Santa Barbara County Grand Jury
• 2020-2021
• Agency Response
LCC*
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 1 findings
F2
Section 115 Trusts, Pension Obligation Bonds, and Pension Reserve Funds can be effective mechanisms to protect cities from dramatic impacts to the financial markets or declines in General fund revenues. Lompoc's Response to Finding 2: Agree. While Lompoc agrees that Section 115 Trusts, Pension Obligation Bonds, and Pension Reserve Funds can be effective mechanisms, the city also recognizes that each of those mechanisms carry inherent risks and should be thoroughly evaluated for long-term efficacy and adherence to the city's risk policies.
Related Recommendations (1)
R2
That each City Council and the Santa Barbara County Board of Supervisors study and determine by June 30, 2022, whether a Section 115 Trust, Pension Obligation Bond, or Pension Reserve Fund would be an effective hedge against risks to their pension plans for their city. Lompoc's Response to Recommendation 2: Will be implemented. The City Council received a presentation and discussed the potential effectiveness of Pension Obligation Bonds during the March 17, 2021, special City Council meeting. Lompoc's City Council was advised by staff that the risk, coupled with the timing of the investment market, would make a pension obligation bond an ineffective hedge against risks to the city's pension plans at this time. By June 30, 2022, the City Council will consider and determine whether a Section 115 Trust or a Pension Reserve Fund would be an effective hedge against risks to the city's pension plans. Sincerely, Jenelli A Spore /Jenelle Osborne, Mayor City of Lompoc
Additional Recommendations 1
These recommendations are not explicitly linked to specific findings.
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R1That each City Council and the Santa Barbara County Board of Supervisors develop and publish a comprehensive plan by June 30, 2022, addressing their pension plans and how they intend to properly assure future obligations are paid when due, without impacting the timely delivery of essential and promised services to residents. City of Lompoc's Response to Recommendation 1: Has been implemented. Throughout calendar year 2019, Lompoc invested considerable time and dedicated discussion at multiple budget workshops to evaluate and analyze the city's future pension obligations. As explained in the responses to Findings 1b and 1c above, those discussions ultimately resulted in Lompoc's Measure I2020 1% sales tax, which was approved by voters in March 2020 and enacted on July 1, 2020. Lompoc subsequently enacted the 15-year Fresh Start payment plan of its unfunded accrued liability in July 2020. Taken together, those actions addressed how Lompoc will assure that future pension obligations are paid when due, without impacting the timely delivery of essential and promised services to residents. Furthermore, this comprehensive plan, which addresses both the UAL and the ability to continue to provide expected levels of service to the residents of Lompoc, was included as a core component in Lompoc's FY 2021-23 Biennial Budget that was adopted by the Lompoc City Council at its special meeting on June 15, 2021. The FY 2021-23 Biennial Budget Book was published on June 29, 2021, and is available on Lompoc's website. (Date) Grand Jury Report - "Pensions in Santa Barbara County Require Vigilance"
* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.