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AGENDA
ORO VALLEY
BUDGET AND FINANCE COMMISSION
REGULAR SESSION
FEBRUARY 17, 2026
COUNCIL CHAMBERS
11000 N. LA CAÑADA DRIVE
REGULAR SESSION AT OR AFTER 4:00 PM
CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
CALL TO AUDIENCE - at this time, any member of the public is allowed to address the Commission on any
issue not listed on today’s agenda. Pursuant to the Arizona open meeting law, individual Commission
members may ask Town staff to review the matter, ask that the matter be placed on a future agenda, or
respond to criticism made by speakers. However, the Commission may not discuss or take legal action on
matters raised during "Call to Audience." In order to speak during "Call to Audience", please specify what
you wish to discuss when completing the blue speaker card.
STAFF LIAISON REPORT
REGULAR SESSION AGENDA
1.REVIEW AND APPROVAL OF THE JANUARY 20, 2026 REGULAR SESSION MEETING MINUTES
2.PRESENTATION AND DISCUSSION OF PSPRS PENSION FUNDING POLICY
3.INTRODUCTION AND POSSIBLE DISCUSSION OF DRAFT RECESSION PLAN
4.PRESENTATION AND DISCUSSION OF GOLF FUND FISCAL ANALYSIS
COUNCIL LIAISON COMMENTS
ADJOURNMENT
POSTED: 2/13/26 at 5:00 PM by ck
POSTED: 2/13/26 at 5:00 PM by ck
When possible, a packet of agenda materials as listed above is available for public inspection at least 24 hours
prior to the Commission meeting in the Town Clerk's Office between the hours of 8:00 a.m. – 5:00 p.m.
The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability
needs any type of accommodation, please notify the Town Clerk’s Office at least five days prior to the Commission
meeting at 229-4700.
INSTRUCTIONS TO SPEAKERS
Members of the public have the right to speak during any posted public hearing. However, those items not
listed as a public hearing are for consideration and action by the Commission during the course of their
business meeting. Members of the public may be allowed to speak on these topics at the discretion of the
Chair.
If you wish to address the Commission on any item(s) on this agenda, please complete a blue speaker card located
on the Agenda table at the back of the room and give it to the Recording Secretary. Please indicate on the
speaker card which item number and topic you wish to speak on, or if you wish to speak during “Call to
Audience,” please specify what you wish to discuss when completing the blue speaker card.
Please step forward to the podium when the Chair announces the item(s) on the agenda which you are interested
in addressing.
1. For the record, please state your name and whether or not you are a Town resident.
2. Speak only on the issue currently being discussed by the Commission. Please organize your speech, you will
only be allowed to address the Commission once regarding the topic being discussed.
3. Please limit your comments to 3 minutes.
4. During “Call to Audience”, you may address the Commission on any issue you wish.
5. Any member of the public speaking must speak in a courteous and respectful manner to those present.
Thank you for your cooperation.
“Notice of Possible Quorum of the Oro Valley Town Council, Boards, Commissions and Committees: In accordance
with Chapter 3, Title 38, Arizona Revised Statutes and Section 2-4-4 of the Oro Valley Town Code, a majority of the
Town Council, Board of Adjustment, Historic Preservation Commission, Parks and Recreation Advisory Board,
Stormwater Utility Commission, and Water Utility Commission may attend the above referenced meeting as a
member of the audience only.”
Budget and Finance Commission 1.
Meeting Date:02/17/2026
Submitted By:Melissa Flores, Legal
SUBJECT:
REVIEW AND APPROVAL OF THE JANUARY 20, 2026 REGULAR SESSION MEETING MINUTES
RECOMMENDATION:
Staff recommends approval
EXECUTIVE SUMMARY:
N/A
BACKGROUND OR DETAILED INFORMATION:
N/A
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
I MOVE to approve (approve with changes) the January 20, 2026 regular session meeting minutes.
Attachments
Draft Minutes 012026
D R A F T
MINUTES
BUDGET AND FINANCE COMMISSION
REGULAR SESSION
JANUARY 20, 2026
COUNCIL CHAMBERS
11000 N. LA CAÑADA DRIVE
REGULAR SESSION AT OR AFTER 4:00 PM
CALL TO ORDER at 4:00 by Chair Garland
ROLL CALL
Present: Joyce Garland, Chair
Dan Karlsberg, Vice Chair
John Moothart, Commissioner
Eloho Okeze, Commissioner
Erin Krapf, Commissioner
Staff Present: Joe Winfield, Mayor
Jeff Wilkins, Town Manager
David Gephart, Chief Financial Officer
Wendy Gomez, Deputy Finance Director
Chris Hutchison, Senior Budget Analyst
Attendees: Brian Hemmerle, CPA, CFE, Presenter
PLEDGE OF ALLEGIANCE led by Chair Garland
CALL TO AUDIENCE - No speaker cards were received.
STAFF LIAISON REPORT
Chief Financial Officer, David Gephart, reported on the following:
At the last Town Council Meeting:
A Stormwater Fee increase was passed with a three year phased in implementation
The Use Tax that was recommended by the commission was passed and approved
The Tele-Com and Commercial Rent Tax was not approved, both failing on a 3-4 vote
Discussion on Rooney Ranch Property concepts
Council approved a gift of property that abuts Honeybee Park
At the next Town Council Meeting:
A progress report on Your Voice, Your Future general plan will be presented
An IGA between the Town of Oro Valley and the Town of Marana on some tourism collaboration.
Rancho Vistoso Center - Master Sign Program revision being brought forward for Town Council
Approval
Presentation on Amphi School closures that will be affecting the town and residents by the
Superintendent.
1/20/26 Minutes, Budget and Finance Commission Regular Session 1
Staff received their acturarial report in December from Foster & Foster on PSPRS and the town ended
101% funded for the tier one and their two members.
REGULAR SESSION AGENDA
1.REVIEW AND APPROVAL OF THE NOVEMBER 18, 2025 REGULAR SESSION MEETING MINUTES
Motion by Vice Chair Dan Karlsberg, seconded by Commissioner Eloho Okeze to approve the
November 18, 2025, regular session meeting minutes.
Vote: 5 - 0 Carried
2.DISCUSSION AND POSSIBLE ACTION ON ELECTING A CHAIR AND VICE CHAIR FOR THE
BUDGET AND FINANCE COMMISSION
A) DISCUSSION AND POSSIBLE ACTION IN ELECTING A CHAIR OF THE BUDGET AND FINANCE
COMMISSION FOR THE UPCOMING YEAR
B) DISCUSSION AND POSSIBLE ACTION IN ELECTING A VICE-CHAIR OF THE BUDGET AND
FINANCE COMMISSION FOR THE UPCOMING YEAR
Discussion ensued amongst Staff and Commissioners.
Motion by Chair Joyce Garland, seconded by Commissioner Eloho Okeze to elect Commissioner Dan
Karlsberg as the Chair for the Budget and Finance Commission for the 2026 calendar year.
Vote: 5 - 0 Carried
Motion by Vice Chair Dan Karlsberg, seconded by Commissioner Erin Krapf to elect Commissioner
Joyce Garland as the Vice-Chair for the Budget and Finance Commission for the 2026 calendar year.
Vote: 5 - 0 Carried
3.PRESENTATION AND POSSIBLE DISCUSSION OF THE TOWN'S ANNUAL COMPREHENSIVE
FINANCIAL REPORT AND SINGLE AUDIT FOR FISCAL YEAR ENDED JUNE 30, 2025
Presentation by Brian Hemmerle, Lead Audit Partner. Discussion ensued amongst Staff and
Commissioners.
4.PRESENTATION AND POSSIBLE DISCUSSION OF THE TOWN'S FY25/26 FINANCIAL UPDATE
THROUGH NOVEMBER 2025 (PLEASE REFERENCE ATTACHMENTS)
Presentation by Wendy Gomez, Deputy Finance Director. Discussion ensued amongst Staff and
Commissioners.
COUNCIL LIAISON COMMENTS
Mayor Winfield provided the following comments:
Welcome new commissioners.
Show of appreciation of Joyce Garland's term as chair and congratulations expressed to the newly
appointed chair.
Appreciation shown to the commission on the recommendation regarding fees and taxes.
From 9 AM to 2 PM tomorrow (January 21, 2026) there will be a strategic planning session with the
council and executive team. Commissioners are welcome to come and observe.
1/20/26 Minutes, Budget and Finance Commission Regular Session 2
ADJOURNMENT
Motion by Commissioner John Moothart, seconded by Commissioner Erin Krapf to adjourn the
meeting at 5:07 PM
Vote: 5 - 0 Carried
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the
Town of Oro Valley Budget and Finance Commission of Oro Valley, Arizona held on the 20th day of January,
2026. I further certify that the meeting was duly called and held and that a quorum was present.
Dated this 20th day of January, 2026.
___________________________
Melissa Flores
Legal Secretary
1/20/26 Minutes, Budget and Finance Commission Regular Session 3
Budget and Finance Commission 2.
Meeting Date:02/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
PRESENTATION AND DISCUSSION OF PSPRS PENSION FUNDING POLICY
RECOMMENDATION:
N/A - this item is for presentation and discussion only.
EXECUTIVE SUMMARY:
This agenda item is intended to update the Budget and Finance Commission on the funding status of the PSPRS
plan, especially as it relates to Town police pensions, in anticipation of updating the PSPRS Pension Funding
Policy for next fiscal year ending June 30, 2027.
BACKGROUND OR DETAILED INFORMATION:
Actuarial reports for the fiscal year ended June 30, 2025, have been released by PSPRS. Both the Town police
plan and dispatch (CORP) plan have been attached. Page 19 of the police plan actuarial report shows plan
investment yields last year were 11.0% net of fees, which exceeds the assumed earnings rate of 7.2% for tier
1/tier 2.
The police tier 1/tier 2 funding status has increased from 98.6% to 101.0%, while the dispatch tier 1/tier 2 funding
status has decreased from 102.8% to 100.2%.
The Town's actuarial accrued asset for police as of June 30, 2025, is estimated at $903,242, an increase of
$2,101,108 from the prior year liability of $1,204,866 (see p.14). For the CORP plan as of June 30, 2025, the
Town had a net pension asset of $6,440, down from $100,530 in the prior year (see p.12). The Town has
contributed an additional $1.156 million in excess contributions towards the police plan this fiscal year, above and
beyond its normal recommended contributions through payroll. According to the report on page 8 (all else being
equal), this would bring the funding status up to about 102.3% at the end of this fiscal year. Please be aware that
this estimate does not include any potential impacts from the new memorandum of understanding that is being
implemented in this current fiscal year.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
N/A
Attachments
Current pension funding policy FY26
FY25 PSPRS Police Actuarial Report
FY25 CORP Dispatch Actuarial Report
1
Town of Oro Valley
Public Safety Personnel Retirement System (PSPRS & CORP)
Pension Funding Policy – FY25/26
The intent of this policy is to clearly communicate the Town Council’s pension funding objectives,
its commitment to employees and the sound financial management of the Town of Oro Valley and
maintain compliance with statutory requirements of A.R.S. 38-863.01. The Council shall annually
assess the status of the Town’s PSPRS trust fund and take formal action to update this policy in
concert with the final annual budget approval. This policy shall also apply to the Town’s participation
in the Correction Officer Retirement Plan (CORP).
Several terms are used throughout this policy and are defined as follows:
Unfunded Actuarial Accrued Liability (UAAL) – Is the difference between trust assets and
the estimated future cost of pensions earned by employees. This UAAL results from actual
results (interest earnings, member mortality, disability rates, etc.) being different from the
assumptions used in previous actuarial valuations.
Annual Required Contribution (ARC) – Is the annual amount required to pay into the pension
funds, as determined through annual actuarial valuations. It is comprised of two primary
components: normal pension cost – which is the estimated cost of pension benefits earned by
employees in the current year; and, amortization of UAAL – which is the cost needed to cover
the unfunded portion of pensions earned by employees in previous years. The UAAL is
collected over a period of time referred to as the amortization period. The ARC is a percentage
of the current payroll.
Funded Ratio – Is a ratio of fund assets to actuarial accrued liability. The higher the ratio, the
better funded the pension is, with 100% being fully funded based on current actuarial valuations.
Intergenerational equity – Is a concept used to describe the policy expectation that no
generation is burdened by substantially more or less pension costs than past or future
generations.
The Town’s sworn police employees who are regularly assigned hazardous duty participate in the
Public Safety Personnel Retirement System (PSPRS). Selected individuals who serve as
dispatchers in the Oro Valley Police Department participate in the CORP plan, which is also
administered by the Public Safety Personnel Retirement System.
Public Safety Personnel Retirement System (PSPRS)
PSPRS is administered as an agent multiple-employer pension plan. An agent multiple-employer
plan has two main functions: 1) to comingle assets of all plans under its administration, thus
achieving economy of scale for more cost efficient investments and invest those assets for the
benefit of all members under its administration, and 2) serve as the statewide uniform administrator
for the distribution of benefits.
2
Under an agent multiple-employer plan, each agency participating in the plan has an individual trust
fund reflecting that agencies’ assets and liabilities. Under this plan all contributions are deposited
to and distributions are made from that fund’s assets, each fund has its own funded ratio and
contribution rate, and each fund has a unique annual actuarial valuation. The Town of Oro Valley
has one trust fund for police employees. The Town also contributes to the Correction Officer
Retirement Plan (CORP), administered by the Public Safety Personnel Retirement System, on
behalf of selected individuals who serve as dispatchers in the Oro Valley Police Department. CORP
maintains one trust fund for dispatchers.
