Could be a wash whether we bank the money with CalPERS or use it to pay off outstanding bonds or invest it on interest-bearing assets in the general market. Sort of like using your surprise Christmas bonus to pay down your mortgage or pay off your Visa card or keep it in your savings account for immediate access. Appears that we are forecasting a 2.40% yield on any positive balance while maintaining safety and liquidity. Don't know the effective return on the alternatives, but if we credited it all into future pension liability, we'd probably lose a bunch if we wanted it back out again. Delayed gratification is a hard sell when we see projects delayed past our life expectancy.

Posted by musical, a resident of Palo Verde

>> Could be a wash whether we bank the money with CalPERS or use it to pay off outstanding bonds or invest it on interest-bearing assets in the general market. Sort of like [... perfect example ...]

I understand your example perfectly, but, from a family or public financial-management point of view, psychologically, sometimes the best approach from a purely spreadsheet point of view isn't the best way for people to understand. From the public policy point of view, I think it is more understandable and credible if the "accounts" are kept separate. That is why I would like to get city salaries correctly forward-funded. It makes it easier to understand whether or not we can afford to buy that signature bicycle bridge, or, not.

e.g. Bond measures should be used for public infrastructure which has a provably long lifetime, e.g. school buildings. Using bonds for IT purchases and other classroom "equipment" is, IMHO, dumb, because that stuff is subject to constant change and updating and fads and fashions.

Salaries and benefits are the trickiest item, but, IMHO, finding a way (e.g. through CalPERS) to keep accounts current makes it easier to understand whether or not we can afford those new hires, or, a pay raise, or whatever. So, I think it is better to pay as you go, even if the spreadsheet says to pay off the bonds first (for example).