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Case Study: Oceano Community Services District - UAL Refinancing

Updated: Sep 11, 2023

In June 2021, The Weist Law Firm (Weist Law) served as sole bond counsel for the Oceano Community Services District’s issuance of $906,000 Series 2021 Taxable Revenue Obligations (CalPERS UAL Prepayment Project), issued to refinance the District’s outstanding unfunded accrued liability (UAL) associated with their CalPERS “classic” Miscellaneous and Fire Safety Pension Plans.

Weist Law, as Bond Counsel, along with California Municipal Advisors LLC (CalMuni Advisors), as Municipal Advisor, worked with the Oceano Community Services District to provide in-depth analysis of the District’s pension plans and the various mitigation strategies for each of the plans.


Weist Law successfully structured the Refinancing to mimic a standard Net Revenue pledge structure with industry standard rate covenants and parity debt provisions (unlike pension obligation bonds which do not have parity bond tests, etc., which can make future financings difficult and expensive). The effect of the Refinancing was to (i) allow UAL pension costs to be financed at best possible interest rates, (ii) allow for future financings at best terms, (iii) move the financed UAL pension cost from maintenance and operation expenses to debt service on parity with all other outstanding parity debt, and (iv) automatically increase the District's debt service coverage ratio (because pension costs are treated as M&O, but when finances are moved "below the line" to debt service secured by Net Revenues). The graph below depicts the before and after effect of the Refinancing.


The transaction resulted in total cash flow savings to the District of approximately $334,000 and as importantly, reshaped escalating payments to level debt service payments over the 15-year term of the 2021 Obligations and accelerated the pay off of the liability by nine years.

Due to a unique Net Revenue pledge structure, the District was able to achieve a 15-year taxable interest rate of 3.5% which equates to a 2.3% tax-exempt rate with total costs of issuance of less than $76,000.

For a downloadable version of this Case Study, click here. If you are interested in learning more about this, or any other transaction completed by Weist Law, contact us at


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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