Oro Valley Town Council formally accepts the assets, liabilities, and current funding ratio of the
Town’s PSPRS and CORP trust funds from the June 30, 2024 actuarial valuations specified below.
Trust Fund Assets
Accrued
Liability
Unfunded
Actuarial Accrued
Asset/(Liability)
Funded
Ratio
Oro Valley Police
(PSPRS)$86,551,076 $87,755,942 ($1,204,866) 98.6%
Oro Valley Dispatchers
(CORP) $ 4,106,486 $ 3,995,956 $ 100,530 102.8%
PSPRS and CORP Funding Goal
Pensions that are less than fully funded place the cost of service provided in earlier periods
(amortization of UAAL) on current taxpayers. Fully funded pension plans are the best way to
achieve taxpayer and member intergenerational equity.
The Council’s PSPRS and CORP funding ratio goal is 100% (fully funded) through June 30,
2026 and beyond. Council establishes this goal for the following reasons:
The PSPRS and CORP trust funds represent only the Town of Oro Valley’s liability
The fluctuating cost of an UAAL causes strain on the Town’s budget, affecting the Town’s
ability to provide services
A fully funded pension is the best way to achieve taxpayer and member intergenerational
equity
Council has determined that in order to achieve the 100% funding ratio goal, the following actions
will be taken:
The total employer contribution to the police plan for fiscal year 2026 will be the
recommended employer contributions made by the actuary in its June 30, 2024 report
($738,817), plus additional excess contributions scheduled for fiscal year 2026 ($2,100,000)
for a sum total of $2,838,817.
The CORP plan does not require any additional contributions as it is fully funded.
Retain 20-year amortization of unfunded liability.
Review Local board practices annually.
Periodically engage consultants to review actual results and recommend possible
adjustments or corrections as necessary.
3
Payments to the PSPRS Police pension plan will be as follows:
In fiscal year 2026, the Town will contribute an additional $2,100,000 above and beyond the
employer actuary-recommended contribution of $738,817.
In FY27 and beyond, the Town will reevaluate its additional contributions based upon future
actuarial valuations and budget capacity.
It is hereby the Town Council’s intent to achieve its goal of 100% funding by June 30, 2026, in
accordance with the amortization timeline set forth by the PSPRS and CORP June 30, 2024
Actuarial Valuation
The attached appendix shows the historical performance of the unfunded actuarial accrued liability.
4
Appendix A
Source: Town Comprehensive Annual Financial Report for June 30, 2024 – Note 16.
Arizona Public Safety Personnel
Retirement System
ORO VALLEY POLICE DEPT. (122)
Actuarial Valuation
As of June 30, 2025
Contributions Applicable to the Plan/
Fiscal Year Ending June 30, 2027
13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · www.foster-foster.com
November 2025
Board of Trustees
Arizona Public Safety Personnel Retirement System
Re: Actuarial Valuation as of June 30, 2025 for Oro Valley Police Dept. (122)
Dear Members of the Board,
This report details the annual actuarial valuation of the Arizona Public Safety Personnel Retirement System
(PSPRS) as of June 30, 2025. The valuation was performed to measure the plan’s liability and funding levels
and to determine the actuarially appropriate funding requirements for the applicable plan year. This report
was prepared for use by the Board and those designated or approved by the Board. Use of the results for
other purposes may not be applicable and could produce significantly different results.
DATA AND ASSUMPTIONS
In preparing this report, we have relied on personnel, plan design, and asset information supplied by PSPRS.
In our opinion, the assumptions used in the valuation, as adopted by the Board, represent reasonable
expectations of anticipated fund experience. Other sets of assumptions and methods could also be reasonable
and could produce materially different results. While we cannot verify the accuracy of all this information, the
supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no
reason to doubt the substantial accuracy of the information and believe that it has produced appropriate
results. This information, along with any adjustments or modifications, is summarized in various sections of
this report.
DISCLOSURES AND LIMITATIONS
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to factors such as the following: plan experience differing from that anticipated by the economic
or demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period); and changes in plan provisions or applicable law. Due to the limited scope of this
report, we did not provide an analysis of these potential differences.
The computed contribution rates shown in the “Contribution Results” section should be considered minimum
contribution rates that comply with the Board’s funding policy and Arizona Statutes. Users of this report
should be aware that contributions made at that rate do not guarantee benefit security. Given the importance
of benefit security to any retirement system, we suggest that contributions to the System in excess of those
presented in this report be considered.
The funding percentages and unfunded accrued liability as measured based on the actuarial value of assets
will differ from similar measures based on the market value of assets. These measures, as provided, are
appropriate for determining the adequacy of future contributions, but may not be appropriate for the purpose
of settling a portion or all of its liabilities.
This valuation assumes the continuing ability of the participating employers to make the contributions
necessary to fund this plan. A determination regarding whether or not the participating employers are
actually able to do so is outside our scope of expertise. Consequently, we did not perform such an analysis.
In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and
costs. These results are reviewed in the aggregate and for individual sample lives. The output from the
software is either used directly or input into internally developed models to generate the costs. All internally
developed models are reviewed as part of the process. As a result of this review, we believe that the models
have produced reasonable results. We do not believe there are any material inconsistencies among
assumptions or unreasonable output produced due to the aggregation of assumptions.
ACTUARIAL CERTIFICATION
The valuation has been conducted in accordance with all applicable laws and regulations, as well as generally
accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued
by the Actuarial Standards Board; specifically No. 6 for Measuring Retiree Group Benefit Obligations/No. 4 for
Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, No. 23 for Data Quality,
No. 27 for Selection of Economic Assumptions for Measuring Pension Obligations, No. 35 for Selection of
Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, No. 44, Selection and
Use of Asset Valuation Methods for Pension Valuations, and No. 51, Assessment and Disclosure of Risk
Associated with Measuring Pension Obligations.
In our opinion, the Minimum Required Contribution set forth in this report constitutes a reasonable actuarially
determined contribution under Actuarial Standard of Practice No. 4.
The undersigned are familiar with the immediate and long-term aspects of pension/OPEB valuations and meet
the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions
contained herein. All of the sections of this report are considered an integral part of the actuarial opinions.
To our knowledge, no associate of Foster & Foster, Inc. working on this report has any direct financial interest
or indirect material interest in the Arizona Public Safety Personnel Retirement System, nor does anyone at
Foster & Foster, Inc. act as a member of the PSPRS Board of Trustees. Thus, there is no relationship existing
that might affect our capacity to prepare and certify this actuarial report.
Respectfully submitted,
Foster & Foster, Inc.
____________________________ ____________________________
Bradley R. Heinrichs, FSA, EA, MAAA Paul M. Baugher, FSA, EA, MAAA
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
TABLE OF CONTENTS
SUMMARY................................................................................................................................ 5
CONTRIBUTION RESULTS .............................................................................................................. 8
Development of Employer Contributions – Tiers 1 & 2 Members ............................................... 8
Development of Employer Contributions – Tier 3 Defined Benefit (DB) Members ..................... 9
Development of Contributions – Tier 3 Defined Contribution (DC) Members .......................... 10
Contribution Rate Summary ....................................................................................................... 11
Impact of Additional Contributions ............................................................................................ 12
Historical Summary of Rates ...................................................................................................... 13
LIABILITY SUPPORT ................................................................................................................... 14
Liabilities and Funded Ratios by Benefit - Tiers 1 & 2 ................................................................ 14
Liabilities and Funded Ratios by Benefit - Tier 3 ........................................................................ 15
Derivation of Experience (Gain)/Loss ......................................................................................... 16
Amortization of Unfunded Liabilities - Tiers 1 & 2 ..................................................................... 17
Amortization of Unfunded Liabilities - Tier 3 ............................................................................. 17
ASSET SUPPORT ....................................................................................................................... 18
MEMBER STATISTICS ................................................................................................................. 23
Statistical Data – Active Members.............................................................................................. 23
Statistical Data – Inactive Members ........................................................................................... 24
Active Age, Service and Pay Distributions – Tiers 1 & 2 ............................................................. 25
Active Age, Service and Pay Distributions – Tier 3 ..................................................................... 26
Age Distributions – Inactive Members ....................................................................................... 27
ACTUARIAL ASSUMPTIONS AND METHODS ..................................................................................... 28
PLAN PROVISIONS .................................................................................................................... 35
ACTUARIAL FUNDING POLICY ...................................................................................................... 41
SUPPLEMENTARY INFORMATION .................................................................................................. 46
Glossary ...................................................................................................................................... 46
Discussion of Risk ....................................................................................................................... 50
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
5
SUMMARY
The regular annual actuarial valuation of the Arizona Public Safety Personnel Retirement System for the Oro
Valley Police Dept., performed as of June 30, 2025, has been completed and the results are presented in this
Report. The purpose of this valuation is to:
Compute the employers’ recommended contribution rates for the fiscal year ending June 30, 2027.
This information is contained in the section entitled “Contribution Results”.
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and active
members and compare accumulated assets with the liabilities to assess the funded condition. This
information is contained in the section entitled “Liability Support.”
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
EMPLOYER CONTRIBUTION REQUIREMENTS (AS A PERCENTAGE OF PAYROLL)
Tiers 1 & 2 Members
Pension 10.47% 12.61%
Health 0.00% 0.00%
Total 10.47% 12.61%
Tier 3 Members 1
Pension 8.58% 8.41%
Health 0.11% 0.11%
Total 8.69% 8.52%
FUNDED STATUS
Tiers 1 & 2 Members
Pension 101.0% 98.6%
Health 181.6% 164.8%
Total 101.9% 99.4%
Tier 3 Members
Pension 102.4% 107.9%
Health 198.3% 216.2%
Total 103.6% 109.5%
1 The Tier 3 rates shown are the calculated rates as of the valuation date and do not reflect any Legacy costs that the
employer must also contribute.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
6
CHANGES FROM PRIOR YEAR
Changes in the results from the prior year’s valuation can be illustrated in the following tables along with high-
level explanations for the entire System below:
CONTRIBUTION RATE
Tiers 1 & 2 Tier 3 Members
Pension Health Pension Health
Contribution Rate Last Valuation 12.61% 0.00% 8.41% 0.11%
Asset Experience (0.74%) (0.02%) (0.17%) 0.00%
Payroll Base 0.01% 0.00% 0.00% 0.00%
Liability Experience (0.90%) 0.00% (0.32%) 0.00%
Additional Contribution (1.63%) 0.00% 0.00% 0.00%
Assumption/Method Change 0.00% 0.00% 0.00% 0.00%
Compensation Limit Update 0.00% 0.00% 0.67% 0.00%
Other 1.12% 0.02% (0.01%) 0.00%
Contribution Rate This Valuation 10.47% 0.00% 8.58% 0.11%
FUNDED STATUS
Tiers 1 & 2 Tier 3 Members
Pension Health Pension Health
Funded Status Last Valuation 98.6% 164.8% 107.9% 216.2%
Asset Experience 0.7% 1.4% 1.9% 4.1%
Liability Experience 0.8% 21.7% 3.6% 0.7%
Additional Contribution 1.2% 0.0% 0.0% 0.0%
Assumption/Method Change 0.0% 0.0% 0.0% 0.0%
Compensation Limit Update 0.0% 0.0% 0.0% 0.0%
Other (0.3%) (6.3%) (11.0%) (22.7%)
Funded Status This Valuation 101.0% 181.6% 102.4% 198.3%
Asset Experience – Asset gains and losses (relative to the assumed earnings rate) are smoothed over seven
years for Tiers 1 and 2 and over five years for Tier 3. The return on the market value of assets for the year
ending June 30, 2025 was 11.0% for Tiers 1 and 2 and 12.5% for Tier 3. On a smoothed, actuarial value of
assets basis, the average return was 7.9% for Tiers 1 and 2 and 9.2% for Tier 3. The returns exceeded the 2024
assumed earnings rate for Tiers 1 and 2 of 7.2% and the 2024 assumed earnings rate for Tier 3 of 7.0%.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
7
Payroll Base – Under the current amortization policy for Tiers 1 and 2, the contribution rate is developed as a
level percentage of payroll. Payroll for this purpose includes members of this plan and the defined
contribution plan’s members that would have been in this plan. To the extent that actual payroll is
lower/greater than last year’s projected payroll, the contribution rate will increase/decrease as a result.
Liability Experience – Experience overall was unfavorable, with key sources of loss coming from inactive
mortality, actual COLAs, and other data changes.
Additional Contribution – Monies contributed in excess of the required contribution rate in order to pay down
the unfunded liability.
Assumption / Method Change – The Board continued the decrease in the payroll growth assumption from
1.50% to 0.75%.
Compensation Limit Update – The Tier 3 compensation limit was updated, as scheduled, with a sizable
increase over expectation.
