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.
