2021-01-19 CC Agenda Packet - ITEM #14 - PRESENTATION - POBValidation Process for Pension Obligations
■ City Will Commence the Process of Judicially Validating the Pension Obligations and Related
Documents — Allowed as an Exclusion to the California Constitutional Debt Limit. Bond
Counsel/Validation Counsel Leads Effort
■ Existing Law Supports a Conclusion that Refunding the Existing CaIPERS Obligation is Equally
Imposed by Law
■ Action Names All Interested Persons as Defendants and Commences with the Filing of a Complaint for
Validation
■ Los Angeles County Superior Court Will Be Requested to Enter a Default Judgment to the effect that all
Proceedings and Legal Documents are and will be Valid and Legal, including under the Provisions of
Constitutional Debt Limit
■ Current calendar anticipates Final Judgment on or about April 15, 2021
■ Appeal Period expected to end on or about May 16, 2021 (30 days after Judgment)
Validation Process
Approximate Milestones
Market Update
■ The 10-year and 30-year benchmark treasuries have slightly increased since the December 6
City Council approval to move forward with pension obligation bonds
■ However, taxable credit spreads have reduced for municipal bonds
U.S. Treasury Benchmarks
2.00
1.80
1.60
1.40
- 1.20
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0.60
0.40
0.20
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30 Yr
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City of El Segundo POB Indicative Scale
Rating: Assumes S&P AA+
Call: Par Call @ 7/1 /2031
Maturity
UST
UST Rate
Maturity
Year
Year
1/8/2021
Spread
Coupon
Yield
07/01/2022
1 yr
2
0.135%
40 by
0.535%
0.535%
07/01/2023
2 yr
2
0.135%
50 by
0.635%
0.635%
07/01/2024
3 yr
3
0.220%
60 by
0.820%
0.820%
07/01/2025
4 yr
5
0.477%
65 by
1.127%
1.127%
07/01/2026
5 yr
5
0.477%
85 by
1.327%
1.327%
07101 /2027
6 yr
7
0.801 %
75 by
1.551 %
1.551 %
07/01/2028
7 yr
7
0.801 %
95 by
1.751 %
1.751 %
07/01/2029
8 yr
10
1.105%
85 by
1.955%
1.955%
07/01/2030
9 yr
10
1.105%
95 by
2.055%
2.055%
07/01/2031
10 yr
10
1.105%
105 by
2.155%
2.155%
07/01/2032
11 yr
10
1.105%
120 by
2.305%
2.305%
07/01/2033
12 yr
10
1.105%
130 by
2.405%
2.405%
07/01/2034
13 yr
10
1.105%
140 by
2.505%
2.505%
07/01/2035
14 yr
10
1.105%
150 by
2.605%
2.605%
07/01/2036
15 yr
10
1.105%
155 by
2.655%
2.655%
07/01/2037
16 yr
30
1.862%
07/01/2038
17 yr
30
1.862%
07/01/2039
18 yr
30
1.862%
07/01/2040
19 yr
30
1.862%
110 by
2.962%
2.962%
IL
0
City of El Segundo -Pension Obligation Bonds I page 2 u��
Illustrative Pension Obligation Bonds` - 100%
■ 100% of UALs, using level POB debt service
Police 1st 1009% 61,677,695 TIC Fire 100% 55,577,658 TIC Misc. 100% 34,407,895 TIC Total UAL 1000/0 151,663,248 TIC
2.72% 2.72% 2.72% 2.72%
Required
Contribution In
Payment
POB Debt
Service
Savings
�PVSavings
Payment
POB Debt
Service
Savings
�PVSavings
Payment
POB Debt
Service
Savings
�PVSavings
Payment
POB Debt
Service
Savings
IPVSavings
6/30/2022
4,699,976
4,220,848
479,128
466,418
4,236,021
3,800,945
435,076
423,535
2,631,185
2,443,756
187,429
182,457
11,567,182
10,465,550
1,101,632
1,072,409
6/30/2023
4,839,052
4,217,871
621,181
588,662
4,360,965
3,800,699
560,266
530,936
2,764,733
2,440,204
324,529
307,540
11,964,750
10,458,773
1,505,977
1,427,138
6/30/2024
4,981,619
4,218,268
763,351
704,200
4,489,059
3,803,529
685,530
632,409
2,903,060
2,440,513
462,547
426,705
12,373,738
10,462,310
1,911,428
1,763,313
6/30/2025
5,127,775
4,218,255
909,520
816,785
4,620,388
3,801,458
818,930
735,431
3,056,579
2,442,590
613,989
551,386
12,804,742
10,462,303
2,342,439
2,103,603
