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The Prescott Daily Courier | Prescott, Arizona

home : latest news : local September 30, 2014

1/11/2013 9:58:00 PM
Prescott advocates changes in state employee pension systems
Cindy Barks
The Daily Courier

PRESCOTT - A fear that rising employee retirement costs are putting the community "in harm's way" has the Prescott City Council pushing for pension reform.

With the news that the city's contribution to state retirement systems would increase by about $540,000 in the next fiscal year - on top of last year's $400,000 increase - the council approved a State Legislative agenda this week that pushes for state action to achieve "appropriately funded public employee retirement systems."

Although they did not get specific about what those reforms should include, officials say the escalating costs for employee retirement systems are taking too big a bite out of the city's budget.

"Every time we get a bill like this in the mail, that is $540,000 on our bottom line," Councilman Steve Blair said. "These types of things put a community in harm's way."

Central to the issue are the increasing percentages that the city is required to pay toward the state retirement systems for public safety employees.

Projections for the coming fiscal year show that Prescott likely will be paying retirement contributions that equal about 43 percent of each of its 66 firefighters' base salaries - up from 34 percent last year. That amounts to an annual average cost for the city of $23,991 for each employee, at a total of about $1.6 million.

For its 71 police officers, the city will be paying 44 percent of the employees' base salaries, as compared to last year's 41 percent. For each police employee, the city cost averages $25,272 per year - a total of $1.8 million.

The city's percentages are considerably higher than the public safety employees' contributions, which will total 10.35 percent of salaries for both police and fire employees.

When compared with the previous year, the city's totals for the coming year amount to a $348,000 increase for fire, and a $114,000 increase for police.

Because different categories of public employees have separate retirement systems, the city also will pay an estimated $2.2 million to the Arizona State Retirement System (ASRS) for its 368 other employees. That is up $78,000 from the previous year.

In the ASRS category, the city and employee percentages are equal - at 11.54 percent each.

The city's retirement contributions for the coming fiscal year are expected to total about $5.6 million.

Budget and Finance Director Mark Woodfill said retirement costs make up about 6.5 percent of Prescott's operating budget for the current fiscal year.

City records show that the employer's share for public safety employees has increased sharply in recent years.

For police employees, the city was paying about 28 percent of employees' salaries in fiscal year 2010 (compared to the employees' 7.65 percent).

In 2011, the city's contribution for police employees went up to 30 percent, while the employees' level stayed at 7.67 percent. During fiscal years 2012 and 2013, the city's share increased to 35 percent, and 41 percent, respectively, with employees' percentages increasing to 8.65 percent and 9.55.

The fire contributions show a similar rise, with the city's share increasing from 26 percent in 2010 to the expected 43 percent in the coming fiscal year.

Increases in the system for the remainder of city employees have been less dramatic, increasing from a city share of 9.4 percent in 2010 to the projected 11.54 in the next fiscal year. Throughout the past five years, the employer and employee percentages have been equal.

Deputy City Manager Alison Zelms said the city's contributions for the public-safety retirement systems are based on Prescott's actual experience.

Actuarial reports on the Public Safety Personnel Retirement System of the State of Arizona's website shows that the number of active employees in Prescott's police and fire departments is only slightly higher than the number of retirees.

For the 2012 fiscal year, the actuarial report shows that Prescott Police had 67 active employees and 56 retirees. In fire, the active employees totaled 55, while the retirees totaled 48.

That is in contrast with most of the larger Arizona communities, which have considerably more active employees than retirees. In Glendale, for instance, active police employees totaled 378 in fiscal year 2012, while retirees totaled 158. In fire, Glendale had 215 active employees and 77 retirees.

Zelms acknowledged that a number of factors have affected the pensions costs in recent years, including the state of the stock market. And, she emphasized that Arizona is not alone in its issues with employee pension programs.

"This conversation is happening nationwide," Zelms said. "There's not a simple answer. Our goal is to let our legislators know that this is a large cost for the city."

Arizona House Speaker Andy Tobin pointed out Friday that the Legislature already made substantial changes to state pension systems through 2011's Senate Bill 1609.