Other – This is the combination of all other factors that could impact liabilities year-over-year, with the
primary sources being changes in benefits for continuing inactives. Tier 3 members were also impacted by
the increase in the compensation limit.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
8
CONTRIBUTION RESULTS
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIERS 1 & 2 MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Normal Cost
Total Normal Cost 18.12% $ 926,988 18.59% $ 1,089,184
Employee Cost (7.65%) (391,361) (7.65%) (448,212)
Employer (Net) Normal Cost 10.47% 535,627 10.94% 640,972
Amortization of Unfunded Liability 0.00% 0 1.67% 97,845
Total Employer Cost (Pension) 10.47% 535,627 12.61% 738,817
HEALTH
Normal Cost 0.31% 15,859 0.33% 19,335
Amortization of Unfunded Liability (0.31%) (15,859) (0.33%) (19,335)
Total Employer Cost (Health) 0.00% 0 0.00% 0
Total Employer Cost (Pension + Health) 10.47% 535,627 12.61% 738,817
Alternate Contribution Rate (ACR) 1 8.00% 8.00%
Underlying Payroll (as of valuation date) 5,077,744 5,772,393
The results above are based on the current amortization schedule approved by the Board of Trustees for your
individual plan (see "Actuarial Assumptions and Methods").
1 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 8% minimum) and is charged when retirees return to active status.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
9
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIER 3 DEFINED BENEFIT (DB) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Total Normal Cost 17.15% $ 575,672 16.82% $ 451,906
Amortization of Unfunded Liability 0.00% 0 0.00% 0
Total Pension Cost 17.15% 575,672 16.82% 451,906
HEALTH
Total Normal Cost 0.21% 7,049 0.22% 5,911
Amortization of Unfunded Liability 0.00% 0 0.00% 0
Total Health Cost 0.21% 7,049 0.22% 5,911
TOTAL
Calculated Tier 3 Required EE/ER Individual Cost 8.69% 291,361 8.52% 228,909
Funding Policy Tier 3 Required EE/ER Individual
Cost 1 8.66% 290,689 8.69% 233,476
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 2 0.00% 0 1.67% 44,868
Funding Policy Tier 3 ER Defined Benefit Cost 8.66% 290,689 10.36% 278,344
Underlying Payroll (as of valuation date) 3,331,699 2,647,015
1 The “Funding Policy” cost was adopted in 2023 and first reflected in the June 30, 2023 valuation. This cost is a 3-year
rolling average of the actual calculated costs. The total cost is split equally between employer and employee, in
compliance with state statutes. Note that pension and health monies are split differently for the two parties based on
IRS requirements. More information on this breakout is included in the “Historical Summary of Rates”.
2 Pursuant to ARS § 38-843(B), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
10
DEVELOPMENT OF CONTRIBUTIONS – TIER 3 DEFINED CONTRIBUTION (DC) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
TIER 2 & 3 DB / NON-SOCIAL SECURITY
Employee Cost 3.00% 3.00%
Employer Cost 1 3.00% 3.00%
TIER 3 DC ONLY
Employee Cost 9.00% $ 13,396 9.00% $ 5,830
Employee Health Subsidy Program Cost 0.18% 268 0.20% 130
Employee Disability Program Cost 1.60% 2,381 1.54% 998
Total Employee Cost 10.78% 16,045 10.74% 6,958
Employer Cost 9.00% 13,396 9.00% 5,830
Employer Health Subsidy Program Cost 0.18% 268 0.20% 130
Employer Disability Program Cost 1.60% 2,381 1.54% 998
Total Employer Cost (before Legacy) 10.78% 16,045 10.74% 6,958
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 2 0.00% 0
1.67% 1,082
Total Employer Cost (with Legacy) 10.78% 16,045 12.41% 8,040
Underlying Payroll (as of valuation date) 147,734 63,816
1 Employer rate is 4% for Tier 2 members for a period of time depending on the individual's membership date.
2 Pursuant to ARS § 38-843(B), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
11
CONTRIBUTION RATE SUMMARY
Tier 1 Tier 2 Tier 3
Membership Date On or After 7/1/1968 1/1/2012 7/1/2017
Participates in Social Security N/A Yes No Yes No N/A
Available Retirement Plan 1 DB Only DB Only Hybrid DB Only Hybrid DC Only
EMPLOYEE CONTRIBUTION RATE
PSPRS DB Rate 7.65% 7.65% 7.65% 8.66% 8.66% PSPRS DC Rate 3.00% 3.00% 9.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 1.60%
Total EE Contribution Rate 7.65% 7.65% 10.65% 8.66% 11.66% 10.78%
EMPLOYER CONTRIBUTION RATE
PSPRS DB Normal Cost 10.78% 10.78% 10.78% 8.66% 8.66% PSPRS DB Tier 1 & 2 Legacy Cost 2 (0.31%) (0.31%) (0.31%) 0.00% 0.00% 0.00%
PSPRS DC Rate 3.00% 3.00% 9.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 1.60%
Total ER Contribution Rate 10.47% 10.47% 13.47% 8.66% 11.66% 10.78%
Employer Alternate Contribution Rate 3 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Exhibit summarizes employee and employer contributions based on Statute and the results of June 30, 2025
actuarial valuation. Pension and health components are combined, where applicable.
1 Employers that pay into Social Security on behalf of their members do not participate in the Hybrid Plan.
2 Per statute (ARS § 38-843(B)), any positive unfunded liability for Tiers 1 and 2 is to be applied to all Tier 3 (DB and DC)
payrolls
3 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 8% minimum) and is charged when retirees return to active status.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
12
IMPACT OF ADDITIONAL CONTRIBUTIONS
Additional Contribution (000s)
Impact On $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000
Funded Status - June 30, 2025 101.0% 102.1% 103.2% 104.3% 105.4% 106.5% 107.6% 108.8% 109.9% 111.0% 112.1%
FYE 2027 Contribution Rate 10.47% 9.27% 8.06% 6.86% 5.66% 4.45% 3.25% 2.05% 0.85% 0.00% 0.00%
Table shows the hypothetical change in the funded status and contribution rate from the June 30, 2025 actuarial valuation results for Tiers 1 & 2 if
an additional contribution of the amount shown had been made to the Fund on June 30, 2025. This illustration can help estimate the impact of
contributing additional monies to the fund in the future.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
13
HISTORICAL SUMMARY OF RATES
Pension Health
Valuation
Date June 30
Fiscal Year
Ending June 30
Normal
Cost
Unfunded
Amortization Total Normal
Cost
Unfunded
Amortization Total
TIERS 1 & 2 2021 2023 13.09% 30.38% 43.47% 0.45% (0.45%) 0.00%
(Employer) 2022 2024 11.00% 0.00% 11.00% 0.41% (0.41%) 0.00%
2023 2025 10.91% 5.31% 16.22% 0.34% (0.34%) 0.00%
2024 2026 10.94% 1.67% 12.61% 0.33% (0.33%) 0.00%
2025 2027 10.47% 0.00% 10.47% 0.31% (0.31%) 0.00%
TIER 3 1 2021 2023 9.68% 0.00% 9.68% 0.26% 0.00% 0.26%
(Employer) 2022 2024 9.30% 0.00% 9.30% 0.26% 0.00% 0.26%
2023 2025 8.77% 0.00% 8.77% 0.12% 0.00% 0.12%
2024 2026 8.46% 0.00% 8.46% 0.23% 0.00% 0.23%
2025 2027 8.43% 0.00% 8.43% 0.23% 0.00% 0.23%
TIER 3 2021 2023 9.68% 0.00% 9.68% 0.26% 0.00% 0.26%
(Employee) 2022 2024 9.30% 0.00% 9.30% 0.26% 0.00% 0.26%
2023 2025 8.77% 0.00% 8.77% 0.12% 0.00% 0.12%
2024 2026 8.69% 0.00% 8.69% 0.00% 0.00% 0.00%
2025 2027 8.66% 0.00% 8.66% 0.00% 0.00% 0.00%
1 All Tier 3 rates shown (employer and employee) are Board approved Funding Policy rates. Starting in 2023, these rates are a 3-year rolling average of calculated
EE/ER rates. Does not reflect Legacy costs that the employer must also contribute.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
14
LIABILITY SUPPORT
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIERS 1 & 2
Pension liabilities were increased by $857,273 and health liabilities were increased by $13,879 under the
lateral transfer methodology.
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 52,987,686 $ 46,079,112
DROP Members 12,019,150 13,233,011
Vested Members 1,109,503 910,525
Active Members 31,064,576 35,460,056
Total Actuarial Present Value of Benefits 97,180,915 95,682,704
Actuarial Accrued Liability (AAL)
All Inactive Members 66,116,339 60,222,648
Active Members 24,153,409 27,533,294
Total Actuarial Accrued Liability 90,269,748 87,755,942
Actuarial Value of Assets (AVA) 91,172,990 86,551,076
Unfunded Actuarial Accrued Liability (903,242) 1,204,866
PVB Funded Ratio (AVA / PVB) 93.8% 90.5%
AAL Funded Ratio (AVA / AAL) 101.0% 98.6%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 440,307 $ 399,204
DROP Members 184,009 196,061
Active Members 526,538 620,360
Total Present Value of Benefits 1,150,854 1,215,625
Actuarial Accrued Liability (AAL)
All Inactive Members 624,316 595,265
Active Members 417,583 491,844
Total Actuarial Accrued Liability 1,041,899 1,087,109
Actuarial Value of Assets (AVA) 1,891,781 1,791,666
Unfunded Actuarial Accrued Liability (849,882) (704,557)
PVB Funded Ratio (AVA / PVB) 164.4% 147.4%
AAL Funded Ratio (AVA / AAL) 181.6% 164.8%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
15
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIER 3
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 7,291,337 $ 7,268,826
Vested Members 14,157,384 9,523,410
Active Members 986,667,595 710,626,649
Total Actuarial Present Value of Benefits 1,008,116,316 727,418,885
Actuarial Accrued Liability (AAL)
All Inactive Members 21,448,721 16,792,236
Active Members 225,991,622 148,879,454
Total Actuarial Accrued Liability 247,440,343 165,671,690
Actuarial Value of Assets (AVA) 253,309,023 178,758,433
Unfunded Actuarial Accrued Liability (5,868,680) (13,086,743)
PVB Funded Ratio (AVA / PVB) 25.1% 24.6%
AAL Funded Ratio (AVA / AAL) 102.4% 107.9%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 33,666 $ 34,351
Active Members 12,076,315 9,825,773
Total Present Value of Benefits 12,109,981 9,860,124
Actuarial Accrued Liability (AAL)
All Inactive Members 33,666 34,351
Active Members 3,279,150 2,398,606
Total Actuarial Accrued Liability 3,312,816 2,432,957
Actuarial Value of Assets (AVA) 6,568,894 5,259,235
Unfunded Actuarial Accrued Liability (3,256,078) (2,826,278)
PVB Funded Ratio (AVA / PVB) 54.2% 53.3%
AAL Funded Ratio (AVA / AAL) 198.3% 216.2%
The liabilities shown on this page are the liabilities for all Tier 3 members grouped together in the Risk Sharing
group. These liabilities are NOT the liabilities solely for Oro Valley Police Dept. Tier 3 members.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
16
DERIVATION OF EXPERIENCE (GAIN)/LOSS
Tiers 1 & 2 Tier 3
Pension Health Pension Health
(1) Unfunded Actuarial Accrued Liability as of June 30, 2024 1,204,866 (704,557) (13,086,743) (2,826,278)
(2) Normal Cost Developed in Last Valuation 640,972 19,335 25,222,643 329,904
(3) Actual Contributions 2,124,575 0 28,231,800 783,130
(4) Expected Interest On (1), (2), and (3) 57,745 (49,336) (124,896) (207,442)
(5) Expected Unfunded Actuarial Accrued Liability as of June
30, 2025: (1)+(2)-(3)+(4) (220,992) (734,558) (16,220,796) (3,486,946)
(6) Changes to UAAL Due to Assumptions, Methods and
Benefits 0 0 0 0
(7) Change to UAAL Due to Actuarial (Gain)/Loss (682,250) (115,324) 10,352,116 230,868
(8) Unfunded Actuarial Accrued Liability as of June 30, 2025 (903,242) (849,882) (5,868,680) (3,256,078)
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
17
AMORTIZATION OF UNFUNDED LIABILITIES - TIERS 1 & 2
Date Established Outstanding Balance Years Remaining Amortization Rate
PENSION 6/30/2019 0 11 0.00%
6/30/2021 874,759 11 1.28%
6/30/2022 (2,225,517) 12 (3.09%)
6/30/2023 5,320,644 13 7.02%
6/30/2024 (2,829,342) 14 (3.57%)
6/30/2025 (2,043,786) 15 (2.48%)
Total (903,242) (0.84%)
HEALTH 6/30/2019 0 10 0.00%
6/30/2021 0 10 0.00%
6/30/2022 0 10 0.00%
6/30/2023 0 10 0.00%
6/30/2024 0 10 0.00%
6/30/2025 (740,927) 10 (1.16%)
Total (740,927) (1.16%)
AMORTIZATION OF UNFUNDED LIABILITIES - TIER 3
Date Established Outstanding Balance Years Remaining Amortization Rate 1
PENSION 6/30/2018 73,371 3 0.01%
6/30/2019 (738,175) 4 (0.06%)
6/30/2020 538,283 5 0.03%
6/30/2021 (1,923,660) 6 (0.10%)
6/30/2022 (3,334,717) 7 (0.16%)
6/30/2023 (1,260,287) 8 (0.05%)
6/30/2024 (5,258,441) 9 (0.21%)
6/30/2025 6,034,946 10 0.22%
Total (5,868,680) 0.00%
HEALTH 6/30/2018 (1,556) 3 0.00%
6/30/2019 (67,490) 4 (0.01%)
6/30/2020 (136,697) 5 (0.01%)
6/30/2021 (277,936) 6 (0.01%)
6/30/2022 (396,707) 7 (0.02%)
6/30/2023 (639,631) 8 (0.03%)
6/30/2024 (1,050,040) 9 (0.04%)
6/30/2025 (686,021) 10 (0.02%)
Total (3,256,078) 0.00%
1 By Statute, negative total amortization rates are not subtracted in Tier 3 rate calculations.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
