 025
3,349,931
3,557,178
3,752,488
3,945,615
4,131, 863
4,266,043
4,307,698
4,346,441
3,883,291
3,746,657
138,685
58, 743,182
• 100% of UALs., using level POB debt service
N $18
0
$16
$14
100% UAL Amortization and Estimated PO B Debt Service
Fiscal Year
■ UALAmortization POB Debt Service
100% of UAL - $151 million
95% of UAL -$144 million
90% of UAL -$136 million
The Ad-hoc Pension Committee recommends approving the concept of issuing POBs
at the minimum level of 95% of the UAL and up to 100%.
Results in $55 million in present value savings over the next 20 years
Assumes POB issuance of approximately $151 million and one
rating
Underwriter's Discount $450,000
Bond Counsel (includes validation proceedings) $161,250
Disclosure Counsel $40,000
Municipal Advisor $81,500
Rating (assumes one rating) $85,000
Trustee $7,500
Printer $2,500
Contingency $5,000
TOTAL $832,750
Issue RFP for bond counsel and disclosure counsel
Municipal Advisor and City staff assemble POB transactional team
City Council approval of City Pension Policy — December/January
January 1911 Council meeting to approve POB resolution and Trust Agreement and authorize filing
of validation suit
File validation complaint —judicial validation process begins (week of January 25)
Issue three publication of summons (weeks of February 8-22)
Submit final documentation and request judgment (week of March 29)
Receipt of validation judgment (week of April 5)
Complete first draft of Preliminary Official Statement (POS) (mid-February)
Complete second draft of POS (mid-March)
Complete third draft of POS (early -April)
Credit rating review with credit rating agency (late -April)
Receive credit rating (early May)
City Council approval of POS and Bond Purchase Agreement
(May)
Pricing of POBs (early June)
POB Financing close (mid-June)
Wrap-up & Questions