Estimated; Reflects UAL and new bond debt service at time of closing. Assumes annual CalPERS returns of 7% in future.
Unique Characteristics of Project: The North County Fire Protection District (the “District”) obtained an inaugural rating of “AA-” and restructured about 80% of its unfunded accrued liability (UAL) with CalPERS at a 3.28% interest rate.
Executive Summary: The District refinanced 80% of its Safety Plan UAL to bring its funding ratio up to 95% and create a smooth payment shape for its pension liabilities over the next 20 years. The District’s inaugural “AA-” credit rating with S&P for the $20 Million Pension Obligation Bond issuance, combined with sound financial policies that were adopted through the process, allowed the District to garner strong investor interest and lock in a 3.28% interest rate (with cost included).
Projected savings (assumes CalPERS futures returns of 7%) from the refinancing is over $8 million, or $6.5 million on a present value basis. The near-term savings and enhanced budget predictability will allow the District to focus their resources on critical capital projects over the next few years, while maintaining strong liquidity/reserve levels.