Under the plan, the city will pay $10.3 million a year for 17 years, ultimately paying $75.1 million in interest, according to an Epoch Times news report. Local lawmakers still have to approve the legal papers necessary for the underlying bond transaction.
Sanders proposed the measure last week as a part of his plan to reduce the pension shortfall – estimated to be at least $1.4 billion.
The news report said that several other plan elements, such as the sale of city property, will have to wait until the city issues three overdue annual financial audits and completes an inventory of its real estate holdings. Until the annual audits are released, the city can’t borrow money from the bond market at a competitive rate.
The mayor’s plan is strikingly similar to one proposed by former City Manager Lamont Ewell last September (See SD Lawmakers Explore Funding Alternatives ). Ewell wanted to put $600 million into the pension fund, but was blasted by City Attorney Michael Aguirre, who argued that following Ewell’s plan would cause the city to incur vast additional pension obligations.