By Peter Aleshire for Payson Roundup
Gila County is seeking a bond issue to pay off a $15.6M debt to the state retirement system for sheriff’s deputies, detention officers and dispatchers, Supervisor Woody Cline told the Payson Tea Party during a recent campaign appearance.
Cline said the bond issue would allow the county to finance its current estimated debt to the Public Safety Personnel Retirement System at less than 3 percent annual interest — much below the 7.3 percent interest the retirement system is currently charging the county to cover the estimated unfunded balance.
The bond issue could save the county $7M over the next 15 years, he said. County manager James Menlove told the Roundup the savings was around $10M.
“This is not a debt we created, it is due to state action,” Menlove told the board at a public hearing on the issue.
“You’re not alone,” said Mark Reader, managing director of Stifel, a brokerage and investment banking firm in Phoenix, which helped the county secure financing for its capital investments/improvement projects last year.
“Statewide, municipalities and counties owe $11B,” he said.
Reader and the county staff explored several financing options and considered an Excise Tax Revenue Obligation the best option in which the county obligates a variety of non-property taxes to secure the bond. Seeking a $15.2M bond, the county would deposit $14.7M into the pension funds of the GCSO, detention officers and dispatchers.
Menlove said the process should be complete before the end of October.
The retirement system for public safety officials toppled into a giant hole during the last recession. The separately run retirement system had devoted any stock market returns above 12 percent to increasing benefits during the boom years, but then faced a huge deficit when the stock market crashed in the recession.
The courts threw out several efforts to reform the system that allows police and firefighters to receive lifetime, inflation-adjusted retirement benefits after 20 years, even if they continued working or even took a second job within the system. The voters ultimately adopted a constitutional amendment that reduced benefits for those hired after 2018, but left intact the obligation to those hired earlier.
Counties, cities and the state are now paying roughly 60 percent of each officer and firefighter’s salary into the state retirement system. Payson owes about $12M, noted Payson Councilor Jim Ferris, who attended the Tea Party meeting along with about 25 other people.
Cline also offered an update on millions of dollars in county construction, including a major shuffle of county office space and a big expansion to allow for holding jury trials and more court space in Payson. Currently, the county court facility in Payson is so cramped that the Superior Court must hold all its full jury trials in Globe.
Once the smoke clears on the shifting of county offices, Cline said he suspects the county can sell 27 acres it owns on the north side of the highway next to Gila Community College. The property’s just across the highway from the 254-acre parcel on which the MHA Foundation and the Rim Country Educational Alliance had hoped to build a university and related facilities.
Read more at Payson Roundup.