|
1/15/2026
<br />6
<br />RiversideCA.gov
<br />31
<br />OTHER CONSIDERATIONS
<br />•Potential UAL increase from poor FY 2019/20 returns should be
<br />considered when determining optimal size of POB
<br />–For example, the $430M Option 2 is currently 67% of the UAL
<br />•However, if the UAL will be increasing from $642M to $867M, this $430M pay off is effectively only about 50% of the UAL
<br />•City can use future surpluses and/or monies freed up from maturing debt
<br />payments to continue applying to pension challenge (see next slide)
<br />–Can use to pay down more UAL, grow Section 115 Trust assets, and/or pay off
<br />the POBs
<br />•Proposed POB helps relieve some, but not all, of the projected deficits
<br />–If more than $7M of General Fund savings for FY 2021 is desired due to COVID-
<br />19 driven revenue declines, POB structure could likely generate up to $15M if
<br />needed
<br />RiversideCA.gov
<br />32
<br />CITY CAN RE-DEPLOY MATURING DEBT PAYMENTS TOWARDS
<br />SECTION 115 TRUST, CALPERS, OR TO REDEEM POBS IN FUTURE
<br /> $-
<br /> $5,000,000
<br /> $10,000,000
<br /> $15,000,000
<br /> $20,000,000
<br /> $25,000,000
<br /> $30,000,000
<br /> $35,000,000
<br /> $40,000,000
<br />Ju
<br />n
<br />-
<br />2
<br />0
<br />Ju
<br />n
<br />-
<br />2
<br />1
<br />Ju
<br />n
<br />-
<br />2
<br />2
<br />Ju
<br />n
<br />-
<br />2
<br />3
<br />Ju
<br />n
<br />-
<br />2
<br />4
<br />Ju
<br />n
<br />-
<br />2
<br />5
<br />Ju
<br />n
<br />-
<br />2
<br />6
<br />Ju
<br />n
<br />-
<br />2
<br />7
<br />Ju
<br />n
<br />-
<br />2
<br />8
<br />Ju
<br />n
<br />-
<br />2
<br />9
<br />Ju
<br />n
<br />-
<br />3
<br />0
<br />Ju
<br />n
<br />-
<br />3
<br />1
<br />Ju
<br />n
<br />-
<br />3
<br />2
<br />Ju
<br />n
<br />-
<br />3
<br />3
<br />Ju
<br />n
<br />-
<br />3
<br />4
<br />Ju
<br />n
<br />-
<br />3
<br />5
<br />Ju
<br />n
<br />-
<br />3
<br />6
<br />Ju
<br />n
<br />-
<br />3
<br />7
<br />General Fund Debt Service
<br />As existing debt matures,
<br />continue appropriation if
<br />feasible, but redeploy to
<br />Section 115 Trust
<br /> -
<br /> 5,000,000
<br /> 10,000,000
<br /> 15,000,000
<br /> 20,000,000
<br /> 25,000,000
<br /> 30,000,000
<br /> 35,000,000
<br /> 40,000,000
<br />Section 115 Trust
<br />32
<br />VII. RECOMMENDED STRATEGY
<br />AND NEXT STEPS
<br />RiversideCA.gov
<br />34
<br />CFO RECOMMENDATION
<br />•Target funding ratio around 92% through POB issuance (Option 2)
<br />•Maintain some flexibility to address COVID-19 Impacts If Needed
<br />–Consider potential impacts of poor FY 2019/20 CalPERS returns and COVID-19 related near-term revenue impacts
<br />–Ultimate size likely between $430M to $525M (Max Allowed Under Resolution)
<br />–FY 2021 Savings could be increased beyond $7M if needed
<br />•Set a maximum interest rate (TIC – True Interest Cost) of 4.25%
<br />–2.75% lower than the CalPERS discount rate of 7.00%
<br />–Equates to 20% PV est. savings ($85 million in today’s dollars for the $430M Option 2)
<br />–City wouldn’t move forward unless threshold is met
<br />•Maintain same maturity as current UAL payment schedule
<br />RiversideCA.gov
<br />35
<br />◼January/February Initial presentations to Committee and Council
<br />◼February
<br />UW team hired through competitive RFP process
<br />•City staff, NHA, UWs and legal team analyze dozens of structuring
<br />options and discuss benefits/risks
<br />◼March
<br />Initiate stress testing with third party actuary; begin credit presentation
<br />and legal documents/POS
<br />•Budget Engagement Commission meeting: March 12th
<br />•Multiple discussions with Finance Committee Chair
<br />◼May 5
<br />City Council approval
<br />•Presentation on options and stress testing results
<br />•Final approval of financing and recommended option (approve
<br />team, POS, resolution, legal documents, etc.)
<br />◼May/June
<br />Credit Rating; Price and Close POBs; update budget
<br />•Optimal timing of sale as well as deposit/transfer to CalPERS will be
<br />assessed depending on market conditions this Spring
<br />•It could be recommended that transaction is delayed into the
<br />Summer if savings thresholds cannot be met
<br />TIMELINE
<br />31 32
<br />33 34
<br />35
<br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F
|