"The idea was to have (employees) contribute more, and we tried to control the double-dipping," Tobin said, referring to instances where retirees were getting a pension and were working at other jobs in government.

While maintaining that the bill has helped, Tobin said the degree of reform is limited by a number of factors.

"Oftentimes, a lot of these things are driven by the courts," he said. "These are public pensions that are protected by the Constitution. It is very hard to chip around the edges."

City officials acknowledge that a number of changes have occurred in the state pensions in recent years, but they say many of the adjustments were intended to affect prospective employees, and are having little effect on the current situation.

Tobin said he was happy to hear of the city's interest in the issue, but he suggested local officials get more specific. "They can't just say, 'we want reform,'" he said.

Meanwhile, City Council members say the expected cost increase in the coming fiscal year likely will affect city services. "When we go into the budget, we have to be leaner than we were before," said Councilman Jim Lamerson.

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Reader Comments

Posted: Tuesday, January 15, 2013
Article comment by: Just Curious

I'm just wondering if everyone that is complaining about the amount the public safety personal make, actually know.

If you don't know, maybe you should do a little research and find out. I think you will be surprised.

Posted: Tuesday, January 15, 2013
Article comment by: @ Allison Zelms

When a group of leaders keep a head greenskeeper and two assistants just to produce negative numbers -- The legislators shouldn't really give a damn . If Alison Zelms wants any kind of positive recognition, maybe starting with unnecessary waste at the upper level . Otherwise any kind of statement from Deputy Manager is just blather .

Posted: Tuesday, January 15, 2013
Article comment by: Hooty Hoo

Why these cities continue to provide these juicy defined benefits programs is beyond me. Federal employees get an up to 5% matching IRA-like plan. They can get 1% of their ending salary per year they worked upon retirement. So after 20 years they get 20%. The firemen and cops have a deal and a half, and it's breaking the cities. They should stop it ASAP.

Posted: Tuesday, January 15, 2013
Article comment by: @@ Killing Us

You can't do math bro, or read, or speak............

Posted: Tuesday, January 15, 2013
Article comment by: G Man Kolibosky

The high Prescott firefighters pension rates required by the State to be paid by cities are unbelievable. Apparently the Phoenix and Tucson unions run the show. Seriously required pension contributions in the 40% range? In the next life I want to be a Prescott fireman. Paid to be prepared but infrequently actually extinguish fires. Trade work shifts to firefighters making less, do not pay them and keep your job? Only in Prescott. The firefighters pension rates should mirror regular Prescott employees pension rates. In this economy if there is an inadequate number of job applicants, pay a higher base salary and do not increase the back end obligations. The time has come to seriously discuss closing the library a couple of days a week or reducing library operating hours to cut expenses. Elizabeth R. will probably huff and puff but a solution must be found. Possibly the order for one of the two recently ordered $500,000 plus each new Prescott fire engines could be cancelled and replaced with one ambulance. Anyone have ideas on how to come up with the funds required by law? Guess how much the rates will increase in 2015? Probably will break 50%.

Posted: Monday, January 14, 2013
Article comment by: @ Prescott Native #2

You picked the city life enjoy it . I can't really say to much on such a heartbreaking story, courier will omit . But I have never needed to join for a working opportunity .

Posted: Monday, January 14, 2013
Article comment by: @ just my thoughts

To just my thought . You can't really answer he or she now can you . You would never make it in todays private sector . Better keep the city gig . It must be rather uneasy having to eat all the city crap knowing there is not much else .

Posted: Monday, January 14, 2013
Article comment by: @ just my thoughts

To start, you must pass a written test, and a physical fitness test which usually weeds out approximately half the applicants. Then you must complete an oral review board. If you get this far you are then required to pass a background check, phyciatric exam, medical exam and polygraph test. If all of these sections are passed, and you are hired, then you are required to attend an 18 week academy. After this you then are part of a 12 week field training program, and then are a probationary officer for 1 year.

Once all these requirements are met, you then have to continually attend training, shooting qualifications, and physical fitness tests, just to name a few of the annual tests / training. Also with this career you have to work shift work, which is taxing on yourself as well your family. Days off are often lost to court, defense interviews, and training.

