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Bisbee Mayor David Smith

A group of Arizona mayors is calling on Gov. Ducey to make further reforms to the Public Safety Personnel Retirement System, or PSPRS.

In addition, an ad hoc committee of the state House of Representatives is holding meetings on the subject. Its next gathering is next week in Prescott. One of the concerned mayors is David Smith of Bisbee. I caught up with him on Wednesday and asked him how significant his city’s obligation to PSPRS is, relative to its budget and general fund.

Now, according to PSPRS, the system has about half of the money it needs to cover the pensions of all retirees and current members. It won’t need all of that all at once, and Communications Director Christian Palmer says being funded in the 70-80 percent range is probably a comfortable place to be.

On the issue of moving the PSPRS board under the state treasurer, Palmer says that’d be a bad idea. He says that’s because the treasurer can only invest in domestic stocks and bonds, while the pension system can be more diversified.

"It does that for the exact reasons that the more asset classes we invest in, the more stability we have. So, if we moved into a system where it’s just pretty much relying on domestic stocks and bonds, our employers would be really subject to the typical year-to-year volatility of the market, which could prove disastrous for them," Palmer said.

We also heard Smith talk about the timing of getting things turned around, and how cities like his don’t have a lot of time for that to happen. But PSPRS’s Palmer says the board is trying to be careful to manage expectations.

"It took 15 years for PSPRS to get to where it is, and it’s not going to take 15 minutes to get out of it. We are really limited legally what we can do. You can’t go in and trim anyone’s benefits that have already been promised to them — the courts have told us that. And ultimately, the Legislature and all the stakeholders have done all the real reforms they possibly can and now it's just a matter of time and money to help the system claw back," Smith said.

The group of mayors will hold its third summit meeting tomorrow in Prescott Valley. That’ll be followed by the state house’s ad hoc committee meeting next Wednesday in Prescott.