Meeting Time: January 05, 2021 at 6:00pm PST
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Agenda Item

5.1. CALPERS PENSION COSTS AND UAL RESTRUCTURING PRESENTATION The City of Chico (the City) continues to explore various cost management strategies for its $146 million unfunded accrued liability (UAL) with the California Public Employees Retirement System (CalPERS). At the September 23, 2020 Finance Committee, the City and NHA Advisors (NHA) made a presentation discussing the City's most recent actuarial report released by CalPERS in July 2020. The City and NHA provided a discussion on alternative repayment strategies, including a restructuring of the UAL. The City and NHA will make a similar presentation at the January 5, 2021 City Council meeting to assist in providing continued education on these topics. (Report - NHA Advisors)

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    Juanita Sumner over 1 year ago

    The UAL has grown because of unrealistic employee contributions (15% or less) and poor investments by CalPERS. Staff has also added three new positions in 2020 at salaries over $100,000. Without a plan to manage employee costs, this bond is dangerous. We are depending on staffers with little or no investment experience to gamble us further into debt, at the expense of public infrastructure and public safety. The bond holders have priority over all other city expenses. We need true pension reform

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    Bart Crocket over 1 year ago

    Even if this works it won’t change the fact that the pensions are unaffordable. But it probably won’t work so you will demand even more tax increases. Nothing will change until you reform the pensions but you will never do that.

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    Dave Howell over 1 year ago

    This is like having a credit card you can’t afford (pensions), so you get a new card to pay off the old card assuming the interest rate on the new card is less than the old card. BUT you don’t know that for sure.

    Do you know the Government Finance Officers Association unequivocally states that local governments should NOT issue POBs?

    This is nothing but a gamble that will end in tears. And it will be we the taxpayers doing the crying.

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    Joe Lafleur over 1 year ago

    POBs are what pushed Stockton and San Bernardino into bankruptcy after they refused to reform their pensions and other employee benefits. You geniuses are putting us on the same path. Wonderful!

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    Buster Hyman over 1 year ago

    This is a bad idea. It is just a gamble and HIGHLY IRRESPONSIBLE!

    If you can’t make more than the interest and fees on the bond the pension debt WILL INCREASE.

    Instead of gambling our tax dollars away, REFORM THE PENSIONS AND OPEB!

    Of course you won’t do that because you are beholden to the public employee unions, especially the fire and cops!

    When this scheme fails you will raise our taxes even more. Instead YOU should be on the hook financially, NOT THE TAXPAYERS!

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    Julie Cambridge over 1 year ago

    POBs (pension obligation bonds) are a bad financial plan. They WILL increase taxes. Simply because interest rates are currently low does not mean POBs are an acceptable risk. The City should not gamble with our money particularly when they have the power to set unrealistic target returns and lower annual required contributions. POBs can not substitute for poor governance.