HomeMy WebLinkAboutButte County 2004 Pension Obligation Bonds Stafford, Kathleen
From: Snyder,Ashley
Sant: Wednesday, December 7' 2O1612:SOPM
To: Stafford' Kathleen
Sukjact: FW: Butte County 2OO4Pension Obligation Bonds
B{JSConeopondence
AshLCHN. 5w�,Uoter
Assistant Clerk of the Board
T: 530.538.2867 F: 530.538.7120
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From:]eooee, Meegan
Sent:Wednesday, December 07, 201611:S6AM
To: Kirk, Maureen; Lambert, Steve;Wahl, Larry; Connelly, Bill Teeter, Doug
Cc: Hahn, Paul; Snyder, Ashley
Subject: FW: Butte County 2004Pension Obligation Bonds
Good morning—
Below please find additional detail on the County's Pension Obligation Bonds as it relates to the strategy the Board
adopted in2U11. | hope this addresses your questions from yesterday, if there iaadditional information | can provide
please don't hesitate toask.
| hope you all have aMerry Christmas
M Deputy Administrative Officer
T: 530.538.7832
From:Wilson,Joanne
Sent:Wednesday, December 7, 201611:48AM
To:]eooee, Meegan
Subject: Butte County 2004Pension Obligation Bonds
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The following iSiDresponse hDinquiries bythe Board yesterday:
The COuDb/'S P8DSiOD Obligation Bonds are COnlpOS8d of two COnlpOD8DtS. The first' S8[i8S A' has an
outstanding balance Of$27'04O'OOO. The interest and principal payments are fixed for the term Ofthe loan.
Interest varies from 5.4O896hD0.O7O96with debt services payments increasing each year due hDlarger
principal payments. The current payment iS $1'S4S'S50 (of which $28O'OOOiSp[iDCip@|\' the final payment iO
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2034 is $3,649,014 (of which $3,440,000 is principal). Principal payments on Series A began in 2014. The
annual payments are primarily comprised of interest until about 2024. The County may not prepay this loan.
The second, Series B, has an outstanding balance of$20,840,000. The interest rate is variable. Each month
interest is calculated and paid to bondholders (principal is paid annually). The interest rate for the December
2016 payment was .83%. The principal portion of each payment increases annually. The County may prepay
this loan.
In 2011, the Board adopted a strategy to prepare for increasing payments as well as interest rate fluctuations.
Additionally, the strategy included the partial prepayment of the Series B bonds when the reserve funds,
currently invested in the County treasury pool, are earning interest at a lower rate than the County is paying on
the Series B bonds. During the first quarter of this year, the reserve funds ($7.9 million) earned interest at a
rate of 1.17%; higher than the current interest rate of .83% the County is paying on the Series B bonds. The
County's financial consultants are reviewing the strategy annually and staff monitor interest rates on an
ongoing basis.
Thank you,
Joanne
-A&C"UW.-9. )Va4om
Management Analyst
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25 C..�-2..L..A 1121Y C e..ii.i Le..r., Dirive SLAite 200 Orovj!..H1.e CA 95965
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T: 530.538.2524
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