The Formal City Council Meeting last Wednesday passed a bill that may place the city of Phoenix in debt.
The request to pass the Public Safety Personnel Retirement System plan to increase to amortization period from 20 years to 30 years was passed unanimously by council. “By passing this bill, the city of Phoenix gets some freedom in their budget spending,” said City Manager, Ed Zuercher. “We need to find a way to pay pension for our police officers and firefighters.” Chief Financial Officer, Denise Olson, said, “This bill allows us to establish a pension reserve fund, it will stabilize services and sustain programs while maintaining 3,125 police officers and 1,615 fire fighters.”
“Phoenix could fail at some point and by continually adding debt, people in the future will never recover from it,” said Councilman Sal DiCiccio. “There are multiple options, my preference would be to just start paying our pension down.” According to the city council agenda, this bill “allows employers who contribute to PSPRS, like the City of Phoenix, to make a one-time request to the PSPRS Board of Trustees to increase the amortization period from 20 years to 30 years.”
Jeff Barton, City of Phoenix Budget and Research Director, said, “We’re here today because of the pressure our budget has been facing and Governor Ducey signed this legislation to alleviate the rising pension struggle.” According to Vice Mayor Laura Pastor, this bill needed to be passed by council to meet deadline, but there is further discussion to be held about the concerns of this bill. Vice Mayor Pastor said, “There is a pension reserve fund, and that is intended to pay down the pension.”
“We do support the reamortizing to the 30-year plan, it’s a yin and yang situation,” said President of the Phoenix Law Enforcement Association, Ken Crane. “But we realize by doing this it will give the city some financial breathing room.” City council members said it was necessary to pass this bill to meet a deadline and they will be coming up with more ideas to address in the fall.
“This isn’t as simple as we’d like…I do like the flexibility of this option, and if we find another solution we can pay this off and not hang in there for 30 years,” said Councilman Daniel Valenzuela. “This isn’t the most popular decision, and who would want to extend debt? But it’s not that simple…this is a time for problem solvers and so we have to solve this problem, and today, this is the best option” Vice Mayor Pastor and other members of council agreed in meeting for review of this bill and returning to a council meeting in the fall with a revised plan of action.