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Prescott Council Grapples with PSPRS Unfunded Liabilities
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07 February 2017  

The Prescott City Council agreed to hold weekly meetings in an effort to come to consensus regarding the issues surrounding Public Safety Personnel Retirement System (PSPRS).

Last week, the Council held three meetings on PSPRS. This week, only one meeting is scheduled. It's all part of their agreement to meet weekly to discuss PSPRS until a decision is made finalizing the way forward to managing the unfunded $82M in liabilities. 

How did the City of Prescott end up in such a deep financial hole? That was the topic of the standing-room-only Town Hall held at the Adult Center on Saturday. With close to 200 people in attendance, Mayor Oberg, Leonard Gilroy of the Reason Foundation and City Manager Michael Lamar reviewed the history and the current status of the PSPRS situation for the  City of Prescott. After the presentations, time was reserved for Q&A. 

Each of them presented information available for download here: 

Mayor Harry Oberg’s Presentation:  PSPRS, The Elephant in the Room

Leonard Gilroy’s Presentation:  PSPRS Pension Reform Overview

City Manager Michael Lamar:  Increasing Prescott’s Efficiency and Effectiveness in Public Safety Service Delivery

Watch the entire Town Hall meeting: 

Council will hold the next meeting Tuesday at 3 PM in Council Chambers. One thing that is expected to be included amongst the topics is the sale of property. 

How things stand now:

  • Important to distinguish between “debt” and “liability” - this is an unfunded liability, not a debt
  • The City has made their payments to PSPRS as required on a timely basis
  • The Council voted to put a sales tax initiative on the ballot in August
  • The Council is looking at paying down the debt using money in reserve, and possible inter-department loans, before asking for a sales tax
  • The Council has reviewed 14 options, eliminating some, focusing on others
  • The Council has decided to look closely at assets they could sell
  • The Council will not pursue bankruptcy
  • The Legislature does not have a solution pending in this session, and cannot be counted on to help

Decisions to make:

  • How much of a sales tax, for how long? 
  • What will be the purpose of the sales tax? Some want to use it as a dedicated funding source for Public Safety, others to only pay down the liability.
  • Are there real estate and other assets the City could sell? What are they, and how much will they bring in? What will the money be used for?
  • Are there services that can be privatized? Can volunteers be utilized more?

Options

These are the options considered by Council members. Some were eliminated. The red items in the list below are the ones still under consideration:

Several members of the public spoke at the Town Hall in addition to Mayor Oberg, Gilroy and City Manager Lamar.

Lynne LaMaster

Lynne LaMaster is the Founder and Editor of the eNewsAZ Network of websites. She asks a lot of questions! In her spare time, she loves photography, cooking and hanging out with her family.