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Councilwoman Orr on PSPRS: 'This is a Solvable Problem'
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12 February 2017  
Property located in Chino Valley which is owned by the City of Prescott is fenced with large "No Trespassing" signs.

In examining options for paying off the Public Safety Personnel Retirement System (PSPRS) liabilities, on Tuesday the Prescott City Council looked at a list of properties owned by the city that could potentially be sold. 

As the Council tries to tackle the issue of the growing PSPRS liability, there is a sense of urgency. As Councilman Lamerson said in a recent meeting with local media representatives, “Our oath is to protect the citizens of Prescott and the charter of the City of Prescott. Moving forward, understanding that, we have to reduce that liability. We're going to use whatever is available for us to legally go after how to reduce that liability… You know, we're going to have to do something. We can't just sit here and do nothing.  We're going to have to do something.”

Councilwoman Orr, however is optimistic. “This is a solvable problem,” she said in Tuesday’s Council study session. “This is a problem that we can fix. This is solvable, and this will work."

One item that was discussed at length, is whether or not the City should use some of their reserve funds to make a lump sum payment to decrease the amount of the liability. With interest accruing rapidly in the PSPRS accounts, even a 10-20% initial reduction could realize immediate cost savings. 

Working off a list of 6 identified options for paying down the liabilities, the Council considered two of them on Tuesday: 1) Borrowing either internally or from a 3rd party; 2) Selling unneeded property. 

Need to Know:

Out of nearly 5400 acres of City-owned property, only
2 acres
were purchased with monies from the General Fund.

1. Historically, if property is purchased from one particular fund, and the property is sold at a later date, the proceeds of the sale return to the original fund. 

2. Of the properties identified, only 2 were purchased using General Fund monies, the rest all come from either the Water Fund or the Waste Water Fund.

3. Total amount of General Fund property? About 2 acres. Total amount of water/waste water property? About 5,386 acres.

4. These listed properties are not all the properties owned by the City. Many of the other properties have Open Space or Acker Trust Fund limitations and cannot be liquidated. Some properties are still being evaluated for resale viability. 

Historical Practices

What about that historical practice of returning proceeds to the original fund that purchased the property? According to City Manager Lamar, "It's been a management practice historically to keep the money in the fund that paid for it. We do have the flexibility, as the Mayor Pro Tem said, to change that management practice, and utilize money from the utility funds and put it in the General Fund and pay some unfunded liability responsibilities.”

Lamerson pointed out that if the City borrows money from its own reserves, it can charge itself very little or no interest on that money, where as 3rd party loans are much more costly. 

Lamar further explained, "The other thing with an internal loan for consideration is, the council today as a sitting body could decide that a loan is appropriate and borrow the money from the utilities to pay the debt services. However, ten years from now, the Council at that time can say that we feel really good about our capital program and utilities, we can forgive the loan to the General Fund. You have flexibility as a body to change your decision, whereas if you have a loan from the bank, you've got to pay the loan."

The Wildland Fire Station

According to City Manager Michael Lamar, the properties brought before Council were the ones “…from a staff perspective that didn’t have an immediate or a long term need."

One of the properties brought before the Council was the Wildland Fire Station #7, located in an industrial area of town on 6th Street. This was the fire station that the Granite Mountain Hotshots operated out of before nineteen members of the crew were killed during the Yarnell fire in 2013. It was at this property that thousands of items of memorabilia were left on the fence to honor the firefighters. 

Family members came to the Council meeting, and asked for time to come up with ideas that would allow the City to keep the property, but use it in ways that could bring in income and also honor those that sacrificed their lives. Deborah Pfingston, the mother of Andrew Ashcraft spoke first, followed by Amanda Marsh, wife of Eric Marsh. At the end of the meeting, Brendan McDonough asked about the Buggies that had been used by the GMHS crew and offered his assistance in finding a new home for them. 

After the Council meeting, Marsh explained, “We just want to be part of the solution."

Property that could be sold within the next 6 months:

Wildland Fire Station #7
Money goes to: General Fund
Where: 6th Street
Total: 1.3 Acres

 
 
 

South Alarcon Street
Money goes to: General Fund
Where: South Alarcon Street (near the corner of S. Alarcon and East Aubrey
Total: .68 acres

 

Tank Road Tank
Money goes to: Water Fund
Where: Near Heavenly Place & W. View Point Road
Total: 0.29 acres

 

Old South Reservoir
Money goes to: Water Fund
Where: Near Senator Highway
Total: 2.29 acres

Property that is already leased, but could be sold:

 

Property Adjacent to the Humane Society
Money goes to: Waste Water Fund
Where: Prescott Lakes Parkway
Total: 12.8 acres

 

Friendly Pines Camp South of Goldwater Lake
Money goes to: Water Fund
Where: Marapai Rd. 
Total: 94.18 acres

Possible Sale - Properties contain wells, water facilities, but could potentially be portioned out

 

 
Well #1 site in Chino Valley
Money goes to: Water Fund
Where: Chino Valley, near SR 89, Road 1 North
Total: 6 acres

 

Well #3 site in Chino Valley
Money goes to: Water Fund
Where: N. Road 1 East and E. Road 2 North
Total: 20 acres

 

Properties Surrounding Dugan Wells in Paulden
Money goes to: Water Fund
Where: W. Sweet Valley Rd., Paulden
Total: 330 acres

There are also a total of 13 parcels, consisting of more than 5256 acres, which are not recommended for sale. As all of the parcels were acquired with Water Funds, and if they were sold, the proceeds would have to return to the Water Fund under the current policy.  

 

The map below shows the property owned by the City of Prescott. 

 

Editor's note: Many of the images in this article were provided by the City of Prescott from their Power Point presentation on Tuesday, February 7. 

Lynne LaMaster

Lynne LaMaster is the Founder and Editor of the eNewsAZ Network of websites. She asks a lot of questions! In her spare time, she loves photography, cooking and hanging out with her family.

Website: https://www.facebook.com/eNewsAZ/