A financial instrument that has appealed to many municipalities to remedy underfunded pension plans is once again looking like a losing borrow and bet scheme.
The Yuma City Council, in a special meeting held Monday, introduced an ordinance that authorizes the issuance of bonds to pay off its debt to the public safety pensions mandated by the state.
At the special meeting, the council immediately went into an executive session to seek legal advice. After about an hour, the council returned to the dais and representatives of Stifel, Nicolaus and Company recapped the situation and offered three options.
Due to the current historically low interest rates, the council previously directed staff to work with the advisors to issue bonds to pay off 100% of the debt it owes to the Arizona Public Safety Personnel Retirement System for police and fire employee pensions, plus use a portion for a contingency fund to deal with future pension costs.