I know that this is a career that I chose, and realized that I had to make certain sacrifices for this thankless job. I work with great people and the job can be rewarding at times. The problem is what was promised, when I signed up for this job is dwindling away quickly under this current management. Many of the public safety employees will leave, and this is what will "harm" the community.

For those who say that this is just Prescott, and the public safety employees donít have to deal with much, you are ignorant and are living a sheep like existence.

By the way it is a 25 year retirement now, and three of my coworkers have been shot in the line of duty. Have a great day!

Please apply, we need the help!

Posted: Sunday, January 13, 2013
Article comment by: to @just my thoughts

So, are you one of the whiners? Why don't you tell us what makes you so qualified that you are better than others.

Posted: Sunday, January 13, 2013
Article comment by: Prescott Native (Part 2)

Working in Public Safety here is an honor, but daily we risk: being shot (and yes it does happen and has), killed, injured, Hep C, HIV, TB, having feces, spit, blood and urine upon your uniform, completing reports and attending court when you are off and should be getting some sleep. Last but darn sure not least, the average life span for a retired Officer/Deputy is 7 years after leaving the job.
This leaves me with 2 thoughts to share: Don't sweat the retirement cuz we will be dead soon or feel free to join up and help out. Years ago it was normal to have a 100 apps, now it is 10.
Feel free to quit complaining or fill out an application.
Good day Prescott.

Posted: Sunday, January 13, 2013
Article comment by: This isn't LA they are taking advantage

Come on, Prescott isn't LA. While I appreciate our law enforcement and emergency services, it isn't like they are working in a high crime area. PPD and PFD have it easy in this town. I don't like how they are being paid like they are really working hard 24/7. I also don't like it when they get promoted right before they retire because that retirement is based on their highest paycheck. ... Then after they retire (all the past fire cheifs) they get a job back at the city the next day. Literally!

Posted: Sunday, January 13, 2013
Article comment by: @ KILLING US

I just did the math at Antelope Hills . The four school boys at the top watching grass grow and losing millions doing it, are a much higher nut to crack then the children mowing it . But the very thing city manager is whining about, is exactly what he is waiting and watching to happen --- retirement for all .

Posted: Sunday, January 13, 2013
Article comment by: Once Again

Maybe a few of the posters on here need to go to the city web site and fill out an app the city is hiring and when they get hired which will happen because they are obviously more qualified then us current city employees they need to offer to work for minimum wage with no benefits, but that will never happen because then their government checks will stop coming. And nothing the deputy city manager says can be trusted when they took our sick/vacation her facts were proven to be false or made up in front of the council but they don't care about that as long as she can keep finding more money for them to spend then blaming us for the financial problems so we look like the bad guys to the public. Here is another big pat on the back Alison

Posted: Sunday, January 13, 2013
Article comment by: @ TEAM PLAYER .

If you look at the comparable wages that city employees are paid and then look at the benefits ( which is also lower comparable to other cities in this state and out) it becomes clear that benefits make up a lot of the compensation that these people deserve. But to address your implied comment that because they want to be fairly compensated for their job they aren't a team player, well I certainly hope that you work for free. Otherwise it just means you are a hypocrite. And from my contact with the public service employees they DO work as a team, but management has removed itself from working with them or supporting them ( this being a good example)and has thereby weakened the morale and consequently the services. Talk to them about team players and support.

Posted: Sunday, January 13, 2013
Article comment by: @ just my thoughts

If there are hundreds, or thousands of people out of work, and are qualified to do these jobs, then please come and apply. We're hiring! Oh, I forgot it's easier to whine about not having a job, then to actually off your _ _ _ and get one. And if you believe we are spoiled for doing our job, with less people, for less money, putting up with the negitive public opinion, and non-extistent support for management, while still working hard everyday to provide excellent services, then you are ignorant of reality.

Posted: Sunday, January 13, 2013
Article comment by: John Rollo

Of course the Pension plans are targeted to be raided. And chip away at the edges they will do. The pensions in this country have been underfunded and mishandled from day one. The employees deserve these benifits. Their contract provides for this. How come the everyday citizen is shackled to one contract after another Whether it's your home loan, a cell phone contract or your Direct TV agreement. But when it comes to workers rights those contracts are easily tossed out the window? Honor those agreements.

