agenda city of watsonville city council/redevelopment agency meeting

CITY COUNCIL/REDEV# 6.2 (t)
RESOLUTION NO.__________ (CM)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE SETTING FORTH INTERNAL LOAN TERMS AND
CONDITIONS BETWEEN THE GENERAL FUND AND THE CITY’S
POOLED MONEY INVESTMENT ACCOUNT FOR AN INTERNAL LOAN
OF UP TO $6,454,697 MILLION AND AUTHORIZING THE CITY
MANAGER TO PREPAY THE CALPERS POLICE AND FIRE SIDE
FUNDS
WHEREAS, at June 30, 2011, the General Fund’s California Public Employee
Retirement System’s (CalPERS) Police and Fire “Side Funds” have a cumulative
balance of $6,454,697 at interest rates between 7.882% and 8.788% for a period of up
to 156 remaining months; and
WHEREAS, the City has from time to time refinanced its obligations through
private placement loans or the bond market; and
WHEREAS, the City’s Finance Department continually evaluates current financial
market conditions to determine whether it is feasible and prudent to exercise its options
to purchase said obligations in accordance with the City’s Investment Policy; and
WHEREAS, there is presently an opportunity for the City to use its pooled money
investment account to exercise said options thereby reducing the interest rate on debt
service payable from the General Fund and increase the interest return on funds held in
the City’s pooled money investment account; and
WHEREAS, the City’s Investment Policy requires the City Council approve
investments with a maturity of more than 5 years (60 months); and
WHEREAS, the City’s Administrative Services Director has recommended that
the Council authorize said transaction.
Reso No. (CM)
Q:\COUNCIL\2011\061411\Defeasance of CalPers Fund.docx
ri 6/8/2011 3:58:27 PM
AJS ______ CJP ______ Finance ______
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