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Like other agencies across the state, Sun City Fire District officials are struggling to find a solution to the ever growing retirement liability.
Arizona’s Public Safety Personnel Retirement System has seen its obligations underfunded over the past several decades due to lower-than-expected investment returns, unanticipated impacts from benefit increases and adjusted actuarial assumptions, such as life expectancy and population growth. However, pension liabilities are debts that will be paid, if not now, then in the future at a higher cost to taxpayers.
Tim Wilmes, Sun City fire board member, reported in the group’s Jan. 14 meeting the unfunded liability continues to grow. He said Sun City’s tier one and two employees’ obligation rose from 54% of wages to 58%, and tier three employees’ liability went from 48% to 56%.
“The PSPRS actuarial (assumptions) are 7.3% and they are actually receiving 6%,” he said. “We will have to make up the difference.”
Mr. Wilmes briefed the board in general terms during its December meeting and was more specific to Sun City this month. He will make a final report during the board’s next workshop meeting, 9:30 a.m. Tuesday, 11 at district headquarters, 18602 N. 99th Ave.
SCFD officials are making regular payments to address the district’s unfunded liabilities and initially planned to pay it down over 20 years. They later went to a 30-year term. That means the district pays more in interest but less on the principal.
SCFD is not alone in this dilemma.
“Every city and district is in somewhat the same fix as us, but we are a little different because of taking in Rural Metro,” Mr. Wilmess said.
At the time Sun City formed its own department and included Rural Metro employees who were then serving the area for that company, SCFD officials accepted Rural Metro’s unfunded PSPRS liability, according to Mr. Wilmes.
Sun City has the option of putting more funds toward the unfunded liability, but it will make little difference in reducing it.
“If we put $1 million in, it only drops the rate 1.24%,” Mr. Wilmes explained.
David Mann, fire board member, said aside from contributing more toward the unfunded liability, there was little district officials could do. However, Mr. Wilmes said there was another avenue for relief.
“We need to go to the legislators,” he said. “And we will need support from the firefighters’ union.”
Mr. Mann said Sun City officials should also talk to and work together with fire department officials from Phoenix, Tucson and Mesa, as they will be taking large hits because of their increased size. Among other measures, legislators could increase the tax rate cap on fire districts, he explained.
“But it’s easy to see why the legislature doesn’t want to do anything because then they would have to pitch in,” Mr. Mann said.
Rebuilding
Sun City Fire District officials moved from one type of rebuilding project to another.
Officials completed a renovation of the district’s meeting room at the headquarters building. The room was enlarged and audio and video equipment was enhanced. The project was designed to provide larger and more comfortable space not just for board meetings but trainings as well.
“We had a training in here just after it was completed and we had 42 people in here,” Ron Deadman, Sun City fire chief said.
The board also approved spending $15,000 to rebuild its payroll system through Telestaff.
“It does not function like it used to,” he said. “They wouldn’t tell us what was broken until recently, and it was a lot.”
The expenditure will come from the district’s contingency fund.
Rusty Bradshaw News Editor | Sun City &
Sun City West @SunCitiesEditor
Rusty Bradshaw is a 40-year veteran of community journalism, having worked at newspapers in Wyoming, Oregon and Arizona. He has been with Independent Newsmedia 15 years.
Rusty earned a junior college certificate from Northwest College in Powell, Wyoming and a bachelor of science degree from Eastern Oregon University in LaGrande Oregon.
An avid football fan, Rusty also enjoys photography, reading, spending time outdoors and enjoying life with his wife. He also authored three books of fiction, “The Rehabilitation of Miss Little,” “Moist on the Mountain” and "Gorge Justice." Visit www.rustythewriter.org.
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