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Case Study: Arcata Fire Protection District - UAL Refinancing

Updated: Sep 11, 2023

Arcata Fire Protection District Logo
The Arcata Fire Protection District issued the $4,750,000 Series 2021 Taxable CalPERS UAL Prepayment Project. The transaction was completed to refinance a portion of the District’s outstanding unfunded accrued liability (UAL) associated with their CalPERS Safety, Safety 2nd, and Miscellaneous Pension Plans.

Transaction Highlights

The refinancing transaction was successfully structured 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 very difficult and/or very 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, (iv) shortened the repayment period from 23 years to 15 years, and (v) automatically increase the District’s debt service coverage ratio (because pension costs are treated as M&O, but when financed are moved “below the line” to debt service secured by Net Revenues).

Successful Outcome

  • The transaction resulted in total projected cash flow savings to the District of approximately $1,792,656 and as importantly, reshaped 23 years of escalating payments to level debt service payments over the 15-year term of the 2021 Obligations.

  • Due to a unique Net Revenue pledge structure, the District was able to achieve a 20-year taxable interest rate of 2.74%.

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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