18
ASSET SUPPORT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR YEAR ENDED JUNE 30, 2025
Tiers 1 & 2 Tier 3
Pension Health Pension Health
ADDITIONS Contributions
Member Contributions $ 108,640,873 $ 0 $ 61,005,633 $ 0
Employer Contributions 1,069,823,308 0 59,252,766 0
Health Insurance Contributions 0 4,098,668 0 1,553,978
Total Contributions 1,178,464,181 4,098,668 120,258,399 1,553,978
Investment Income Net Increase in Fair Value 1,390,120,909 34,877,805 45,105,036 1,105,501
Interest and Dividends 259,062,270 6,499,811 8,405,753 206,021
Other Income 150,210,467 3,767,860 4,873,856 119,427
Less Investment Expenses (35,364,426) (728,394) (1,147,464) (23,087)
Net Investment Income 1,764,029,220 44,417,082 57,237,181 1,407,862
Non-investment Income 0 0 0 0
Transfers In 288,360 0 206,733 0
Total Additions 2,942,781,761 48,515,750 177,702,313 2,961,840
DEDUCTIONS
Distributions to Members Benefit Payments 1,218,594,305 0 852,434 0
Health Insurance Subsidy 0 18,660,709 0 6,480
Refund of Contributions 12,178,168 0 2,803,612 0
Total Distributions 1,230,772,473 18,660,709 3,656,046 6,480
Administrative Expenses 7,838,369 201,658 254,475 6,392
Transfers Out 67,338 0 0 0
Other 0 0 0 0
Total Deductions 1,238,678,180 18,862,367 3,910,521 12,872
NET INCREASE / (DECREASE) 1,704,103,581 29,653,383
173,791,792 2,948,968
NET POSITION HELD IN TRUST
Prior Valuation 15,933,751,686 411,840,936 398,698,171 11,044,818
Beginning of the Year Adjustment 0 0 0 0
End of the Year 17,637,855,267 441,494,319 572,489,963 13,993,786
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
19
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 87,257,612 87,257,612 87,257,612 87,257,612 87,257,612 87,257,612 87,257,610
2024 Experience 62,439,795 62,439,795 62,439,795 62,439,795 62,439,795 62,439,792
2023 Experience 10,197,720 10,197,720 10,197,720 10,197,720 10,197,717
2022 Experience (204,451,249) (204,451,249) (204,451,249) (204,451,249)
2021 Experience 238,978,744 238,978,744 238,978,745
2020 Experience (68,882,158) (68,882,160)
2019 Experience (22,859,275)
Total Amortization 102,681,189 125,540,462 194,422,623 (44,556,122) 159,895,124 149,697,404 87,257,610
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 7.9%
A. Investment Income
A1. Actual Investment Income $ 1,756,190,851
A2. Expected Amount for Immediate Recognition 1,145,387,569
A3. Amount Subject to Amortization 610,803,282
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 15,769,616,678
C2. Non-investment Net Cash Flow (52,087,270)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 16,965,598,166
C4. Market Value of Assets, June 30, 2025 17,637,855,267 94,785,694
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 16,965,598,166 91,172,990
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
20
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 2,154,000 2,154,000 2,154,000 2,154,000 2,154,000 2,154,000 2,153,999
2024 Experience 1,556,610 1,556,610 1,556,610 1,556,610 1,556,610 1,556,608
2023 Experience 193,035 193,035 193,035 193,035 193,036
2022 Experience (6,416,469) (6,416,469) (6,416,469) (6,416,471)
2021 Experience 9,257,478 9,257,478 9,257,481
2020 Experience (2,898,713) (2,898,716)
2019 Experience (1,075,572)
Total Amortization 2,770,369 3,845,938 6,744,657 (2,512,826) 3,903,646 3,710,608 2,153,999
D. Rates of Return
D1. Market Value Rate of Return 10.9%
D2. Actuarial Value Rate of Return 8.0%
A. Investment Income
A1. Actual Investment Income $ 44,215,424
A2. Expected Amount for Immediate Recognition 29,137,425
A3. Amount Subject to Amortization 15,077,999
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 406,302,544
C2. Non-investment Net Cash Flow (14,562,041)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 423,648,297
C4. Market Value of Assets, June 30, 2025 441,494,319 1,971,472
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 423,648,297 1,891,781
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
21
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 3
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029
2025 Experience (A3 / 5) 5,010,932 5,010,932 5,010,932 5,010,932 5,010,934
2024 Experience 3,027,823 3,027,823 3,027,823 3,027,823
2023 Experience 885,521 885,521 885,520
2022 Experience (3,259,379) (3,259,381)
2021 Experience 3,551,938
Total Amortization 9,216,835 5,664,895 8,924,275 8,038,755 5,010,934
D. Rates of Return
D1. Market Value Rate of Return 12.5%
D2. Actuarial Value Rate of Return 9.2%
A. Investment Income
A1. Actual Investment Income $ 56,982,706
A2. Expected Amount for Immediate Recognition 31,928,044
A3. Amount Subject to Amortization 25,054,662
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 386,897,139
C2. Non-investment Net Cash Flow 116,809,086
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 544,851,104
C4. Market Value of Assets, June 30, 2025 572,489,963 266,158,721
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 544,851,104 253,309,023
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
22
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 3
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029
2025 Experience (A3 / 5) 115,017 115,017 115,017 115,017 115,018
2024 Experience 84,292 84,292 84,292 84,290
2023 Experience 23,872 23,872 23,870
2022 Experience (101,792) (101,790)
2021 Experience 128,961
Total Amortization 250,350 121,391 223,179 199,307 115,018
D. Rates of Return
D1. Market Value Rate of Return 11.9%
D2. Actuarial Value Rate of Return 9.4%
A. Investment Income
A1. Actual Investment Income $ 1,401,470
A2. Expected Amount for Immediate Recognition 826,384
A3. Amount Subject to Amortization 575,086
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 10,710,659
C2. Non-investment Net Cash Flow 1,547,498
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 13,334,891
C4. Market Value of Assets, June 30, 2025 13,993,786 6,893,472
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 13,334,891 6,568,894
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
23
MEMBER STATISTICS
STATISTICAL DATA – ACTIVE MEMBERS
June 30, 2025 June 30, 2024
Tiers 1 & 2 Tier 3 Tiers 1 & 2 Tier 3
ACTIVES
Number 38 35 46 29
Average Current Age 42.7 29.2 42.0 28.3
Average Age at Employment 26.5 26.3 26.2 25.9
Average Past Service 16.2 2.9 15.8 2.4
Average Annual Salary $106,438 $71,511 $107,180 $71,169
ACTIVES (TRANSFERRED)
Number 9 8 8 6
Average Current Age 37.8 29.5 37.6 28.6
Average Age at Employment 25.1 25.7 25.5 25.5
Average Past Service 12.6 3.8 12.2 3.1
Average Annual Salary $93,208 $75,237 $90,578 $74,123
Total Number (Active) 47 43 54 35
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
24
STATISTICAL DATA – INACTIVE MEMBERS
June 30, 2025 June 30, 2024
Tiers 1 & 2 Tier 3 Tiers 1 & 2 Tier 3
RETIREES
Number 49 1 42 0
Average Current Age 59.1 0.6 59.3 N/A
Average Annual Benefit $58,756 $110 $57,763 N/A
DROP RETIREES
Number 11 N/A 12 N/A
Average Current Age 52.0 N/A 53.8 N/A
Average Annual Benefit $63,695 N/A $65,115 N/A
BENEFICIARIES
Number 7 0 7 0
Average Current Age 71.5 N/A 70.5 N/A
Average Annual Benefit $36,891 N/A $36,168 N/A
DISABILITY RETIREES
Number 12 0 12 0
Average Current Age 57.5 N/A 56.5 N/A
Average Annual Benefit $43,100 N/A $42,255 N/A
INACTIVE / VESTED
Number 8 3 9 3
Average Current Age 49.6 33.2 47.4 32.2
Average Accumulated
Contributions $37,771 $13,986 $38,305 $13,517
TOTAL NUMBER (INACTIVE) 87 4 82 3
FORMER MEMBERS (TRANSFERRED) 7 6 6 6
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
25
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIERS 1 & 2
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<20 0 0 0 0 0 0 0 0 0 0
20 - 24 0 0 0 0 0 0 0 0 0 0
25 - 29 0 0 0 0 0 0 0 0 0 0
30 - 34 0 4 5 0 0 0 0 9 905,591 100,621
35 - 39 0 1 10 3 0 0 0 14 1,517,244 108,375
40 - 44 0 0 2 7 2 0 0 11 1,198,641 108,967
45 - 49 0 0 1 3 4 0 0 8 839,622 104,953
50 - 54 0 0 0 1 0 0 0 1 98,849 98,849
55 - 59 0 0 0 1 1 0 0 2 209,546 104,773
60 - 64 0 0 0 1 0 0 1 2 114,037 57,019
65+ 0 0 0 0 0 0 0 0 0 0
Total 0 5 18 16 7 0 1 47 4,883,530 103,905
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
26
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIER 3
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<20 0 0 0 0 0 0 0 0 0 0
20 - 24 3 0 0 0 0 0 0 3 188,112 62,704
25 - 29 21 2 0 0 0 0 0 23 1,636,652 71,159
30 - 34 10 3 0 0 0 0 0 13 941,195 72,400
35 - 39 1 3 0 0 0 0 0 4 338,839 84,710
40 - 44 0 0 0 0 0 0 0 0 0 0
45 - 49 0 0 0 0 0 0 0 0 0 0
50 - 54 0 0 0 0 0 0 0 0 0 0
55 - 59 0 0 0 0 0 0 0 0 0 0
60 - 64 0 0 0 0 0 0 0 0 0 0
65+ 0 0 0 0 0 0 0 0 0 0
Total 35 8 0 0 0 0 0 43 3,104,798 72,205
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
27
AGE DISTRIBUTIONS – INACTIVE MEMBERS
Retirees, Disableds and
Beneficiaries
Age Count
Average Annual
Pensions
<40 1 110
40-45 0 0
45-49 12 50,861
50-54 13 52,961
55-59 17 56,574
60-64 6 52,897
65-69 7 66,129
70-74 7 44,294
75-79 3 47,792
80-84 3 53,393
85-89 0 0
90-94 0 0
95-99 0 0
100+ 0 0
Total 69 52,965
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
28
ACTUARIAL ASSUMPTIONS AND METHODS
Interest Rate This is the assumed earnings rate on System assets, compounded
annually, net of investment and administrative expenses.
Tiers 1 & 2: 7.20% per year.
Tier 3: 7.00% per year.
Mortality Rate Active Lives:
PubS-2010 Employee mortality, adjusted by a factor of 1.03 for male
members and 1.08 for female members, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021). 100% of active deaths are assumed to be
in the line of duty.
Inactive Lives:
PubS-2010 Healthy Retiree mortality, adjusted by a factor of 1.03
for male retirees and 1.11 for female retirees, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021).
Beneficiaries:
PubS-2010 Survivor mortality, adjusted by a factor of 0.98 for male
beneficiaries and adjusted by a factor of 1.06 for female
beneficiaries, with generational improvements using 85% of the
most recent projection scale (currently Scale MP-2021).
Disabled Lives:
PubS-2010 Disabled mortality, adjusted by a factor of 1.08 for male
disabled members and 1.01 for female disabled members, with
generational improvements using 85% of the most recent projection
scale (currently Scale MP-2021).
The mortality assumptions sufficiently accommodate anticipated
future mortality improvements.
Retirement / DROP Rates These rates are used to project future decrements from the active
population due to retirement. The rates below are based on a 2022
experience study using actual plan experience.
Tier 1 – reaching age 62 before attaining 20 years of service:
Age-related rates based on age at retirement:
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
29
Police - 40% assumed at age 62 and 63, 35% assumed at age 64,
25% assumed at ages 65 and 66, 50% assumed at ages 67 – 69, and
100% assumed at age 70.
Fire - 25% assumed at age 62 and 63, 35% assumed at age 64, 25%
assumed at ages 65 and 66, 50% assumed at ages 67 – 69, and 100%
assumed at age 70.
Tier 1 – reaching age 62 after attaining 20 years of service:
Service-related rates based on service at retirement. See complete
tables at the end of this section.
65% are assumed to enter the DROP program while the remaining
35% are assumed to retire and commence benefits immediately.
DROP periods are assumed to be 5 years in length for future DROP
elections.
Tiers 2 & 3:
Age-related rates based on age at retirement. 50% assumed at age
53, 30% assumed at ages 54 – 59, 60% assumed at ages 60 – 63, and
100% assumed at age 64.
Disability Rate These rates are used to project future decrements from the active
population due to disability. Complete table of rates based on age
at disability are provided at the end of this section. These rates are
based on a 2022 experience study using actual plan experience.
90% of disablements are assumed to be duty-related.
Termination Rate These rates are used to project future decrements from the active
population due to termination. Complete table of rates based on
service at termination are provided at the end of this section. The
rates apply to members prior to retirement eligibility and are based
on a 2022 experience study using actual plan experience.
Inflation 2.50%.
