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Alex Vassar

Boardmember, Arcade Creek Recreation and Park District

June 18, 2019

The Side Fund

As of June 30, 2017, the Arcade Creek Recreation and Park District Side Fund at CalPERS had a balance of $297,034, which was projected to cost $535,271 to pay off over 30 years (including $238,237 in interest).
In November 2017, the district transferred the side fund (a total of $305,400) from CalPERS to a loan from Umpqua Bank with Hamilton Street Park (one of the two parks owned by our district) provided as collateral. This 10-year loan is scheduled to be paid off in November 2027, with a total of $70,690.13 in interest.
Transferring the loan away from CalPERS had two major benefits;
  • First, it shortened the payment period from 30 years to 10, reducing the interest that would be paid by $167,547.
  • Second, by removing the debt from CalPERS, it replaced the risk of investments underperforming with a set interest rate.
As of the end of June 2019, we have paid off $40,400 of the total $305,400 side fund debt at a cost of $59,664.33.
Remaining Unfunded Liability
With the +$300,000 balance in the Side Fund transferred to Umpqua, the district’s remaining unfunded liability (UL) at CalPERS is $257,985, which the district is currently scheduled to pay off over 30 years (while paying an additional $252,153 in interest).
Starting with the 2019-20 fiscal year, the board of directors included funding in the budget for an accelerated pay-off of $29,000.
This means that in 2019-20, the district will be paying $26,400 for the Side Fund at Umpqua, $29,000 in accelerated pay-offs on our unfunded liability at CalPERS, and $15,548 for current employer contributions (and the 30-year payoff). Total: $70,948.

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