BOARD MEETING DATE: August 6, 2004
AGENDA NO. 14

Fiscal Year 2004-05 Budget Transfer Relating to Series 2004 Pension Obligation Bonds Debt Service

SYNOPSIS:

The Board, at its June 4, 2004 meeting, authorized the issuance and sale of taxable pension obligation bonds to retire the Unfunded Actuarial Accrued Liability due to the San Bernardino County Employees’ Retirement Association. The issuance and sale of $47,030,000 in bonds was completed on June 29, 2004, resulting in $11.7 million in net present value savings. The first year savings equals $1,895,097. It is now necessary to transfer $1,509,355 from the Salaries and Benefits Major Object, Retirement Account, to the Services and Supplies Major Object, Interest Expense Account, to cover the first year of debt service. This transfer moves moneys to the appropriate expenditure account and does not require an additional appropriation.

COMMITTEE:

Administrative, July 16, 2004. Less than a quorum was present for the discussion of this item; those Committee members who were present communicated their concurrence.

RECOMMENDED ACTION:

Transfer $1,509,355 from the Salaries and Benefits Major Object, Retirement Account, to the Services and Supplies Major Object, Interest Expense Account, to cover the FY 2004-05 debt service payment related to the Series 2004 Pension Obligation Bonds.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Board, at its June 4, 2004 meeting, authorized the issuance and sale of taxable pension obligation bonds to retire the Unfunded Actuarial Accrued Liability (UAAL) due to the San Bernardino County Employees’ Retirement Association. The issuance and sale of $47,030,000 in bonds was completed on June 29, 2004, resulting in $22.4 million in total savings ($11.7 million in net present value savings) over the next 20 years. The first year savings equals $1,895,097. By retiring the UAAL as of June 29, 2004 the AQMD will realize a reduction of 5.61% in its FY 2004-05 retirement rates.

Proposal

It is now necessary to transfer $1,509,355 from the Salaries and Benefits Major Object, Retirement Account, to the Services and Supplies Major Object, Interest Expense Account, to cover the first year of debt service.

Resource Impacts

This action transfers already-budgeted funds to the appropriate expenditure account and does not increase the FY 2004-05 Budget.

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