Tier 3 Compensation Limit $140,952 for calendar 2024. Assumed increases of 2.00% per year
thereafter.
Cost-of-Living Adjustment 1.85%.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
30
Salary Increases See table at the end of this section. This is an annual increase for
individual member’s salary. These rates are based on a 2022
experience study using actual plan experience.
Marital Status For active members, 85% of males and 60% of females are assumed to be
married. Actual marital status is used, where applicable, for inactive
members.
Spouse’s Age Males are assumed to be three years older than females.
Benefit Commencement Deferred members are assumed to commence benefits as follows:
Tier 1: immediate refund of contributions
Tiers 2 & 3 (less than 15 years service): immediate refund of
contributions
Tier 2 (15+ years service): life annuity payable at age 52.5
Tier 3 (15+ years service): life annuity payable at age 55
Health Care Utilization For active members, 70% of retirees are expected to utilize retiree
health care. Actual utilization is used for inactive members.
Funding Method Entry Age Normal Cost Method.
Lateral Transfers When active members transfer between employers, the new
employer’s liability starts from their new date of hire with no past
service liability (i.e., all liability is accrued through normal cost). Per
PSPRS administrative decision, once the new employer’s liability is
fully funded, the liability will reflect all past service liability.
Actuarial Asset Method Each year the assumed investment income is recognized in full while
the difference between actual and assumed investment income are
smoothed over a fixed period (7 years for Tiers 1 & 2; 5 years for
Tier 3). Actuarial Assets shall not be less than 80% nor greater than
120% of the Market Value of Assets. Note that during periods when
investment performance exceeds (falls short) of the assumed rate,
the actuarial value of assets will tend to be less (greater) than the
market value of assets.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
31
Amortization Method See Funding Policy for complete details. In short:
Tiers 1 & 2:
Any positive UAAL (assets less than funding policy targets) is
amortized using a layered approach according to a Level
Dollar method over a closed period of 15 years (phased into
from current period).
Any negative UAAL (assets greater than funding policy
targets) is amortized according to a Level Dollar method
over an open period of 10 years.
Tier 3:
Any positive UAAL (assets less than liabilities) is amortized
according to a Level Dollar method over a closed period of
10 years.
No amortization is made of any negative UAAL (assets
greater than liabilities).
Payroll Growth 1.50% per year. This is the annual increase expected on total
employer payroll.
CHANGES SINCE THE PRIOR VALUATION
The payroll growth assumption was lowered from 2.00% to 1.50%.
There were no method changes since the prior valuation.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
32
SALARY INCREASE RATES
Age
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 15.00% 12.00% 14.00% 15.00% 12.00% 13.00%
21 14.00% 6.00% 12.00% 14.00% 11.00% 12.00%
22 13.00% 6.00% 10.00% 13.00% 10.00% 11.00%
23 12.00% 6.00% 9.00% 12.00% 9.50% 10.00%
24 11.00% 6.00% 8.00% 11.00% 9.00% 9.00%
25 10.00% 6.00% 7.00% 10.00% 8.50% 8.00%
26 9.00% 5.50% 6.50% 9.50% 7.50% 7.50%
27 8.00% 5.50% 6.25% 9.00% 6.50% 7.50%
28 7.50% 5.50% 6.00% 8.50% 5.75% 7.00%
29 7.00% 5.50% 5.80% 8.00% 5.75% 6.50%
30 6.50% 5.25% 5.60% 8.00% 5.50% 6.50%
31 6.00% 5.25% 5.40% 7.50% 5.50% 6.00%
32 5.50% 5.00% 5.20% 7.00% 5.00% 5.50%
33 5.10% 5.00% 5.00% 6.50% 5.00% 5.50%
34 4.90% 5.00% 4.90% 6.50% 5.00% 5.50%
35 4.70% 4.50% 4.80% 6.00% 5.00% 5.50%
36 4.50% 4.50% 4.70% 5.50% 5.00% 5.50%
37 4.30% 4.50% 4.60% 5.25% 4.50% 5.00%
38 4.10% 4.00% 4.50% 5.00% 4.50% 5.00%
39 4.00% 4.00% 4.40% 4.75% 4.50% 5.00%
40 3.90% 4.00% 4.30% 4.75% 4.50% 5.00%
41 3.80% 3.80% 4.20% 4.50% 4.50% 4.50%
42 3.70% 3.60% 4.10% 4.50% 4.00% 4.50%
43 3.60% 3.40% 4.00% 4.50% 4.00% 4.50%
44 3.50% 3.20% 3.90% 4.50% 4.00% 4.00%
45 3.50% 3.00% 3.80% 4.25% 4.00% 4.00%
46 3.50% 3.00% 3.70% 4.25% 3.75% 4.00%
47 3.50% 3.00% 3.60% 4.25% 3.75% 3.75%
48 3.50% 3.00% 3.50% 4.00% 3.75% 3.75%
49 3.50% 3.00% 3.50% 4.00% 3.50% 3.75%
50 3.25% 3.00% 3.50% 3.75% 3.50% 3.75%
51 3.25% 3.00% 3.50% 3.75% 3.50% 3.75%
52 3.25% 2.75% 3.50% 3.75% 3.50% 3.75%
53+ 3.25% 2.75% 3.50% 3.75% 3.25% 3.75%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
33
Service
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
0 13.0% 14.0% 13.5% 4.5% 10.0% 10.5%
1 8.0% 9.0% 11.5% 3.5% 6.0% 8.5%
2 6.0% 7.5% 10.5% 2.5% 4.5% 8.0%
3 4.5% 7.0% 9.5% 2.0% 4.0% 8.0%
4 3.6% 6.5% 9.0% 1.5% 4.0% 7.0%
5 3.3% 5.0% 8.0% 1.5% 4.0% 5.0%
6 3.3% 5.0% 7.0% 1.5% 4.0% 5.0%
7 3.3% 4.0% 6.5% 1.5% 3.0% 4.0%
8 2.4% 4.0% 6.5% 1.5% 3.0% 4.0%
9 2.4% 4.0% 6.0% 1.5% 3.0% 3.5%
10 2.4% 4.0% 5.0% 1.0% 2.0% 3.0%
11 1.8% 3.0% 4.0% 1.0% 2.0% 2.5%
12 1.8% 3.0% 4.0% 1.0% 1.5% 2.0%
13 1.3% 2.0% 3.5% 1.0% 1.0% 1.5%
14 1.3% 2.0% 3.0% 0.5% 1.0% 1.4%
15 0.8% 1.5% 2.5% 0.5% 1.0% 1.4%
16 0.8% 1.5% 2.0% 0.5% 0.5% 1.4%
17 0.8% 1.0% 2.0% 0.5% 0.5% 1.4%
18 0.8% 1.0% 1.8% 0.5% 0.5% 1.4%
19 0.8% 1.0% 1.8% 0.5% 0.5% 0.5%
20+ 0.5% 1.0% 1.8% 0.4% 0.5% 0.5%
TIER 1 RETIREMENT RATES– REACHING AGE 62 AFTER ATTAINING 20 YEARS OF SERVICE
TERMINATION RATES
Service
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 28% 28% 35% 14% 20% 20%
21 25% 25% 35% 17% 20% 25%
22 15% 16% 22% 7% 13% 15%
23 12% 12% 12% 7% 7% 10%
24 8% 9% 12% 7% 7% 10%
25 30% 22% 25% 17% 22% 30%
26 42% 42% 40% 30% 26% 30%
27 32% 30% 28% 23% 30% 30%
28 32% 30% 28% 30% 30% 30%
29 32% 20% 28% 30% 30% 30%
30 35% 25% 35% 30% 30% 35%
31 35% 33% 30% 40% 30% 35%
32 60% 50% 70% 55% 30% 35%
33 60% 50% 70% 55% 60% 60%
34+ 100% 100% 100% 100% 100% 100%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
34
DISABILITY RATES
Age
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
21 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
22 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
23 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
24 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
25 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
26 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
27 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
28 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
29 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
30 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
31 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
32 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
33 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
34 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
35 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
36 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
37 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
38 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
39 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
40 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
41 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
42 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
43 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
44 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
45 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
46 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
47 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
48 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
49 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
50 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
51 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
52 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
53 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
54 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
55 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
56+ 1.000% 0.850% 0.900% 1.100% 0.800% 1.000%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
35
PLAN PROVISIONS
The following is a summary of the benefit provisions provided in Title 38, Chapter 5, Article 4 of the
Arizona Revised Statutes.
Membership Full-time employees of an eligible group, prior to attaining age 65,
who are engaged to work for more than six months in a calendar
year. Tier 3 Defined Contribution members are able to elect
participation in post-retirement health insurance subsidy.
Benefit Tiers Benefits differ for members based on their hire date:
Tier 1: Hired before January 1, 2012
Tier 2: Hired on or after January 1, 2012 but before July 1, 2017
Tier 3: Hired on or after July 1, 2017
Compensation Compensation is the amount including base salary, overtime pay, shift
and military differential pay, compensatory time used in lieu of
overtime pay, and holiday pay, paid to an employee on a regular
payroll basis and longevity pay paid at least every six months for which
contributions are made to the System. For Tier 3 members,
compensation is limited by statutory cap ($110,000 with adjustments
by the Board).
Average Monthly Benefit Tier 1: The highest compensation paid to member during three
Compensation consecutive years out of the last 20 years of Credited Service, divided
by months.
Tier 2: The highest compensation paid to member during five
consecutive years out of the last 20 years of Credited Service, divided
by months.
Tier 3: The highest compensation paid to member during five
consecutive years out of the last 15 years of Credited Service, divided
by months.
Credited Service Total periods of service, both before and after the member’s date of
participation, for which the member made contributions to the fund.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
36
Normal Retirement
Date Tier 1: First day of month following attainment of 1) 20 years of service
or 2) 62nd birthday and completion of 15 years of service.
Tier 2: First day of month following the attainment of age 52.5 and
completion of 15 years of service.
Tier 3: First day of month following the attainment of age 55 and
completion of 15 years of service.
Benefit Tier 1: 50% of Average Monthly Benefit Compensation, adjusted
based on Credited Service as follows (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Adjustment
15 years, but less than 20 Reduced 4% per year less than 20
20 years, but less than 25 Plus 2% per year between 20 and 25
25+ years Plus 2.5% per year above 20
Tier 2: Benefit multiplier (below) times Average Monthly Benefit
Compensation times Credited Service (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Multiplier
15 years, but less than 17 1.50%
17 years, but less than 19 1.75%
19 years, but less than 22 2.00%
22 years, but less than 25 2.25%
25+ years 2.50%
Tier 3: Benefit multiplier (below) times Average Monthly Benefit
Compensation times Credited Service (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Multiplier
15 years, but less than 17 1.50%
17 years, but less than 19 1.75%
19 years, but less than 22 2.00%
22 years, but less than 25 2.25%
25+ years 2.50%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
37
Form of Benefit For married retirees, an annuity payable for the life of the member
with 80% continuing to the eligible spouse upon death. For
unmarried retirees, the normal form is a single life annuity.
Early Retirement Only applicable to Tier 3 members
Date Attainment of age 52.5 and 15 years of Credited Service.
Benefit Actuarial equivalent of Normal Retirement benefit.
Form of Benefit Same as Normal Retirement
Disability Benefit – Accidental (duty-related)
Eligibility Total and permanent disability incurred in performance of duty.
Benefit Amount A maximum of:
a.) 50% of Average Monthly Benefit Compensation, and;
b.) The monthly retirement pension that the Member is
entitled to receive if he or she retired immediately.
Disability Benefit – Ordinary (not duty-related)
Eligibility Total and permanent disability not incurred in performance of duty.
Benefit Amount Normal Retirement pension that the member is entitled to receive,
prorated based on Credited Service earned over the required Credited
Service for Normal Retirement (maximum ratio of 1).
Disability Benefit – Other
Temporary Benefit equals 1/12 of 50% of compensation during year preceding
date of disability. Payments terminate after 12 months.
Catastrophic Benefit equals 90% of Average Monthly Benefit Compensation. After
60 months member receives greater of 62.5% Average Monthly
Benefit Compensation and accrued normal pension.
Pre-Retirement Death Benefit Payable following death of active member
Service Incurred 100% of Average Monthly Benefit Compensation, reduced by child’s
pension.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
38
Non-Service Incurred 80% of benefit based on calculation for accidental disability
retirement.
Child’s Pension 10% of pension for each child (maximum 20% paid) based on
calculation for accidental disability retirement. Payable to dependent
child under age 18 (23 if full-time student).
Guardian’s Pension Same as spouse’s pension. Payable (along with child’s pension) when
no spouse is being paid and there is at least one child under 18 (23, if
full-time student).
Accumulated Contributions Any contributions remaining upon the death of the last beneficiary
shall be paid as a lump sum.
Vesting (Termination)
Vesting Service Requirement Tier 1: 10 years.
Tiers 2 & 3: 15 years.
Non-Vested Benefit Tier 1: Lump sum payment of accumulated contributions, plus
additional amount based on years of Credited Service.
Service Additional % of Contributions
Less than 5 years 0%
5 years 25%
6 years 40%
7 years 55%
8 years 70%
9 years 85%
10+ years 100%
Tiers 2 & 3: Lump sum payment of accumulated contributions, with
interest at rate determined by the Board.
Vested Benefit Tier 1: Deferred retirement annuity based on two times member’s
accumulated contributions, deferred to age 62. Member is not
entitled to survivor benefits, benefit increases, or group health
insurance subsidy.
