Fort Bragg clears bonds to repay CalPERS debt – Fort Bragg Advocate-News


On October 12, Fort Bragg City Council authorized the sale of rental bonds to raise $ 11 million. The funds raised have two proposed objectives: to restructure Fort Bragg’s debt with CalPERS and to acquire the southern part of the plant site. Although the board has voted to go ahead with debt restructuring, it has yet to make a final decision on acquiring the southern plant site.

Last week, the city had a credit scoring presentation with Standard and Poor’s. The city will obtain a credit rating from the General Fund in the coming weeks; after that, the city can begin the process of marketing rental income bonds.

Once the bonds have been sold and the income generated, the board will deal with CalPERS debt. CalPERS is the California public sector employee retirement agency. Many cities in California have refinanced their CalPERS debt in recent years because it represents a large portion of many city budgets.

Currently, Fort Bragg owes CalPers $ 11 million, with an interest rate of 7%. However, due to CalPERS 2021’s discount rate, that number is expected to soon be between $ 8.4 million and $ 9.8 million. The Council will allocate $ 7.5 million of the proceeds of the bonds to this debt.

With a General Fund credit rating, the city can restructure this debt and swap it for new debt at a lower interest rate. With interest rates at historic lows, the town hall hopes to obtain a loan at less than 3.5%.

There are tentative plans to use $ 3.5 million of the funds raised to acquire the South Georgia Pacific plant site; However, this met with resistance from Mendocino Railway, the owners of the Skunk Train. Mendocino Railway is currently trying to acquire the plant site for development, filing a prominent domain lawsuit against Georgia Pacific for the site.

Mayor Bernie Norvell specifically did not want to agree to authorize the bonds if they were related to the purchase of the Mill Site South.

“I don’t think we have enough information to address some of these concerns in our community,” Norvell said. “We don’t have an agreement with Georgia Pacific. We did not force the people of Fort Bragg to buy the property.

If the city chooses not to acquire the Mill Site South, it has other options for the $ 3.5 million, such as upgrading broadband, solar, microgrid or water systems. The city can even repay the $ 3.5 million without penalty, as the new restructured loan will have no penalty for prepayments.

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