The La Puente City Council moves to save residents an estimated $3.5 million without incurring new debt! Read the official press release below to learn more:
LA PUENTE, CA – In August 2016, the City Council unanimously approved a refunding of the City’s Sewer System Bonds which provided a savings of approximately $62,000 annually for the next 20 years. Seeking to recognize even greater savings, the City Council approved the Pension Liability (Debt) “refunding” on October 13, 2020. This action is anticipated to provide a savings of approximately $230,000 to the General Fund annually over the next 15 years. The City Council continues to plan and evaluate the City’s financial condition, keeping the residents’ best interest as a priority in maintaining fiscally responsible oversight of the City budget.
Five years ago, accounting regulations began requiring all cities, including the City of La Puente, to display their Pension Liability (Debt) as part of their financial statements, increasing transparency for all readers. On June 30, 2019, the City’s pension liability was $10,420,846 and as of June 30, 2020 had increased to approximately $10,518,317. The City currently pays 7% interest on this outstanding debt to CalPERS, its pension plan provider. The City is prudently moving to lower that interest rate substantially, thereby saving you, the taxpayers, an estimated $3.5 million over the course of 15
years. In addition, our current unpaid pension obligation will be paid off 5 years ahead of the original schedule. The City is NOT incurring any additional new debt related to pension costs, but rather strategically refinancing to a much lower interest rate. As many residents are currently refinancing their home loans, the City is likewise modifying the financing on it Pension Liability in order to save millions of dollars. The City has received calls and inquiries stating that the City Council approved $9 million dollars of new debt. It deserves clarification that there is no new debt being incurred based on the City Council’s recent action, and that it represents a proactive investment by the City Council in our community’s future.
Last modified: December 15, 2020