Tiers 2 & 3: Calculated same as normal retirement pension. Payable
if contributions left in fund until reach age requirement. Member is
entitled to survivor benefits, benefit increases, and group health
insurance subsidy.
Cost-of-Living Adjustment Payable to retired member or survivor of retired member
Tiers 1 & 2: Compound cost-of-living adjustment on base benefit. First
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
39
payment is made on July 1, 2018, with annual adjustments effective
every July 1 thereafter. Adjustment does not apply while in DROP.
Cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. Maximum increase of 2%.
Tier 3: Compound cost-of-living adjustment on base benefit beginning
earlier of first calendar year after the 7th anniversary of retirement or
when the retired member reaches 60 years of age.
A cost-of-living adjustment shall be paid on July 1 each year that the
funded ratio for members hired on or after July 1, 2017 is 70% or more.
The cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. The cost-of-living adjustment will not exceed:
2%, if funded ratio for members who are hired on or after July
1, 2017 is 90% or more;
1.5%, if funded ratio for members who are hired on or after
July 1, 2017 is 80-90%;
1%, if funded ratio for members who are hired on or after July
1, 2017 is 70-80%.
Deferred Retirement Option Plan (DROP)
Eligibility Tier 1 and 20 years of Credited Service.
DROP Period Maximum 84 months.
Member Contributions Cease upon DROP entry.
Benefit Amount Calculated based on Credited Service and average monthly
compensation as of the beginning of the DROP period, credited to
DROP participation account for DROP period.
Interest on DROP Beginning Year Interest Rate
Participation Account July 1, 2016 7.40%
July 1, 2018 7.30%
July 1, 2022 7.20%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
40
Payment of DROP Payable as lump sum distribution to Public Safety Personnel
Participation Account Defined Contribution Retirement Plan at earlier of 1) end of DROP
period, 2) at termination, or 3) five years.
Payment Monthly Benefit System commences payment of benefit amount at the earlier of 1)
the end of the DROP period and 2) at termination
Post-Retirement Health Insurance Subsidy
Eligibility Retired member or survivor who elect health coverage provided by
the state or participating employer.
Maximum Subsidy Amounts (monthly) Member Only With Dependents
Medicare Eligible $100 $170
One w/ Medicare N/A $215
Not Medicare Eligible $150 $260
Contributions
Employee Tiers 1 & 2: 7.65% (effective July 1, 2023).
Tier 3: 50% of total contribution, which is Normal Cost plus a level-
dollar amortization of unfunded actuarial accrued liability over a
closed period not to exceed 10 years.
Employer Tiers 1 & 2: Normal Cost plus amortization of unfunded actuarial
accrued liability over a closed period not to exceed 20 years (subject
to one-time election to extend to closed period not to exceed 30
years).
Tier 3: 50% of total contribution, which is Normal Cost plus a level-
dollar amortization of unfunded actuarial accrued liability over a
closed period not to exceed 10 years.
CHANGES SINCE THE PRIOR VALUATION
None.
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ACTUARIAL FUNDING POLICY
A pension plan funding policy describes how pension funding will improve for underfunded plans or maintain
funded benefits for funded plans over time for those benefits defined in Arizona Revised Statutes (ARS). Those
benefits defined in ARS are to be equitably managed and administered by the Arizona Public Safety Personnel
Retirement System (PSPRS agency).
This Actuarial Funding Policy identifies the funding objectives and elements of the actuarial funding policy set
by the Board for the PSPRS agency. The Board adopted this Funding Policy to help ensure the systematic
funding of future benefit payments for members of the retirement systems as established by the legislature.
This policy covers all retirements systems administered by the Board: The Public Safety Personnel Retirement
System (PSPRS); the Correction Officers Retirement Plan (CORP); and the Elected Officials Retirement Plan
(EORP).
To achieve the systematic funding of future benefits, metrics are identified to measure the progress, or the
lack of progress, over time to identify trends. These trends inform the continuation of the current policies or
identify areas of needed research for consideration.
This funding policy is reviewed annually and adopted by the Board in accordance with ARS 38-863.02. This
policy was reviewed and adopted by the Board in September 2025.
PSPRS STATEMENT OF PURPOSE
The Purpose of the Public Safety Personnel Retirement System is to provide uniform, consistent, and equitable
statewide retirement programs for those who have been entrusted to our care.
FUNDING OBJECTIVES
1. Maintain adequate assets so that current plan assets, plus future contributions and investment earnings,
are sufficient to fund all benefits expected to be paid to members and their beneficiaries.
a. Corollary 1a: Current and future contributions should be calculated based upon assumptions that
reflect the Board’s best estimate of future experience and methods that appropriately allocate
costs to address generational equity.
b. Corollary 1b: While the shorter-term objective is to fully fund the Actuarial Accrued Liability (AAL)
that estimates benefits earned as of the valuation date, contributions should target the long-term
Present Value of Benefits (PVB) to fund all benefits and help offset risks.
c. As closed plans mature, the target funding should be 110% of AAL or 100% of PVB, whichever is
greater.
Arizona Public Safety Personnel Retirement System
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2. Maintain public policy goals of accountability and transparency through stakeholder communication and
education. Each policy element is clear in intent and effect, and each should be considered in a balanced
approach to determine how and when the funding requirements of the plan will be met.
a. Corollary 2a: Board shall provide stakeholders with separate reports and tools to help explain
current results as well as to help model future funding requirements.
3. Promote intergenerational equity. Defined benefit pensions are designed with a long-term perspective
and designed to minimize contribution volatility that cannot avoid some level of generational cost shift.
However, the goal is that each generation of members and employers (taxpayers) should, to the extent
possible, incur the cost of benefits for the employees who provide services to them, rather than shifting
those costs to other generations of members and employers (taxpayers).
a. Corollary 3a: A systematic reduction of the Unfunded Actuarial Accrued Liability (UAAL) over a
reasonable time period is paramount to achieving this objective.
Consideration can be given to reduce volatility, to the extent possible, of employer and employee contribution
rates as long as the integrity of the objectives listed above is not compromised.
ELEMENTS OF ACTUARIAL FUNDING POLICY
1. Actuarial Cost Method
a. The Entry Age Normal level percent of pay actuarial cost method of valuation shall be used in
determining the AAL and Normal Cost. Differences in the past between assumed experience and
actual experience (“actuarial gains and losses”) shall become part of the AAL. The Normal Cost
shall be determined on an individual basis for each active member.
2. Asset Smoothing Method
a. The investment gains or losses of each valuation period, resulting from the difference between
the actual investment return and assumed investment return, shall be recognized annually in level
amounts over five years (Tier 3) or seven years (Tiers 1 and 2) in calculating the Actuarial Value of
Assets (AVA).
b. The AVA so determined shall be subject to a 20% corridor relative to the Market Value of Assets
(MVA).
3. Amortization Method (Unfunded Amounts)
a. The AVA is subtracted from the computed AAL. Any unfunded amount is amortized as a level
percent of payroll over a closed period.
b. The unfunded liabilities, for EORP and Tiers 1 & 2 for both PSPRS and CORP, determined in the
6/30/2019 actuarial valuation will become the initial layer for each employer beginning with the
6/30/2020 actuarial valuation and amortized using the current closed year period for that
employer and continue to decrease each year.
i. The payroll growth rate assumption used to amortize the PSPRS Unfunded Liability will be
decreased by 0.75% each year with the intention of ultimately achieving 0.0%.
Arizona Public Safety Personnel Retirement System
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ii. The payroll growth rate used to amortize the Correction Officers Retirement Plan (CORP)
Unfunded Liability will be reduced by 0.5% until 0.0% is reached.
iii. The payroll growth rate used to amortize the Elected Officials Retirement Plan (EORP)
Unfunded Liability will be 0.0%.
c. Gains and losses, for EORP and Tiers 1 & 2 for both PSPRS and CORP, for each employer beginning
with the 6/30/2020 actuarial valuation will be amortized as a new layer over the same
amortization period as the regular unfunded liability to a minimum of 15 years. Once the
amortization period for each employer decreases to 15 years, each subsequent year’s gains and
losses will be amortized as a new 15-year closed layer.
i. The payroll growth rate used to amortize the unfunded liability for all Plans under this
paragraph will be 0.0% (i.e. level-dollar amortization).
d. Tier 3 amortization methods are established in ARS 38-843.G and ARS 38-891.K.
4. Amortization Method (Overfunded Amounts)
a. The AVA is subtracted from the target funding level (greater of 110% of AAL or 100% of PVB). Any
overfunded amount is amortized as a level dollar amount over an open 10-year period.
5. Tier 3 Rate Calculation
a. Tier 3 is distinct from Tiers 1 & 2 in PSPRS and CORP as the contributions are a shared percentage
(50/50 split for PSPRS: for CORP, employer 1/3 and member 2/3 of the normal cost plus 50 percent
each, member and employer, of the UAAL amortization) for employers and members based on
the actuarially calculated rate. To reduce the impact of volatility to rates, the Tier 3 rates will be
smoothed over a 3-year rolling period based on the actuarially calculated rates for each year’s
actuarial valuation.
i. Beginning with the 6/30/2023 valuation, the prospective Tier 3 rates set by the Board of
Trustees are planned to be a rolling average of the actuarial calculated Tier 3 rates using
the 6/30/2023, 6/30/2022 and 6/30/2021 rates in the initial process.
ii. As assumptions may be updated year-to-year, the prior calculated rates are not updated
for those changes, the prior calculated rates are used to smooth in the new rates.
b. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board
committed to continue to monitor market conditions and directions with the intent to ultimately
adopt a single assumed rate of return for all investments for retirement systems/plans
administered by PSPRS agency.
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6. Assumed Rate of Return (ARR)
a. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board will
continue to monitor market conditions and directions with the intent to ultimately adopt a single
assumed rate of return for all investments for retirement systems/plans administered by PSPRS
agency.
7. EORP Floor Considerations
a. Establish a “floor” for EORP based on the immediately previous valuation by adjusting payroll
growth, amortization periods of the original layer or other possible options, to improve funding
in maintaining contribution levels opposed to reducing employer contributions.
METRICS TO MONITOR FUNDING OBJECTIVES
1. Appropriateness of Assumptions – Gain/Loss Experience (Corollary 1a)
a. Metric: Do the cumulative gain/loss layers over the prior five years exceed 8% of plan assets?
b. Measurement: History of annual gain/loss (split by asset and liability experience) and five-year
cumulative results will be tracked.
c. Action Plan: This metric assumes that a full experience study is performed at least every five years so
objective of measurement is to monitor interim experience. If the metric answer is yes, a review of
the sources or causes of gains and losses should be analyzed and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation are
intended to provide a basis for consideration if assumption changes are warranted between full
experience studies.
2. Funding Targets (Corollary 1b)
a. Metric: Has the funded status, on both an AAL and PVB basis when compared to the MVA, increased
over a five-year period?
b. Measurement: History of funded status measures will be tracked.
c. Action Plan: If the answer is no and not readily explainable (e.g., significant assumption change), a
review of the reason(s) for the decrease should be researched and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation
are intended to provide a basis for consideration if changes to assumptions and/or methods are
warranted between full experience studies.
3. Communication with Stakeholders (Corollary 2a)
a. Metric: Have reports and budgeting tools been provided to stakeholders in a timely fashion?
b. Measurement: Yes/No answer based on input from PSPRS administrator. (An annual standard survey
of stakeholders – 3 to 5 questions.)
c. Action Plan: If the answer is no, and periodically regardless (e.g., every three years), PSPRS staff will
revisit this metric to report to the Advisory Committee to provide a recommendation to the Board of
Trustees if current reports / tools are sufficient and if the delivery timing is appropriate.
Arizona Public Safety Personnel Retirement System
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4. Timely Recognition of Costs (Corollary 3a)
a. Metric: Has the percentage of unfunded liability subject to negative amortization decreased over a
five-year lookback period?
b. Measurement: History of unfunded liability subject to negative amortization as a percentage of total
unfunded liability will be tracked.
c. Action Plan: If the answer is no, and not readily explainable (e.g., adopted assumption changes being
phased in are anticipated to address negative amortization), a review of the reason(s) for negative
amortization should be researched and presented to the Advisory Committee to provide a
recommendation to the Board of Trustees. The analysis and presentation are intended to provide a
basis for consideration if changes to assumptions and/or methods are warranted between full
experience studies.
Arizona Public Safety Personnel Retirement System
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SUPPLEMENTARY INFORMATION
GLOSSARY
Accrued Benefit The benefit earned as of a specific date based on the provisions of
the plan and the member’s age, service, and salary as of that date.
Actuarial Accrued Liability The portion of the anticipated future benefits allocated to years
prior to the valuation date determined according to the plan’s
Actuarial Cost Method.
Actuarial Value of Assets The asset value used in the valuation to determine contribution
requirements. It represents the plan’s Market Value of Assets (see
below), with adjustments according to the plan’s Actuarial Asset
Method. These adjustments produce a “smoothed” value that is
likely to be less volatile from year to year than the Market Value of
Assets.
Actuarial Assumptions Assumptions regarding the occurrence of future events affecting
plan costs. These assumptions include rates of investment earnings,
changes in compensation, rates of mortality, withdrawal,
disablement, and retirement as well as statistics related to marriage
and family composition.
