Coconino News

The City of Flagstaff recently took action to take charge of its $112 million debt and fully fund its Public Safety Retirement System (PSPRS) by selling its Certificates of Participation (COP) to investors.

The COPs went on the market on July 23, which resulted in 116 orders from 41 institutional investors and several retail orders which amounted to 3.7 times the number of COPs offered, according to a press release on the city's website.

The city's plan was initiated as a result of its "unfunded actuarial liability" from active and retired first responders, according to the release. The city then consulted with investors and hired Stifel, Nicolaus & Company (Stifel) as underwriters and Greenburg Traurig LLP as bond counsel, while PSPRS staff served as advisors to develop the plan. The plan includes 100% funding of the police and fire pension plans with a $14 million contingency reserve fund, the city stated in the release. 

The city also stated that the COP investing plan has brought a total present value savings of $76 million and annual debt service payments between $8.6 million and $9.2 million versus our current budget of $10.7 million.

The city expects the COPs to be paid off at the end of June in 2040.