Lake Havasu City to mull borrowing to pay down pension debt
LAKE HAVASU CITY, Ariz. (AP) — Officials in Lake Havasu City are considering borrowing up to $13 million to help pay for pensions for public safety employees.
Today’s News-Herald reports that the request for debt financing will be considered at Tuesday’s City Council meeting.
City Manager Charlie Cassens told council members in October that the city needed to pay about $12.6 million in debt issuance to Public Safety Personnel Retirement System, which manages pensions for retired police and fire employees in Arizona.
The pension issue has become a hurdle because of a 2016 accounting change that required cities and other local government agencies to count unfunded pension liabilities on the books as outstanding debt.
Havasu’s public safety pensions are currently a little more than 40 percent funded, which means retired employees will still get their pension payouts, but if every public safety employee were to immediately retire, the city wouldn’t be able to pay their pensions.
The city hopes to finance the $12.6 million to pay down the debt and move closer to the goal of having pensions funded at 80 percent — a benchmark for judging the health of pension accounts.
In all, the city owes about $60 million to the retirement system.
Information from: Today’s News-Herald, http://www.havasunews.com