The Town Council has asked staff to provide a more detailed and balanced presentation before it discusses the potential of signing up for the Arizona State Retirement System (ASRS).

Deputy Town Manager/Director of Administration Dave Trimble provided an overview of the program for the council at its retreat late last month. Trimble said based on employee feedback, staff would propose moving forward to make the transition to the state retirement program.

“The ASRS offers current and future employees predictable retirement income and additional benefits not available through the Town’s current defined contribution 401A retirement program,” Trimble said in his report. “The Town has worked to provide information to employees through a series of meetings and the majority of employees are in favor of joining ASRS.”

Trimble noted that by far the majority of jurisdictions eligible to participate in the program in the state do so.

“Since the Town of Fountain Hills competes for highly qualified employees with other Arizona municipalities and governmental agencies, the Town is at a disadvantage in recruitment and retention of employees,” Trimble said.

He also noted that the Town’s current retirement program is believed to be a factor in difficulty in filling current vacancies on staff.

A conversion to the ASRA is expected to initially have a modestly higher cost to Town employees in the first year. However, Trimble said that is expected to decrease and could be a savings for the town in coming years.

The current 401A program has the Town matching employee contributions at 11%.

Some council members were skeptical of Trimble’s presentation.

Vice Mayor Gerry Friedel has a background in financial services and said he has found information indicating that ASRS is being underfunded currently. He also said he is somewhat skeptical of the argument the change would help retention. He noted that as many as 19 current employees have chosen to stay here under the current plan.

Councilman David Spelich is currently a state employee and paying into ASRS, and said he is frustrated with the program.

“I have six years under the ASRS, and I would run if I could,” Spelich said. “The costs continue to go up.”

Spelich also said he did not recall the council approving a survey of staff regarding ASRS.

“If we oppose, we look like we are against Town staff,” Spelich said.

It was also noted that the Fountain Hills Sanitary District recently joined the ASRS. Councilman Mike Scharnow said it is his understanding that has resulted in pay reduction to district employees.

That led the discussion to whether Town staff would want to be “made whole” with any conversion. In other words, any additional cost to them for the retirement program would be offset with an increase in salary. That could result in additional costs to the Town.

Town Manager Grady Miller said staff would pull together all of its research information including survey questions and results and acquire addition information related to specific council concerns. The presentation is to be brought back to the council at a future date for further discussion.