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3 <br /> <br /> The POBs structure will contain an early call provision. <br /> The POBs shall not finance normal costs and shall only be used to refinance UAL. <br /> The POBs should provide significant projected cash flow savings. <br /> The City shall budget and transfer at least 25% of projected cash flow savings to the Trust to <br />mitigate against future UAL likely to occur. Any cash flow savings not transferred to the Trust shall <br />be transferred to the City’s other reserves. <br />8. Fresh Start Amortization: CalPERS allows for permanent adjustments to be made to the UAL amortization <br />schedule by combining amortization bases, resulting in a shorter payment period and level payments. <br />Despite higher payments in the early years, the shorter repayment period leads to interest savings in the <br />later years. While less common and restrictive, this tool will be evaluated as a potential strategy. <br />9. Review of Funding Policy: The City will review this policy periodically to determine if changes to this policy <br />are necessary to ensure progress is being made towards funding the City’s CalPERS pension costs and <br />mitigating the impact of the costs associated with future UAL. This policy supersedes the PARS Trust <br />withdrawal policy approved by the City Council in February 2020. <br /> <br />Page 196 of 242