66°
Cloudy
THU
 73°
 54°
FRI
 76°
 54°
SAT
 69°
 47°
SUN
 72°
 43°
MON
 73°
 47°

Healdsburg to refinance pension debt for $900,000 savings

The Healdsburg City Council this week authorized the refinancing of some of the city's employee pension debt, in a move estimated to save $900,000 over a decade.

The City Council on a 3-0 vote approved the issuance of up to $9 million in bonds to pay off a "side-fund debt" that the city owes CalPERS, the public employee retirement system.

"This is an opportunity to repay (the debt) at a lower rate and obtain savings for the city," said Councilman Jim Wood, who voted to authorize the bonds along with council members Susan Jones and Tom Chambers.

The action won't reduce an additional $26 million estimated gap in funding employee pensions. But Healdsburg officials said it will enable the city to pay off at a lower rate of interest approximately $9 million it owes CalPERS.

Vernon Simmons, a City Council candidate in the November election, questioned why the city isn't using money it already has in other funds to pay off what it owes the state retirement system.

He noted that a treasurer's report for July shows the city has an investment portfolio of $65 million and the average rate of return is less than 1 percent.

"If you have that kind of money, why not invest it in yourself?" he asked.

He said he was puzzled why the city is authorizing the issuance of bonds — basically borrowing more money at a rate of interest of around 4 percent. "I look at the numbers and this thing doesn't make a lot of sense," he said.

According to the treasurer's report, the city funds are invested in government pools, trust funds and federal agency securities.

City Manager Marjie Pettus said the investment funds have restrictions and could not be used to pay pension obligations. The funds are intended as a cushion for things such as the city's utility departments, including wastewater and electricity, and also include redevelopment money.


© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  Place an Ad
Switch to our Mobile View