Friday Catchall: Paying pension debt now or later?
The Friday Catchall:
• CHANGING STANCES? — It is a little confusing to say the least when candidates or elected officials cross back and forth on issues. When it comes to the City of Prescott’s pension debt (unfunded liability) it has gone something like this:
Just prior to the Aug. 29 vote, in a visit to the Courier offices, Mayor Harry Oberg reiterated his opposition to Proposition 443. At the same time, some in the community had heard the city had a portfolio of as much as $123 million in enterprise funds.
Oberg said the city loaning from reserves to itself could be of interest for the council after the election — a plan B of sorts. Yet, on Tuesday, when the City Council approved an $11 million payment from reserves — to help pay down the debt — Oberg called for restraint.
So what changed?
Oberg told me this week, “I don’t think there’s any interest on the council borrowing from the enterprise funds. That’s off the table for now.”
As for the $11 million, “A majority of the council saw it as keeping a promise to the community.”
The mayor was concerned though. Apparently, the PSPRS (Public Safety Personnel Retirement System) has done poorly in the investment markets during the past two recessions, and “even though we have reserves, that’s our rainy day fund, if a recession were to hit,” Oberg said, adding that the PSPRS could have problems again, and the city may need its reserves and, like during the Great Recession, the city could see a reduction in sales taxes.
That’s why he wanted to send $5 million now and more later. “There’s enough uncertainty to give $5 million now, then maybe in the spring the remaining amount.”
Still, as long as the City Council has approved the $11 million from the rainy day fund, the city should send that and its budgeted $7.8 million payment together, now, for a mass payment of $18.8 million, Oberg said Wednesday.
It would be like doubling up on your mortgage — a regular payment and more to go against principal.
One challenge exists, however. We won’t see the results from these payments soon, Oberg said.
The report from PSPRS the city is expecting in November is based on 2016 actuarials. And, while in 2017 PSPRS has reported about 12.6 percent in earnings, how that — as well as the city’s payments — affect unfunded liabilities will not be known, seriously, until November 2018.
That sounds like cooking in the dark.
You can feel your way around, but don’t know if you are making eggs over easy or an omelet.
• MVD — Long lines at the Motor Vehicle Department have always been common. Apparently that is changing, with a reorganization of the MVD as well as competition from private businesses that provide the services too.
It could not happen soon enough for Mary Rekfels of Prescott. She noticed the changes and told me, “I hate long lines, and now they’re (MVD) doing it a lot better.”
Watch the Courier for an explainer article on all of this.
As for the lines, I never really minded — if you knew when to go. For me, 7 a.m. on Monday was always the answer, except for near the end of the month (when everyone is trying to get things done).
• PICK OF THE WEEK — (Proving there’s always something good to do in the Prescott area that’s cheap or free): For something different, check out the “Lobby Hero,” on stage at Prescott Center for the Arts’ Stage Too! It continues Sept. 16, and 21-23 at 7:30 p.m.; and Sept. 17 and 24 at 2 p.m. 928-445-3286 or pca-az.net.
Follow Tim Wiederaenders on Twitter @TWieds_editor. Reach him at 928-445-3333, ext. 2032, or email@example.com.