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Home My WebLink About10. Adopt Ord Auth the Issuance and Sale of Taxable Pension Obligation Bonds, Series 2021ORDINANCE NO. 20 - XXX - AUTHORIZING ISSUANCE AND SALE OF TAXABLE PENSION OBLIGATION BONDS, SERIES 2021 NOVEMBER 1 0 , 2020 PAGE2 flexibility in determining the optimal size of the 2021 Pension Obligation Bonds, a not to exceed principal amount of $150 million is included in the Ordinance. Also included in the Ordinance is a not-to-exceed true interest cost of 4.0% and underwriters' discount of 0.30% of the total principal amount of the 2021 Pension Obligation Bonds. Additionally, the Ordinance authorizes the execution of the following documents in relation to the issuance of the bonds: First Supplemental Trust Agreement, Bond Purchase Agreement, Preliminary Official Statement, and Continuing Disclosure Certificate. In the upcoming months as part of the bond issuance process, the City's Finance team intend to meet with the credit rating agency in December 2020 or in early 2021 and be in a position to reassess market conditions at the end of January 2021 to early February 2021. If market conditions are favorable, the City's goal is to close the financing by end of February 2021, which will deliver savings to the City starting in FY 2022. If the market is not favorable, and the City closes the transaction and funds are not delivered to CalPERS by July 1, 2021 savings would not be generated until FY 2023. FISCAL IMPACT Debt service on the 2021 Pension Obligation Bonds will be payable from the City's General Fund. Payments to CalPERS are anticipated to be reduced by an amount greater than the debt service payments on the 2021 Pension Obligation Bonds thereby generating a net positive fiscal impact on the City's General Fund. The 2021 Pension Obligation Bonds are currently estimated to generate over $54 million of cash flow savings to the City over the life of the 2021 Pension Obligation Bonds based on current market conditions. Actual savings numbers will be determined by the interest rates locked in on the POB sale date. CITY COUNCIL PRIORITIES Fiscal Responsibility Economic Vibrancy Quality of Life, Safety, and Infrastructure ATTACHMENT Attachment A: Ordinance No. 20- Attachment B: First Supplemental Trust Agreement Attachment C: Bond Purchase Agreement Attachment D: Preliminary Official Statement Attachment E: Continuing Disclosure Certificate (included as Appendix F to Appendix D -Preliminary Official Statement)