FLORENCE, Ariz. (AP) - Pinal County in southern Arizona needs almost $75 million more to cover its public safety pensions, which its Board of Supervisors will consider financing with a bond.
A bond issue would save the county about $40 million in today’s dollars, financial adviser Mark Reader told the Board of Supervisors Wednesday.
The board held a public hearing on the debt Wednesday and was scheduled to meet on Oct. 16 to consider the bond resolution, the Casa Grande Dispatch reported.
Reader said there is incentive to sell the bonds before the Nov. 3 general election, which could adversely affect interest rates. Reader told the board that rates are currently favorable, with the county likely to receive a rate of about 3% as opposed to the 7.3% annual rate the county now pays.
Reader said another option is a tax increase for residents, which none of the supervisors were willing to discuss.
Most of Pinal County’s unfunded liability is for Sheriff’s Office pensions, which are just over 50% funded. The county is more than $59 million short on those pensions. Detention officers are almost 70% funded, with the county needing to pay over $14 million more. Dispatchers’ pensions are almost 60% funded, with the county owing more than $1 million.
Currently, the county is paying off its debt by effectively borrowing from the Arizona Public Safety Personnel Retirement System, Reader said. This cost will continue to grow and opens the county up to the risk of increased liabilities and volatility, the financial adviser said.
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