PSPRS payment from city reserves up for council debate
Total City of Prescott payment this year could exceed $26 million
Upwards of $26 million of city money could go toward pension debt this year, if the Prescott City Council approves an early payment this week.
The council will conduct two meetings on Tuesday, Sept. 12, — a 1 p.m. study session, and a 3 p.m. voting session. Both meetings will take place at Prescott City Hall, 201 S. Cortez St.
The pension debt will be discussed during the voting session, and the study session will include presentations on the municipal golf course, and a large-scale annexation of property into Prescott city limits.
The pension-debt discussion comes in the wake of the Aug. 29 voter approval of a 0.75-percent sales tax to go toward paying down the city’s more than $78 million in unfunded liability with the Public Safety Personnel Retirement System (PSPRS).
Prior to the vote, the council had allocated as much as $11 million of its unassigned reserve fund toward paying down the debt, but had postponed a final decision until after the August vote.
City Manager Michael Lamar said Friday, Sept. 8, that he would be comfortable with putting the entire $11 million toward the PSPRS debt — a move that would leave about $5 million to $6 million in the city’s reserves.
Still, Lamar pointed out that it will be up to the City Council to decide the matter, and Mayor Pro Tem Jim Lamerson said Friday that he expects some debate among the council members.
“I understand the desire not to drain the reserve fund,” Lamerson said, adding that he has yet to decide whether he would support putting the entire allocated amount toward the debt.
Along with the possibility of putting the $11 million toward the PSPRS, the City Council has already decided to put about $1.2 million of reserves toward a refund to PSPRS employees that is required by the recent court ruling in the Parker/Hall lawsuit (which disputed the State Legislature’s 2011 attempt at pension reform).
Also going to PSPRS this fiscal year will be: about $6 million expected to be generated in the first six months of the new 0.75-percent city sales tax (starting Jan. 1); $1.3 million toward the city’s normal pension costs; and $6.4 million in annual payment required to pay down the unfunded liability.
In all, the various payments could add up to $25,972,579.
In addition, the council will consider putting the $25,000 that was raised through sale of the Granite Mountain Hotshot buggies toward the debt. Also, the council voted on Aug. 8 to put the $579,625 raised from the sale of Fire Station 7 and adjacent EZ Street property toward the PSPRS debt.
Lamar said the city expects to get its updated unfunded liability amount from PSPRS in November.
In other action, the council will:
• Hear a presentation on the proposed annexation into the city of property owned by Arizona Eco Development LLC. A city memo notes that the property, which is located northeast of Prescott, would exceed the 250-acre trigger established by Proposition 400, which requires an extended public review process and a cost-benefit analysis.
Community Development Director Tom Guice said the Arizona Eco property is located on both sides of Highway 89A in the Granite Dells area. He added that the exact acreage is still uncertain.
Arizona Eco Development is expected to bring its own water to the project, and has not requested an allocation from the city, say officials. Tuesday’s presentation is intended as an introduction to the project, and Guice said the pending process could take six to eight months.
• Hear an overview presentation on the Antelope Hills Golf Course from Recreation Services Director Joe Baynes and from a representative of Billy Casper Golf, the private-sector manager of the municipal course.
The city entered the management contract in 2014 after years of losses at the golf course, but continues to pay an annual difference between the amount that the golf course generates and the maintenance costs. This year, Budget and Finance Director Mark Woodfill said that would total about $190,000. (The amount is less than the annual losses the city experienced when Antelope Hills was managed by the city, Lamar said, adding that Baynes is expected to have more details on Tuesday).
In addition, the council will consider buying 130 golf carts at a cost of about $700,000. That would add to the long-standing debt the golf course has with the city’s general fund. Lamar said the golf cart purchase would bring that debt to more than $5 million. He added that he expects to take the issue to the council soon for a discussion on how the debt should be handled.
Lamerson said he has long pushed for an economic-impact study to determine how much tourism money the golf course brings to the city. “If you closed the golf course tomorrow, would that be good for the city? The answer is ‘no,’” he said.
• Consider an annual $2,500 Military Appreciation Bonus to active city military personnel to help active reservists who work full-time for the city — to be reviewed annually during the city’s budget process. Lamar said the program would affect about 10 city employees.