Prescott to pay $20M toward pension debt
The City of Prescott is expected to add about $20 million more in payments toward its public safety pension debt in the next fiscal year — on top of the $25 million it is paying this year.
The payment is included in a preliminary 2018/2019 city budget, and will be among the points that the Prescott City Council is scheduled to discuss during a budget workshop at 9:30 a.m. Tuesday, May 22.
The workshop will precede two other council meetings — a 2 p.m. closed-door executive session, and a 3 p.m. regular voting session. All three meetings will take place at Prescott City Hall, 201 S. Cortez St.
City Manager Michael Lamar said city staff will be presenting a preliminary budget to the council Tuesday that will include paying the $8.2 million “annual required contribution” to the Public Safety Personnel Retirement System (PSPRS) from the city’s general fund.
In addition, the city will pay about $12 million in projected revenue from the three-fourths-percent sales tax that voters approved in 2017, and went into effect in January 2018.
In all, the city expects to pay about $20.3 million toward the PSPRS debt in the coming 2018/2019 fiscal year.
Lamar noted that it has been the clear direction of the City Council to continue to pay the PSPRS’s annual required contribution from the general fund, on top of the sales tax amount. “We’re going to continue that as long as possible, because that’s what the council wants,” he said.
The annual required contribution for the coming year consists of about $1.3 million in “normal pension cost” for the system, along with nearly $7 million that the PSPRS requires to go toward the city’s unfunded liability with the pension system.
The annual required contribution was debated during the lead-up to the August 2017 sales tax vote, with some members of the public voicing fears that the city would use the general-fund money that had previously gone toward the annual contribution for other city costs, and allow the sales tax revenue to cover the annual requirement.
The three-fourths percent sales tax is slated to run until the city’s $86.4 million unfunded liability with the PSPRS is within $1.5 million, or until Dec. 31, 2027 — whichever comes sooner. Council members have maintained that the city should continue to pay as much as possible each year to get the debt paid off before the 2027 date.
The budget workshop will also include a report on the general sales-tax revenues of the city, which Lamar said are up about 6 percent this year.
Overall, the city’s budget is projected to be up about 1.3 percent for the coming year — from $188.8 million this year, to $191.3 million next fiscal year.
Lamar said the proposed budget includes 2.25 new staff positions: a school resource officer, for which the Prescott Unified School District will pay 75 percent of the cost; a city court employee; and one-quarter time school liaison officer.
In other action, the council will:
• Consider a $28,000 contract with the National Golf Foundation to do an economic impact/benefit analysis of the municipal Antelope Hills Golf Course.
• Consider increasing city employees’ annual paid time off maximum accrual amounts.
Follow Cindy Barks on Twitter @Cindy_Barks. Reach her at 928-445-3333, ext. 2034, or email@example.com.