Posted: Sunday, January 13, 2013
Article comment by: Prescott Native

I have said this before here, no one cared about what "benefits" government employees had..... until the economy tanked and the "Minute Millionaires" lost out because they spent every dime. Govt employees got ridiculed for not getting on the "gravy train" because we stayed loyal to our customers: YOU, the citizens and visitors to the area. Some of us have not gotten any sort of raise in a decade, while the cost of raising a family continues to increase.
I personally agreed to make less money and be true to this community, while those around me were making 3 and 4 times more building homes.
Give us a break.

Posted: Sunday, January 13, 2013
Article comment by: This is Killing the US:

Do the math on exactly what dollars the employee takes home and what are the maximum costs are for that employee. The difference between those costs will shock you. This money that disappears is what's killing this country, it's consumed by all sorts of sharks mainly the insurance cartel for starters. Now my friends this is the main reason businesses are leaving the US, it's not the small percent the employee takes home, it's the majority the parasites consume. ITS KILLING THE US!

Posted: Sunday, January 13, 2013
Article comment by: @ FLABBER GHASTED

You call four million and counting in debt a work force ? How much real labor or brains does it take to run in the RED year after year . And FYI it is way more than $14.00 an hour plus medical plus,plus, plus . POOR TAXPAYER

Posted: Sunday, January 13, 2013
Article comment by: TEAM PLAYER ?

Reading these posts,sounds like employees are working JUST for the benefits . Now I ask you is that a TEAM PLAYER . Wait till your supervisor or assistant or assistant enters it in your next review . GOOD LUCK you think this kind of stuff doesn't happen -- THINK AGAIN .

Posted: Sunday, January 13, 2013
Article comment by: Isnt it Funny

Its funny to me that all the sudden Blair is coming after public safety retirements but never seemed to care before (he had to sell) his bread company ... after his ridiculous comments about the painting at Miller Valley School. ... As matter of fact here in Prescott when the economy is good and businesses are bringing in money and contractors are building lots of homes, buying boats, cars, homes without setting up a retirement of their own they are all fine. In those times they don't care and the city doesn't care about public safety retirement. But once we are in a bad economy not all but some of the above start screaming take away city and public safety benefits. Sounds like jealousy to me or a mismanagement of their lifestyle. Point is if its sooo great to be a Police Officer or Fireman why aren't alot of the complainers lining up to do it? Is it because they are lazy? Scared? Or just can't pass a background? Don't get me wrong I've lived here too long and know the majority of Prescott residents fully support Police and Fire so thank you to them!! Its a shame that our Council and City Management have failed miserably with financial decisions to where they have to point the finger at the few people who get paid already pretty poorly to give their lives for anyone even those who don't care for them. Sad times. Oh and the twenty year retirement yep Tom Steele there's a little more bodily and mental stress doing these jobs than being a substitute teacher! I applaud all Teachers and feel they are underpaid and under appreciated greatly but don't compare our jobs!!

(Site administrator's note: Portions of this comment were removed because they violated our Terms of Use Agreement)

Posted: Saturday, January 12, 2013
Article comment by: Joe Hill

It is time for all city employees, public safety and and civilian, to join together. City government divides the employees saying one is "essential", the other is "nice to have", but the "essential persons" pension is causing the other to lose their job. An attack on one group of employees is an attack on all, which will result in reduced service to the citizens at large. Can't wait to see AFSCME, SEIU or NAGE set up shop. Also, city employees pay taxes, so in effect they contribute to both sides of the retirement ledger.

Posted: Saturday, January 12, 2013
Article comment by: flabber ghasted


Posted: Saturday, January 12, 2013
Article comment by: just my thoughts

To all the city employees who are whining about how low morale is and how great it would be working somewhere...anywhere else. Get off your behind, pick yourself up, and get on your way. You are spoiled and have no idea how good you have it here. There are hundreds if not thousands of out of work people who would love to fill your jobs.

Posted: Saturday, January 12, 2013
Article comment by: Retire on your own dime

This is a prime example why this county is in deep s--t! Nowbody has any skin in the game! Want to retire and live the good life "pay your own way" it will soon be the norm in the near future.

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