Actuarial Cost Method A method of determining the portion of the cost of a plan to be
allocated to each year; sometimes referred to as the "actuarial
funding method." Each cost method allocates a certain portion of
the actuarial present value of benefits between the Actuarial
Accrued Liability and future normal costs to ensure the plan is
adequately and systematically funded.
Actuarial Gain or Loss The change in Unfunded Actuarial Accrued Liability resulting from
experience different from Actuarial Assumptions. Gains decrease
the Unfunded Actuarial Accrued Liability and losses increase the
Unfunded Actuarial Accrued Liability.
Arizona Public Safety Personnel Retirement System
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Actuarial Present Value The estimated amount of funds required as of a specified date to
provide a payment or series of payments in the future. It is
determined by discounting future payments at predetermined rates
of interest, and by probabilities of payments between the specified
date and the expected date of payment.
Amortization Payment The portion of the plan contribution designated to pay interest and
reduce the outstanding principal balance of Unfunded Actuarial
Accrued Liability. If the amortization payment is less than the
accrued interest on the Unfunded Actuarial Accrued Liability the
outstanding principal balance will increase.
Decrements Events which result in the termination of membership in the system
such as retirement, disability, withdrawal, or death.
Entry Age Normal Cost Method Under this method, the normal cost is the sum of the individual
normal costs for all active participants. For an active participant,
the normal cost is the participant’s normal cost accrual rate,
multiplied by the participant’s current compensation.
The normal cost accrual rate equals:
(i) the present value of future benefits for the participant,
determined as of the participant’s entry
age, divided by
(ii) the present value of the compensation expected to be paid to
the participant for each year of the participant’s anticipated future
service, determined as of the participant’s entry age.
In calculating the present value of future compensation, the salary
scale is applied both retrospectively and prospectively to estimate
compensation in years prior to and subsequent to the valuation
year based on the compensation used for the valuation.
The accrued liability is the sum of the individual accrued liabilities
for all participants and beneficiaries. A participant’s accrued liability
equals the present value, at the participant’s attained age, of future
benefits less the present value at the participant’s attained age of
the individual normal costs payable in the future. A beneficiary’s
accrued liability equals the present value, at the beneficiary’s
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
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attained age, of future benefits. The unfunded accrued liability
equals the total accrued liability less the actuarial value of assets.
Under this method, the entry age used for each active participant is
the participant’s age at the time he or she would have commenced
participation if the plan had always been in existence under current
terms, or the age as of which he or she first earns service credits for
purposes of benefit accrual under the current terms of the plan.
Funded Ratio A measure of the ratio of the plan assets to liabilities of the system.
Typically, the assets used in the measure are the Actuarial Value of
Assets as determined by the asset valuation method. The Funded
Ratio depends not only on the financial strength of the plan but also
on the asset valuation method used to determine the assets and on
the Actuarial Cost Method used to determine the liabilities.
Interest Rate The assumed long-term rate of return on plan assets.
Market Value of Assets The fair market value of plan assets as of the valuation date.
Normal Cost The current year's cost for benefits yet to be funded. Under the
Entry Age Normal cost method, it is determined for each participant
as the present value of future benefits, determined as of the
Member’s entry age, amortized as a level percentage of
compensation over the anticipated number of years of
participation, determined as of the entry age.
Present Value of Benefits The single sum value on the valuation date of all future benefits to
be paid to current plan participants.
Projected Annual Payroll The projected annual rate of pay for the fiscal year following the
fiscal year beginning on the valuation date of all covered Members.
Projected Benefits The benefits expected to be paid in the future based on the
provisions of the plan and the Actuarial Assumptions. The projected
values are based on anticipated future advancement in age and
accrual of service as well as increases in salary paid to the
participant.
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Total Annual Payroll The projected annual rate of pay for the fiscal year beginning on the
valuation date of all covered Members.
Ultimate Cost The total cost to the plan once the last benefit has been paid. The
Ultimate Cost equals
Benefit Payments
Plus: Expenses
Less: Investment Income
The Ultimate Cost is independent of the Actuarial Cost Method
selected.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and the
Liability Actuarial Value of Assets. Under the Entry Age Normal Actuarial
Cost Method, an actuarial gain or loss, based on actual versus
expected UAAL, is determined in conjunction with each valuation
of the plan.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
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DISCUSSION OF RISK
ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and
Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary’s
professional judgment, may reasonably be anticipated to significantly affect the plan’s future financial
condition.
Throughout this report, actuarial results are determined using various actuarial assumptions. These results
are based on the premise that all future plan experience will align with the plan’s actuarial assumptions;
however, there is no guarantee that actual plan experience will align with the plan’s assumptions. It is possible
that actual plan experience will differ from anticipated experience in an unfavorable manner that will
negatively impact the plan’s funded position.
Below are examples of ways in which plan experience can deviate from assumptions and the potential impact
of that deviation. Typically, this results in an actuarial gain or loss representing the current-year financial
impact on the plan’s unfunded liability of the experience differing from assumptions; this gain or loss is
amortized over a period of time determined by the plan’s amortization method. When assumptions are
selected that adequately reflect plan experience, gains and losses typically offset one another in the long term,
resulting in a relatively low impact on the plan’s contribution requirements associated with plan experience.
When assumptions are too optimistic, losses can accumulate over time and the plan’s amortization payment
could potentially grow to an unmanageable level.
Investment Return: When the rate of return on the Actuarial Value of Assets falls short of the
assumption, this produces a loss representing assumed investment earnings that were not realized.
Further, it is unlikely that the plan will experience a scenario that matches the assumed return in each
year as capital markets can be volatile from year to year. Therefore, contribution amounts can vary in
the future.
Salary Increases: When a plan participant experiences a salary increase that was greater than
assumed, this produces a loss representing the cost of an increase in anticipated plan benefits for the
participant as compared to the previous year. The total gain or loss associated with salary increases
for the plan is the sum of salary gains and losses for all active participants.
Payroll Growth: The plan’s payroll growth assumption, if one is used, causes a predictable annual
increase in the plan’s amortization payment in order to produce an amortization payment that
remains constant as a percentage of payroll if all assumptions are realized. If payroll increases less
than the plan’s payroll growth assumption, the plan’s amortization payment can increase significantly
as a percentage of payroll even if all assumptions other than the payroll growth assumption are
realized.
Demographic Assumptions: Actuarial results take into account various potential events that could
happen to a plan participant, such as retirement, termination, disability, and death. Each of these
potential events is assigned a liability based on the likelihood of the event and the financial
consequence of the event for the plan. Accordingly, actuarial liabilities reflect a blend of financial
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
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consequences associated with various possible outcomes (such as retirement at one of various
possible ages). Once the outcome is known (e.g. the participant retires) the liability is adjusted to
reflect the known outcome. This adjustment produces a gain or loss depending on whether the
outcome was more or less favorable than other outcomes that could have occurred.
Contribution risk: This risk results from the potential that actual employer contributions may deviate
from actuarially determined contributions, which are determined in accordance with the Board’s
funding policy. The funding policy is intended to result in contribution requirements that if paid when
due, will result in a reasonable expectation that assets will accumulate to be sufficient to pay plan
benefits when due. Contribution deficits, particularly large deficits and those that occur repeatedly,
increase future contribution requirements and put the plan at risk for not being able to pay plan
benefits when due.
IMPACT OF PLAN MATURITY ON RISK
For newer pension plans, most of the participants and associated liabilities are related to active members who
have not yet reached retirement age. As pension plans continue in operation and active members reach
retirement ages, liabilities begin to shift from being primarily related to active members to being shared
amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred.
It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk
characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as
long of a time horizon to recover from losses (such as losses on investments due to lower than expected
investment returns) as plans where the majority of the liability is attributable to active members. For this
reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial
inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small
positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the
size of the fund is shrinking, which can result in less assets being available for investment in the market.
To assist with determining the maturity of the plan, we have provided some relevant metrics in the table
following titled “Plan Maturity Measures and Other Risk Metrics”. For a better understanding of the overall
Plan and the impact of these risks, please refer to the consolidated PSPRS valuation report.
LOW DEFAULT RISK OBLIGATION MEASURE
ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, was revised
as of December 2021 to include a “low-default-risk obligation measure” (LDROM). This liability measure is
consistent with the determination of the actuarial accrued liability shown on page 8 in terms of member data,
plan provisions, and assumptions/methods, including the use of the Entry Age Normal Cost Method, except
that the interest rate is tied to low-default-risk fixed income securities. The S&P Municipal Bond 20 Year High
Grade Rate Index (daily rate closest to, but not later than, the measurement date) was selected to represent
a current market rate of low risk but longer-term investments that could be included in a low-risk asset
portfolio. The interest rate used in this valuation was 4.81%, resulting in an LDROM of $125,012,506 for Tiers
1 and 2 and $496,952,639 for Tier 3. The LDROM should not be considered the “correct” liability
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
52
measurement; it simply shows a possible outcome if the Board elected to hold a very low risk asset portfolio.
The Board actually invests the pension plan’s contributions in a diversified portfolio of stocks and bonds and
other investments with the objective of maximizing investment returns at a reasonable level of risk.
Consequently, the difference between the plan’s Actuarial Accrued Liability disclosed earlier in this section
and the LDROM can be thought of as representing the expected taxpayer savings from investing in the plan’s
diversified portfolio compared to investing only in high quality bonds.
The actuarial valuation reports the funded status and develops contributions based on the expected return of
the plan’s investment portfolio. If instead, the plan switched to investing exclusively in high quality bonds, the
LDROM illustrates that reported funded status would be lower (which also implies that the Actuarially
Determined Contributions would be higher), perhaps significantly. Unnecessarily high contribution
requirements in the near term may not be affordable and could imperil plan sustainability and benefit security.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
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PLAN MATURITY MEASURES AND OTHER RISK METRICS – TIERS 1 & 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
SUPPORT RATIO
Total Actives 47 54 59 71 75
Total Inactives 87 82 79 67 64
Actives / Inactives 54.0% 65.9% 74.7% 106.0% 117.2%
ASSET VOLATILITY RATIO
Market Value of Assets (MVA) 94,785,694 87,451,926 79,847,757 75,900,900 51,161,889
Total Annual Payroll 4,883,530 5,654,920 6,036,925 6,042,533 6,174,801
MVA / Total Annual Payroll 1,940.9% 1,546.5% 1,322.7% 1,256.1% 828.6%
ACCRUED LIABILITY (AL) RATIO
Inactive Accrued Liability 66,116,339 60,222,648 57,674,718 46,880,574 41,295,836
Total Accrued Liability 90,269,748 87,755,942 85,636,864 76,438,334 70,792,554
Inactive AL / Total AL 73.2% 68.6% 67.3% 61.3% 58.3%
FUNDED RATIO
Actuarial Value of Assets (AVA) 91,172,990 86,551,076 81,319,622 77,967,201 46,773,089
Total Accrued Liability 90,269,748 87,755,942 85,636,864 76,438,334 70,792,554
AVA / Total Accrued Liability 101.0% 98.6% 95.0% 102.0% 66.1%
NET CASH FLOW RATIO
Net Cash Flow 1 (2,152,653) (484,773) (1,793,766) 27,917,489 1,738,938
Market Value of Assets (MVA) 94,785,694 87,451,926 79,847,757 75,900,900 51,161,889
Net Cash Flow / MVA (2.3%) (0.6%) (2.2%) 36.8% 3.4%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
54
PLAN MATURITY MEASURES AND OTHER RISK METRICS - TIER 3 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
2 Tier 3 results are shown for the Risk Sharing group, where applicable.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
SUPPORT RATIO
Total Actives 4,241 3,661 3,052 2,417 2,560
Total Inactives 728 570 450 327 307
Actives / Inactives 582.6% 642.3% 678.2% 739.1% 833.9%
ASSET VOLATILITY RATIO
Market Value of Assets (MVA) 266,158,721 184,210,874 119,338,352 74,774,123 51,992,240
Total Annual Payroll 367,097,197 295,480,312 226,680,964 165,151,543 115,883,115
MVA / Total Annual Payroll 72.5% 62.3% 52.6% 45.3% 44.9%
ACCRUED LIABILITY (AL) RATIO
Inactive Accrued Liability 21,448,721 16,792,236 9,349,377 4,598,114 2,290,610
Total Accrued Liability 247,440,343 165,671,690 110,961,191 68,939,204 42,733,537
Inactive AL / Total AL 8.7% 10.1% 8.4% 6.7% 5.4%
FUNDED RATIO
Actuarial Value of Assets (AVA) 253,309,023 178,758,433 119,101,476 76,171,857 45,863,401
Total Accrued Liability 247,440,343 165,671,690 110,961,191 68,939,204 42,733,537
AVA / Total Accrued Liability 102.4% 107.9% 107.3% 110.5% 107.3%
NET CASH FLOW RATIO
Net Cash Flow 1 55,470,509 47,922,185 36,208,171 25,802,686 18,607,209
Market Value of Assets (MVA) 266,158,721 184,210,874 119,338,352 74,774,123 51,992,240
Net Cash Flow / MVA 20.8% 26.0% 30.3% 34.5% 35.8%
Arizona Corrections Officer
Retirement Plan
Town Of Oro Valley - Dispatchers (556)
Actuarial Valuation
As of June 30, 2025
Contributions Applicable to the Plan/
Fiscal Year Ending June 30, 2027
13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · www.foster-foster.com
November 2025
Board of Trustees
Arizona Corrections Officer Retirement System
Re: Actuarial Valuation as of June 30, 2025 for Town of Oro Valley - Dispatchers (556)
Dear Members of the Board,
This report details the annual actuarial valuation of the Arizona Correction Officer Retirement Plan (CORP) as
of June 30, 2025. The valuation was performed to measure the plan’s liability and funding levels and to
determine the actuarially appropriate funding requirements for the applicable plan year. This report was
prepared for use by the Board and those designated or approved by the Board. Use of the results for other
purposes may not be applicable and could produce significantly different results.
