SAFFORD — The Safford City Council unanimously voted Monday to secure bonding to pay off the city’s unfunded liability when it comes to pensions for first responders.
The city will seek bonding of no more than $13 million, to be paid in full by 2048.
“Kind of hated to bite into that big of an apple, but I think we need to, from the percentage (charged), it just makes sense,” said Mayor Jason Kouts.
The annual interest rate is not to exceed 4.75 percent, which would put the city’s total to repay the bonds in excess of $31 million; however, staff said it is seeking an interest rate of 3.5 percent or less.
The bonds are to be repaid using excise taxes — which include transaction privilege (sales) tax —as well as state shared revenues. The city collected $8.2 million in sales tax in 2020-21, with $6.1 million of that coming from retail sales and $757,000 coming from restaurants.
Another $609,000 came from hotels and property rentals; however a portion of that revenue is not available to repay the bonds due to its previous dedication for tourism and hospitality promotion for the city.
The city is not required to pay from ad valorem property taxes.
