City determined to pay off police-fire pension debt

Chandler City Council is determined to pay off the debt it owes for its public safety employees’ pension plan.

Council told staff to proceed with a plan to pay off what it owes this year so it will only be responsible for ongoing payments going forward.

“I’m very excited about us moving in this direction,” said Mayor Kevin Hartke. “When we first started this process -- what was it, about 2015 I’m thinking, 2014 – [we] embarked on a longer-term plan, and we were just committed to paying this down.

“Because of things outside of our control, we would make a significant payment, and lo and behold, the amount to pay down would be higher the next year. That was very discouraging for me and Council at that time.”

The city is still waiting updated numbers on its Arizona Public Safety Personnel Retirement System debt. On June 30, it owed $136.5 million. On July 1, the start of the new fiscal year, it made a $50 million payment.

Chief Financial Officer and Deputy City Manager Dawn Lang estimates the city probably owes around $73 million on its unfunded liability since the large payment this fiscal year would have lowered the interest owed.

She said the city has been paying $20 million annually. However, if the debt is paid off, then that would free up at least $10 million annually of city funds that could be used for something else.

One way of helping to get that extra money to pay it off this year is by changing the city’s reserve policy, which Council also did this week.

The city policy has been to have four months of its operating budget in reserve. The change would be to add the word “ongoing” to operating budget.

That would exclude all one-time expenses, such as paying down the PSPRS debt and lower the reserve amount needed.

Lang said the change would not harm the city’s Triple A bond rating because it needs to maintain only a two-month reserve.

Council was voting on changes to its financial policies so that city staff can continue to work on the next fiscal budget.

In other Council news from the April 24 study session:

Joint mobile command center

The city plans to purchase a joint mobile command center for its police and fire departments. The cost is estimated at $1.25 million, but the city would pay about $570,000 and is applying for a matching grant to cover the rest.

“These vehicles allow command staff, these are command officers from the police and fire department, to go to these incident incidents and perform all of their command and control functions,” said Fire Chief Tom Dwiggins. “These are reserved for our largest incidents, our most complex incidents.”

He said the catalyst for this request was a case where a suspect barricaded himself inside a home and shot at police officers, then set fire to that home.

Both police and fire had large crews at the site with two different command centers set up across the street from one another trying to achieve the same outcome.

The vehicle’s large cost is because the unit will include six different and independent communication consoles, allowing them to speak with other police and fire units in the Valley.

Pass-through grant

The Fort McDowell Yavapai Nation is giving a $25,000 grant, through the Chandler City Council, to Dignity Health Foundation to pay for Point of Care Ultrasound (PoCUS) devices.

A spokesperson for Dignity said it is their hope that they can use the devices to help train doctors, who in turn will stay in the East Valley, where there is a shortage of doctors.

The devices are about the size of a smart phone and can be used to do quick ultrasounds to help diagnose patients.

The tribe has to partner with a city to release the funds because it comes from its casinos. It was a requirement to allowing gambling on tribal lands. They must contribute 12% of their profits to cities, towns and the state for items that benefit the community.

Ponderosa application

The Council is considering an application from Ponderosa Dispensary to expand its medical marijuana operations to include cultivation and infusion.

Council Member Christine Ellis wanted the lawyer representing Ponderosa to answer a question.

Ellis reminded Lindsay Schube, an attorney at Gammage & Burnham, that the last time she was before Council, Ellis told her she didn’t want the company seeking more changes later.

That was to allow cultivation, infusion and a dispensary all at one site.

She said now she hears rumbling that Schube wants more and she wanted to know if she would keep her promise.

Schube said yes. There is one change the company would like but will not ask Council to make it. The change is that the current license requires Ponderosa to return annually to get its license renewed by Council. The firm would prefer the city drop that requirement.