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Case Study: North County FPD of Monterey County- UAL Refinancing

Updated: May 26, 2023

The North County Fire Protection District of Monterey County (the "District") issued a $10,794,000 Series 2022 Taxable Revenue Bonds for a CalPERS UAL Prepayment Project. The transaction was completed to refinance a portion of the District's outstanding unfunded accrued liability ("UAL") associated with the District's pension plans.

Transaction Highlights

The District's Board of Directors authorized the UAL Prepayment Project in the form of a public offering in December 2021. From December 2021 to March 2022, Weist Law fully prepared all required ratings presentations, reports and documentation, including a full Official Statement, to carry out the refinancing on a publicly offered basis. During that same time period, interest rates continued to rise due to the lingering effects of Covid-19, significant inflationary pressures, fed rate hikes and the outbreak of war in Ukraine.

The team at Weist Law felt it was their fiduciary duty as Bond Counsel to reconvene with the District's Board to discuss the recent market headwinds and generate a strong financing strategy to withstand volatility. Weist Law attended several in person board meetings to give market updates and warned of the corresponding decrease in expected savings. The financing team, made up of Bond Counsel, Municipal Advisor and Underwriter, worked together to quickly create a back up plan for the issuance.

The team reached out to several banks that regularly invest in municipal debt obligations to get their indicative rates. One bank in particular that Bond Counsel works with frequently, was able to offer a December 2021 rate and even slightly sweeten their offer to 3.2% for a 20-year term. The Board approved the switch from a public offering to a private placement process and accepted the bank term sheet for a 20-year term at a 3.20% rate.

Successful Outcome

  • The transaction resulted in total projected cash flow savings to the District of approximately $3,580,000 and as importantly reshaped 23 years of escalating payments to level debt service payments over the 20-year term of the 2022 Obligations.

  • 50% of the Savings are being sequestered into a 115 Trust to further stabilize District's Pension Plans pursuant to the Pension Management Policy developed by Weist Law and CalMuni Advisors.

  • Due to an innovative Net Revenue pledge structure, the District was able to achieve a 20-year taxable interest rate of 3.20% (even during a highly inflationary period).

  • The Financing Team was able to achieve a favorable interest rate in the midst of rapidly rising interest rates (rates had increased to over 4.20% at the time) and quickly "pivot" the financing structure in the best interests of the client--all within a span of less than 45 days. This "pivot" resulted in additional savings to the District of approximately $1million over what would have been achievable otherwise.


The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact a designated Weist Law representative. This material may be considered advertising under certain rules of professional conduct.

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