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RFP No. 21-025 <br />EXHIBIT B <br />Tax -Exempt Exchange <br />$1,400,000 <br />$11 Million Tax -Exempt Bonds <br />$9.0 Million Deferred UAL Savings <br />$1,200,000 $6.8 Million NPV Savings - 63% <br />■ UAL Payments Misc. Base #6 <br />$1,000,000 0 Debt Service <br />$800,000 <br />$600,000 <br />$400,000 <br />$200,000 <br />$0 <br />'L, 'L� LL� 'Ly 'L'b L� 'L'b 'LO 30 3,' g g5 op, 3`' 3rO 3� 3� g5 AO t,' <br />,LO ,LO ti0 LO ,LO ,LO ti0 ,LO ,LO ,LO LO ,LO ,LO ti0 LO ,LO ,LO ti4 ,LO ,LO ,LO <br />Tax-exempt exchange can be viewed as an alternative to ADPs from reserves and is best suited <br />as a strategy to manage future pension liabilities. <br />Pension Obligation Bonds (POBs) <br />Given recent and substantial increases in UAL's across the state many local agencies are seeking <br />funding options to effectively reduce annual payments with the goal of retaining reserves and <br />current service levels. <br />The passage of PEPRA and the change to a fixed amortization schedule and dollar payment <br />amounts, Pension Obligation Bonds (POBs) have come back into discussion and study. Combined <br />with all-time historic lows in the taxable municipal bond market, POBs have become more <br />prominent and accepting to municipal bond investors. Since 2017, sixteen POBs exceeding $50 <br />million in issuance size have been issued in California. As noted, most are in Southern California <br />with issuance on average of $187 million (see chart below). <br />