Huntington Beach

Pension bonds go before council

HUNTINGTON BEACH CIVIC CENTER (Orange County Tribune photo).

The sale of taxable pension obligation bonds to reduce or eliminate the city’s unfunded pension obligations will go before the Huntington Beach City Council when it meets in virtual session on Monday,

Pension obligation bonds – commonly called a POB – are a widespread but controversial way to deal with mounting pension debt. According to an article in “Governing” magazine, a city can use a POB to borrow against future tax revenue, then invest the proceeds with the expectation that there will be a higher return than the interest rate on the bond.

The Government Finance Officers Association has taken the stand that “state and local governments should not issue POBs” because they “involve considerable risk.”

City Manager Oliver Chi supported the use of POBs when he was City Manager of Monrovia. The city council there adopted the use of the bonds starting in 2018 as part of a larger package of financial measures intended to improve that city’s fiscal health.

Also on the agenda are a discussion – in closed session – of the recruitment/appointment of a police chief and adoption of permit fees for short-term rentals.

A study session is scheduled at 4 p.m., followed by a closed session. The public session is to commence at 6 p.m.

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