When faced with unfunded pension liability, cities frequently look to Pension Obligation Bonds (POBs) as an effective municipal financial management tool. POBs, upon issuance, cure unfunded pension liability and annualize repayment of the bond over a fixed period of time, this provides general fund stability for the issuing municipality.
Urban Futures, Inc. (UFI) has recently been engaged to advise on the refinancing of POBs for Pasadena and Fountain Valley, allowing the Cities to capitalize on lower interest rates, not available at the time of original bond issuance.
POBs provide General Fund stability and also allow cities to capitalize on investment returns that frequently outperform the interest rate on the bonds.
“Pension Obligation Bond refinancing is a smart option for cities looking to capitalize on lower interest rates, both Pasadena and Fountain Valley were able to secure much better funding packages through this process,” said Mike Busch, CEO of Urban Futures, Inc.
As more municipalities look for ways to offset pension liability, POBs may be an attractive option. Agencies interested in POBs or refinancing existing obligations should contact Mike Busch at (714) 283-9334 (email@example.com) or John Phan (714) 923-3564 (firstname.lastname@example.org).
Urban Futures, Inc. has been providing services to local governmental agencies for over 42 years. Recently restructured into three divisions – UFI Public Management Group, UFI Public Finance Group and Isom Advisors – UFI offers clients a growing portfolio of services and industry expertise that might otherwise be out of reach. Over 300 public agencies have benefited from partnering with UFI. UFI is based in Orange, CA with offices in Walnut Creek and Bakersfield. Visit their website at www.urbanfuturesinc.com or call us at (714) 283-9334.