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1/15/2026 <br />1 <br />RiversideCA.gov <br />1 <br />RiversideCA.gov <br />City Council <br />May 5, 2020 <br />2020 Pension Obligation Bonds <br />Refined Analysis, Considerations and <br />Recommended Strategy <br />Finance Department <br />RiversideCA.gov <br />2 <br />I - Revisiting the CalPERS Pension Challenge <br />II - Update on the POB Process <br />III - Refined Structuring Options for Review <br />IV - Stress Testing and Sensitivity Results <br />V - GFOA Considerations and Addressing Other POB Concerns <br />VI - Impacts of Recent Market Developments <br />VII - Recommended Strategy and Next Steps <br />DISCUSSION TOPICS <br />I. REVISITING THE CALPERS <br />PENSION CHALLENGE <br />RiversideCA.gov <br />4 <br />•City is projecting <br />General Fund deficits* of <br />$11.6M for FY 2021 and <br />$10.4M FY 2022; <br />projected to increase <br />thereafter <br />•Largely driven by <br />repayment shape of <br />City’s $642M (June 30, 2020) UAL → <br />–UAL is amortized at 7% <br />•Current funding ratios of <br />City’s plans are <br />between 71% (Safety) & <br />78% (Miscellaneous) <br />–Does not include CalPERS returns for FY <br />2019/20 <br />CURRENT REPAYMENT SHAPE OF CITY’S $642M UAL <br />$0 <br />$10,000,000 <br />$20,000,000 <br />$30,000,000 <br />$40,000,000 <br />$50,000,000 <br />$60,000,000 <br />$70,000,000 <br />20 <br />2 <br />1 <br />20 <br />2 <br />2 <br />20 <br />2 <br />3 <br />20 <br />2 <br />4 <br />20 <br />2 <br />5 <br />20 <br />2 <br />6 <br />20 <br />2 <br />7 <br />20 <br />2 <br />8 <br />20 <br />2 <br />9 <br />20 <br />3 <br />0 <br />20 <br />3 <br />1 <br />20 <br />3 <br />2 <br />20 <br />3 <br />3 <br />20 <br />3 <br />4 <br />20 <br />3 <br />5 <br />20 <br />3 <br />6 <br />20 <br />3 <br />7 <br />20 <br />3 <br />8 <br />20 <br />3 <br />9 <br />20 <br />4 <br />0 <br />20 <br />4 <br />1 <br />20 <br />4 <br />2 <br />20 <br />4 <br />3 <br />20 <br />4 <br />4 <br />20 <br />4 <br />5 <br />20 <br />4 <br />6 <br />Safety Plan UAL <br />Miscellaneous Plan UAL <br />* Deficits projected DO NOT include potential impacts from COVID-19 or any <br />potential revenue from CARES legislation <br />II. UPDATE ON THE POB PROCESS <br />RiversideCA.gov <br />6 <br />•Since the January Finance Committee and February City Council <br />meetings, much has transpired: <br />1.Two underwriting firms have been engaged through a competitive RFP <br />•Bank of America and Raymond James <br />2.Market volatility has significantly increased, attributed to the Coronavirus and <br />oil price war <br />•January interest rate estimates for POB: 3.75% to 4.00% <br />•February interest rate estimates for POB: 2.50% to 3.00% - Bond rates hit historic lows <br />•Now: Unknown given market volatility; 3.53% assumed for all analysis <br />3.Stock market indices have dropped into correction territory from February highs <br />4.City and financing team have evaluated 25+ structuring options <br />5.Refined options (3) have been stress-tested to quantify key POB risks & impacts <br />to savings under various adverse conditions <br />UPDATE ON POB PROCESS <br />1 2 <br />3 4 <br />5 6 <br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F