City of Piedmont Pension Debt Refinance Bonds, Measure A (February 2014)
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Text of measure
The question on the ballot:
| Shall the City of Piedmont, at City Council discretion, issue bonds or otherwise
incur debt in a principal amount not to exceed $8,000,000 to refinance a portion of the City’s existing obligation to the California Public Employees Retirement System for the purpose of achieving debt service savings, as more specifically set forth in Ord. 711 N.S. which is on file with the Piedmont City Clerk?
ORDINANCE NO. 711 N.S.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PIEDMONT AUTHORIZING THE ISSUANCE OF BONDS OR THE INCURRENCE OF DEBT TO REFINANCE CERTAIN EXISTING DEBT OBLIGATIONS TO THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM AND RELATED MATTERS
The City Council of the City of Piedmont hereby ordains as follows:
SECTION 1 RECITALS
The City Council hereby finds and determines the following recitals are true and correct:
a. The City of Piedmont (the “City”) entered into a contract with the California Public Employees’ Retirement System (“PERS”) dated October 16, 1974, as amended (the “PERS Contract”), pursuant to which the City is obligated to make payments to PERS relating to pension benefits accruing to members of the City’s miscellaneous and safety plans in accordance with the provisions of Sections 20000 et seq. of the Government Code (the “PERS Retirement Law”).
b. In 2003, the PERS Retirement Law was amended to provide that PERS establish criteria under which contracting members, such as the City, would be required to participate in risk pools (i.e., pools containing multiple employers), and PERS established such criteria for participation in risk pools, including mandated participation for rate plans with less than 100 active members.
c. Because each of the City’s miscellaneous plan and safety plan had less than 100 active members, PERS assigned the City’s plans to risk pools and established “side funds” separate from the risk pools for each plan as of June 30, 2003 (individually, a “Side Fund” and together, the “Side Funds”). The amount of each Side Fund equals the amount of the unfunded accrued actuarial liability of the City in connection with each plan. PERS amortizes the obligations related to the Side Funds over a fixed period of time and charges the City an interest rate on such amounts at a rate equal to the PERS actuarial rate of return, which is currently 7.50%. For the Fiscal Year ended June 30, 2013, the payment for the miscellaneous plan Side Fund was $314,103 and the payment for the safety plan Side Fund was $928,164. The City’s obligations to PERS related to the Side Funds as evidenced by the PERS Contracts is referred to herein as the “PERS Side Fund Obligations.”
d. As of June 30, 2013, PERS projected the amount of the PERS Side Fund Obligations as $2,311,901 for the miscellaneous plan and as $5,532,124 for the safety plan. This amount changes from time to time based on actuarial determinations prepared by PERS.
e. The PERS Side Fund Obligations are debt obligations of the City imposed by law.
Agenda Report Page 22 f. The City is authorized pursuant to Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Division 2 of Title 5 of the Government Code of the State of California or under the Charter of the City to issue refunding bonds or otherwise incur indebtedness for the purpose of refunding any evidence of indebtedness of the City.
g. For the purpose of refunding all or any portion of the PERS Side Fund Obligations, the City has determined to authorize the issuance of bonds or the incurrence of other debt in order to achieve debt service savings, subject to satisfying the requirements of Section 4.14 of the Charter of the City.
h. Section 4.14 of the Charter of the City provides, in part, that: “No bonded indebtedness which shall constitute a general obligation of the City may be created unless authorized by the affirmative votes of a majority of the electors voting on such proposition at any election at which the question is submitted to the electors and unless in full compliance with the provisions of the State Constitution, other State laws and this Charter.”
i. The City will hold its regular municipal election on February 4, 2014 (the “Election”).
j. This Council desires to submit to the registered voters of the City at the Election the question of whether bonds of the City may be issued and sold or debt otherwise incurred for the purpose of refinancing all or any portion of the PERS Side Fund Obligations as required by the Section 4.14 of the Charter of the City.
SECTION 2 ISSUANCE OF BONDS OR INCURRENCE OF DEBT AUTHORIZED
The City is hereby authorized, at City Council discretion, to issue bonds or otherwise incur debt in a principal amount not to exceed $8,000,000 to refinance all or any portion of the PERS Side Fund Obligations for the purpose of achieving debt service savings.
SECTION 3 EFFECTIVENESS OF ORDINANCE
Pursuant to Section 4.14 of the Charter of the City, this Ordinance shall not become effective unless approved by a majority of the voters voting on the proposition associated with this Ordinance at an election to be held on Tuesday, February 4, 2014. This Ordinance shall be posted at City Hall after its second reading by the City Council for at least 30 days.
SECTION 4 OTHER MATTERS
Should this Ordinance be approved by the voters as required by the Charter of the City, and should the City Council thereafter elect to issue said bonds or otherwise incur debt, (1) the approval of the terms and conditions of the bonds and the sale thereof or the incurrence of debt and other matters related thereto shall be approved by City Council by ordinance, in furtherance of the authority granted by this Ordinance; and (2) the members of the City Council and other officers of the City are hereby authorized and directed, individually and collectively, to do any and all things that they deem necessary or advisable in order to effectuate the purposes of this Ordinance.
- Alameda County elections office ballot measure information
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- City Council Agenda Report, October 7, 2013
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