Lake Havasu City Set To Borrow $13M To Make Pension Payment
Lake Havasu City is about to borrow roughly $13 million to put into its public safety pension fund. The city manager, however, said even though it's an uncontroversial move, Lake Havasu City doesn’t really need the money.
The city's plan to borrow has its roots in Arizona’s law capping spending by cities and towns. There are some things that are excluded from that cap but not pension payments. Borrowing, however, is excluded from the cap, at least in this case.
Charlie Cassens, city manager for Lake Havasu City, said the city will borrow in order to avoid hitting the expenditure cap, even though it has the money it needs.
"It’s really our only other alternative to violating the expenditure limitation rule, which we don’t want to do," he said, "because then they start taking money away from you."
Voters approved the expenditure limitation law in 1980. Cassens said expenses have gone up with the population.
Next fall, Lake Havasu City will put forward a referendum to raise the base cap on city spending.