Brawley saves on pension fund

BRAWLEY — The city council here restructured a debt of more than $16 million in pension obligations for its public employees.

Since pension contributions surpassed economic growth needed to pay off pensions, the city pursued an alternative financing means to fix costs associated with the CalPERS Side Fund.

The CalPERS Side Fund was established in 2003 when the city became part of a risk pool in which unfunded pension benefits were determined to be a liability.

But in January 2017, the city council approved an authorization action for the issuance of taxable pension obligations bonds.

In the completion of a transaction last week, the city paid off the CalPERS Side Fund in the amount of $16,310,000.

The new bond payment reduced the 30-year time limit to just 15 years.

Since the city took advantage in the change in rate and term, the city now realizes a savings of approximately $300,000 per year, which includes $190,000 annually for the General Fund.

The Net Present Value savings of the transaction represents $7,546,000.

“We are public stewards of precious resources,” said Mayor Sam Couchman.

“This financial solution is a way to improve our balance sheet.”

The city’s financing team included Ramirez and company as underwriter, Norton Rose Fulbright as bond and disclosure counsel and Bartle Wells Associates as financial advisor. “We set out to examine what alternatives would best serve out short and long term financial needs,” said Couchman. “This is a win for the city of Brawley.”