pages: CityCouncil/2008-10-21.pdf, 10
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CityCouncil | 2008-10-21 | 10 | payments ; earning 6%-8% would result in additional revenue i the interest payment would be non-negotiable. Councilmember deHaan stated that Peralta Community College District had an approximate 2% delta between what was borrowed on a bond and what was earned. Mayor Johnson stated that a number needs to be set and consequences need to be known; requiring non-discretionary payments could be established through an ordinance or could be part of the Charter. Mr. Kenney stated that he would have an issue with issuing a bond on the entire obligation; a number of cities have partially pre- funded the obligation. The Interim Finance Director stated pension obligation bonds are taxable; borrowing $75.4 million of taxable municipal debt at today's rate would result in a $3.2 million payment; the bond would be a serial bond and would never stop. Mr. Kenney stated bond counsel could provide more information on the matter. The Interim Finance Director stated that paying the $75.4 million over thirty years would result in paying three times the amount; a bond would be good for pre-funding the obligation and controlling the difference of the delta every year. Mr. Kenney stated the pay-as-you-go approach is irresponsible; commended Council for facing the issue; stated more information is needed on how a pension bond would work. Mayor Johnson stated information is needed on paying the obligation over thirty years, the 1079 and 1082 Plans, and using [1079 and 1082 Plan] decreases to pay for the current [OPEB] plan. Councilmember Matarrese stated consensus is not to select the pay- as-you-go approach; to shoot for the $4.4 million; to review the pension bond alternative; and to see how $2.8 million from the 1079 and 1082 Plans figure into payment further stated a resolution or ordinance could be considered as a vehicle for locking in the payment commitment. Councilmember Gilmore stated that she wants information on General Fund repercussions. Vice Mayor Tam requested clarification on the $3 million that was to go into the OPEB [when the 1079 and 1082 Plans ended] and where Regular Meeting 10 Alameda City Council October 21, 2008 | CityCouncil/2008-10-21.pdf |