6/30/2026
5,277,617
4,219,217
1,058,400
925,272
4,755,042
3,801,276
953,766
833,799
3,150,000
2,439,250
710,750
621,350
13,182,659
10,459,743
2,722,916
2,380,420
6/30/2027
5,419,157
4,218,878
1,200,279
1,021,469
4,882,674
3,800,432
1,082,242
921,017
3,235,145
2,442,204
792,941
674,814
13,536,976
10,461,514
3,075,462
2,617,300
6/30/2028
5,564,589
4,221,289
1,343,300
1,112,859
5,013,816
3,803,065
1,210,751
1,003,048
3,322,633
2,440,777
881,856
730,575
13,901,038
10,465,131
3,435,907
2,846,482
6/30/2029
5,714,022
4,221,759
1,492,263
1,203,473
5,148,564
3,804,439
1,344,125
1,084,004
3,412,526
2,440,259
972,267
794,109
14,275,112
10,466,457
3,808,655
3,071,585
6/30/2030
5,867,561
4,219,837
1,647,724
1,293,598
5,287,018
3,804,132
1,482,886
1,164,187
3,504,891
2,440,349
1,064,542
835,753
14,659,470
10,464,318
4,195,152
3,293,537
6/30/2031
6,025,326
4,218,382
1,806,944
1,380,967
5,429,280
3,804,707
1,624,573
1,241,589
3,599,798
2,442,706
1,157,092
894,314
15,054,404
10,465,796
4,588,608
3,506,870
6/30/2032
6,187,427
4,217,144
1,970,283
1,465,856
5,575,454
3,800,924
1,774,530
1,320,219
3,697,310
2,442,132
1,255,179
933,830
15,460,191
10,460,199
4,999,992
3,719,905
6/30/2033
6,353,987
4,219,234
2,134,753
1,546,087
5,725,647
3,801,190
1,924,457
1,393,781
3,797,510
2,442,565
1,354,946
981,315
15,877,144
10,462,989
5,414,155
3,921,183
6/30/2034
6,525,126
4,220,823
2,304,303
1,624,613
5,879,971
3,801,540
2,078,431
1,465,365
3,900,460
2,439,730
1,460,730
1,029,865
16,305,557
10,462,093
5,843,464
4,119,843
6/30/2035
6,700,972
4,221,602
2,479,370
1,701,671
6,038,538
3,801,686
2,236,852
1,535,223
4,006,244
2,443,528
1,562,716
1,072,542
16,745,754
10,466,816
6,278,938
4,309,435
6/30/2036
6,881,657
4,221,248
2,660,409
1,777,487
6,201,468
3,801,326
2,400,142
1,603,596
4,048,255
2,443,573
1,604,682
1,072,129
17,131,380
10,466,147
6,665,233
4,453,212
6/30/2037
7,067,306
4,221,233
2,846,073
1,851,092
6,368,876
3,801,768
2,567,108
1,669,652
3,949,281
2,440,825
1,508,456
981,103
17,385,463
10,463,825
6,921,638
4,501,847
6/30/2038
7,258,064
4,216,746
3,041,318
1,925,607
6,540,889
3,804,166
2,736,723
1,732,753
3,841,840
2,439,519
1,402,321
887,878
17,640,793
10,460,431
7,180,362
4,546,238
6/30/2039
7,454,064
4,218,566
3,235,498
1,994,209
6,717,630
3,803,031
2,914,599
1,796,423
2,901,258
2,440,964
460,294
283,704
17,072,952
10,462,560
6,610,392
4,074,336
6/30/2040
7,655,457
4,221,371
3,434,086
2,060,462
6,899,234
3,803,362
3,095,872
1,857,533
0
0
0
0
14,554,691
8,024,733
6,529,958
3,917,995
6/30/2041
1 130,716
0
130,716
76,349
113,874
0
113,874
66,512
0
0
0
0
244,590
0
244,590
142,862
TOTAL
115,731,470 80,172,571
35,558,899
25,537,135
104,284,408
72,243,674
32,040,734
23,011,011
61,722,708
43,945,443
17,777,265
13,241,367
281,738,586
196,361,689
85,376,897
61,789,513
*Does not include Safety Police Second Tier Plan, PEPRA Safety Police Plan, or
PEPRA Safety Fire Plan (see adjacent table)
AA+ Market Rates as of 1 /8/2021 plus 25bps cushion; PV Savings at True Interest Cost
Fiscal Year
Police 2nd
Police PEPRA
Fire PEPRA
Total
6/30/2022
11,584
1,152
904
13,640
6/30/2023
11,584
1,152
903
13,639
6/30/2024
11,585
1,152
903
13,640
6/ 30/ 2025
11,585
1,151
904
13,640
6/30/ 2026
11, 584
1,151
903
13,638
TOTAL
57,922
5,758
4,517
68,197
Illustrative Pension Obligation Bonds — 100%
■ 100% of UALs, using level POB debt service
100% UAL Amortization and Estimated POB Debt Service
$18
0
$0
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Fiscal Year
■ UALAmortization POB Debt Service
City of El Segundo -Pension Obligation Bonds I pagej4Lec13