DATA AND ASSUMPTIONS
In preparing this report, we have relied on personnel, plan design, and asset information supplied by the Public
Safety Personnel Retirement System (PSPRS). In our opinion, the assumptions used in the valuation, as
adopted by the Board, represent reasonable expectations of anticipated fund experience. Other sets of
assumptions and methods could also be reasonable and could produce materially different results. While we
cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and
reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the
information and believe that it has produced appropriate results. This information, along with any
adjustments or modifications, is summarized in various sections of this report.
DISCLOSURES AND LIMITATIONS
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to factors such as the following: plan experience differing from that anticipated by the economic
or demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period); and changes in plan provisions or applicable law. Due to the limited scope of this
report, we did not provide an analysis of these potential differences.
The computed contribution rates shown in the “Contribution Results” section should be considered minimum
contribution rates that comply with the Board’s funding policy and Arizona Statutes. Users of this report
should be aware that contributions made at that rate do not guarantee benefit security. Given the importance
of benefit security to any retirement system, we suggest that contributions to the System in excess of those
presented in this report be considered.
The funding percentages and unfunded accrued liability as measured based on the actuarial value of assets
will differ from similar measures based on the market value of assets. These measures, as provided, are
appropriate for determining the adequacy of future contributions, but may not be appropriate for the purpose
of settling a portion or all of its liabilities.
This valuation assumes the continuing ability of the participating employers to make the contributions
necessary to fund this plan. A determination regarding whether or not the participating employers are
actually able to do so is outside our scope of expertise. Consequently, we did not perform such an analysis.
In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and
costs. These results are reviewed in the aggregate and for individual sample lives. The output from the
software is either used directly or input into internally developed models to generate the costs. All internally
developed models are reviewed as part of the process. As a result of this review, we believe that the models
have produced reasonable results. We do not believe there are any material inconsistencies among
assumptions or unreasonable output produced due to the aggregation of assumptions.
ACTUARIAL CERTIFICATION
The valuation has been conducted in accordance with all applicable laws and regulations, as well as generally
accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued
by the Actuarial Standards Board; specifically No. 6 for Measuring Retiree Group Benefit Obligations/No. 4 for
Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, No. 23 for Data Quality,
No. 27 for Selection of Economic Assumptions for Measuring Pension Obligations, No. 35 for Selection of
Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, No. 44, Selection and
Use of Asset Valuation Methods for Pension Valuations, and No. 51, Assessment and Disclosure of Risk
Associated with Measuring Pension Obligations.
In our opinion, the Minimum Required Contribution set forth in this report constitutes a reasonable actuarially
determined contribution under Actuarial Standard of Practice No. 4.
The undersigned are familiar with the immediate and long-term aspects of pension/OPEB valuations and meet
the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions
contained herein. All of the sections of this report are considered an integral part of the actuarial opinions.
To our knowledge, no associate of Foster & Foster, Inc. working on this report has any direct financial interest
or indirect material interest in the Arizona Correction Officer Retirement Plan, nor does anyone at Foster &
Foster, Inc. act as a member of the PSPRS Board of Trustees. Thus, there is no relationship existing that might
affect our capacity to prepare and certify this actuarial report.
Respectfully submitted,
Foster & Foster, Inc.
____________________________ ____________________________
Bradley R. Heinrichs, FSA, EA, MAAA Paul M. Baugher, FSA, EA, MAAA
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
4
TABLE OF CONTENTS
SUMMARY................................................................................................................................ 5
CONTRIBUTION RESULTS .............................................................................................................. 8
Development of Employer Contributions – Tiers 1 & 2 Members ............................................... 8
Development of Contributions – Tier 3 Defined Contribution (DC) Members ............................ 9
Contribution Rate Summary ....................................................................................................... 10
Impact of Additional Contributions ............................................................................................ 11
Historical Summary of Rates ...................................................................................................... 11
LIABILITY SUPPORT ................................................................................................................... 12
Liabilities and Funded Ratios by Benefit - Tiers 1 & 2 ................................................................ 12
Derivation of Experience (Gain)/Loss ......................................................................................... 13
Amortization of Unfunded Liabilities - Tiers 1 & 2 ..................................................................... 14
ASSET SUPPORT ....................................................................................................................... 15
MEMBER STATISTICS ................................................................................................................. 18
Statistical Data – Active Members - Tiers 1 & 2 ......................................................................... 18
Statistical Data – Inactive Members - Tiers 1 & 2 ....................................................................... 19
Active Age, Service and Pay Distributions – Tiers 1 & 2 ............................................................. 20
Age Distributions – Inactive Members ....................................................................................... 21
ACTUARIAL ASSUMPTIONS AND METHODS ..................................................................................... 22
PLAN PROVISIONS .................................................................................................................... 27
ACTUARIAL FUNDING POLICY ...................................................................................................... 33
SUPPLEMENTARY INFORMATION .................................................................................................. 38
Glossary ...................................................................................................................................... 38
Discussion of Risk ....................................................................................................................... 42
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
5
SUMMARY
The regular annual actuarial valuation of the Arizona Corrections Officer Retirement Plan for the Town of Oro
Valley - Dispatchers, performed as of June 30, 2025, has been completed and the results are presented in this
Report. The purpose of this valuation is to:
Compute the employers’ recommended contribution rates for the fiscal year ending June 30, 2027.
This information is contained in the section entitled “Contribution Results”.
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and active
members and compare accumulated assets with the liabilities to assess the funded condition. This
information is contained in the section entitled “Liability Support.”
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
EMPLOYER CONTRIBUTION REQUIREMENTS (AS A PERCENTAGE OF PAYROLL)
Tiers 1 & 2 Members
Pension 6.00% 6.00%
Health 0.00% 0.00%
Total 6.00% 6.00%
FUNDED STATUS
Tiers 1 & 2 Members
Pension 100.2% 102.8%
Health 384.1% 316.0%
Total 101.9% 104.3%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
6
CHANGES FROM PRIOR YEAR
Changes in the results from the prior year’s valuation can be illustrated in the following tables along with high-
level explanations for the entire Plan below:
CONTRIBUTION RATE
Tiers 1 & 2
Pension Health
Contribution Rate Last Valuation 6.00% 0.00%
Asset Experience (2.99%) (0.14%)
Payroll Base 0.00% (0.25%)
Liability Experience 24.71% (0.48%)
Additional Contribution 0.00% 0.00%
Assumption/Method Change 0.00% 0.00%
Other (21.72%) 0.87%
Contribution Rate This Valuation 6.00% 0.00%
FUNDED STATUS
Tiers 1 & 2
Pension Health
Funded Status Last Valuation 102.8% 316.0%
Asset Experience 0.6% 3.5%
Liability Experience (5.0%) 50.4%
Additional Contribution 0.0% 0.0%
Assumption/Method Change 0.0% 0.0%
Other 1.8% 14.2%
Funded Status This Valuation 100.2% 384.1%
Assets Experience – Asset gains and losses (relative to the assumed earnings rate) are smoothed over seven
years for Tiers 1 and 2. The return on the market value of assets for the year ending June 30, 2025 was 11.0%.
On a smoothed, actuarial value of assets basis, the average return was 7.9%. This return exceeded the 2024
assumed earnings rate of 7.2%.
Payroll Base – Under the current amortization policy for Tiers 1 and 2, the contribution rate is developed as a
level percentage of payroll. Payroll for this purpose includes members of this plan and the defined
contribution plan’s members that would have been in this plan. To the extent that actual payroll is
lower/greater than last year’s projected payroll, the contribution rate will increase/decrease as a result.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
7
Liability Experience – Experience overall was favorable, driven by higher than expected investment returns,
lower than expected salary increases for actives, and favorable overall decrement experience.
Additional Contribution – Monies contributed in excess of the required contribution rate in order to pay down
the unfunded liability.
Assumption / Method Change – The Board continued the decrease in the payroll growth assumption from
1.00% to 0.50%.
Other – This is the combination of all other factors that could impact liabilities year-over-year, with the
primary sources being changes in member data.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
8
CONTRIBUTION RESULTS
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIERS 1 & 2 MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Normal Cost
Total Normal Cost 9.47% $8,057 9.19% $17,597
Employee Cost (7.65%) (6,508) (7.65%) (14,644)
Employer (Net) Normal Cost 1.82% 1,549 1.54% 2,953
Amortization of Unfunded Liability 0.98% 834 0.00% 0
Total Employer Cost (Pension) 2.80% 2,383 1.54% 2,953
HEALTH
Normal Cost 0.19% $160 0.20% $389
Amortization of Unfunded Liability (0.19%) (160) (0.20%) (389)
Total Employer Cost (Health) 0.00% 0 0.00% 0
Total Employer Cost (Pension + Health) 2.80% 2,383 1.54% 2,953
Total Minimum Contribution Requirement
(if applicable) 6.00% 6.00%
Alternate Contribution Rate (ACR) 1 6.00% 6.00%
Underlying Payroll (as of valuation date) 85,074 191,430
The results above are shown both prior to and after the application of the statutory minimum contribution
requirement of 6% of payroll.
1 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 6% minimum) and is charged when retirees return to active status.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
9
DEVELOPMENT OF CONTRIBUTIONS – TIER 3 DEFINED CONTRIBUTION (DC) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
TIER 3 DC ONLY
Employee Cost 7.00% $ 0 7.00% $ 0
Employee Health Subsidy Program Cost 0.18% 0 0.20% 0
Employee Disability Program Cost 0.43% 0 0.43% 0
Total Employee Cost 7.61% 0 7.63% 0
Employer Cost 5.00% 0 5.00% 0
Employer Health Subsidy Program Cost 0.18% 0 0.20% 0
Employer Disability Program Cost 0.43% 0 0.43% 0
Total Employer Cost (before Legacy) 5.61% 0 5.63% 0
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 1 0.98% 0
0.00% 0
Total Employer Cost (with Legacy) 6.59% 0 5.63% 0
Underlying Payroll (as of valuation date) 0 0
1 Pursuant to ARS § 38-891(A), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
10
CONTRIBUTION RATE SUMMARY
Tier 1 Tier 2 Tier 3
Membership Date On or After 7/1/1986 1/1/2012 7/1/2018
Available Retirement Plan DB Only DB Only DB Only 1 DC Only
EMPLOYEE CONTRIBUTION RATE
PSPRS DB Rate 7.65% 7.65% N/A PSPRS DC Rate 2 7.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 0.43%
Total EE Contribution Rate 7.65% 7.65% N/A 7.61%
EMPLOYER CONTRIBUTION RATE
PSPRS DB Normal Cost 1.82% 1.82% N/A PSPRS DB Tier 1 & 2 Legacy Cost 3 0.98% 0.98% N/A 0.98%
PSPRS DC Rate 5.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 0.43%
Total ER Contribution Rate 2.80% 2.80% N/A 6.59%
Employer Alternate Contribution Rate 4 6.00% 6.00% 6.00% 6.00%
Exhibit summarizes employee and employer contributions based on Statute and the results of June 30, 2025
actuarial valuation. Pension and health components are combined, where applicable.
1 Applicable to AOC Probation and Surveillance only.
2 Although the default contribution rate is 7%, Tier 3 members in the DC plan may choose an employee contribution rate
anywhere be-tween 5% and 40%.
3 Per statute (ARS § 38-891(A), any positive unfunded liability for Tiers 1 and 2 is to be applied to all Tier 3 (DB and DC)
payrolls.
4 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to a 6% minimum) and is charged when retirees return to active status.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
11
IMPACT OF ADDITIONAL CONTRIBUTIONS
Additional Contribution (000s)
Impact On $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100
Funded Status - June 30, 2025 100.2% 100.4% 100.6% 100.9% 101.1% 101.4% 101.6% 101.8% 102.1% 102.3% 102.5%
FYE 2027 Contribution Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Table shows the hypothetical change in the funded status and contribution rate from the June 30, 2025 actuarial valuation results for Tiers 1 & 2 if
an additional contribution of the amount shown had been made to the Fund on June 30, 2025. This illustration can help estimate the impact of
contributing additional monies to the fund in the future.
HISTORICAL SUMMARY OF RATES
Pension Health
Valuation
Date June 30
Fiscal Year
Ending June 30
Normal
Cost
Unfunded
Amortization Total Normal
Cost
Unfunded
Amortization Total
TIERS 1 & 2 2021 2023 2.83% 115.62% 118.45% 0.24% (0.24%) 0.00%
(Employer) 2022 2024 2.25% 126.19% 128.44% 0.23% (0.23%) 0.00%
2023 2025 1.51% 0.00% 1.51% 0.21% (0.21%) 0.00%
2024 2026 1.54% 0.00% 1.54% 0.20% (0.20%) 0.00%
2025 2027 1.82% 0.98% 2.80% 0.19% (0.19%) 0.00%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
12
LIABILITY SUPPORT
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIERS 1 & 2
Pension and health liabilities were not impacted under the lateral transfer methodology.
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 3,733,130 $ 2,625,259
Vested Members 1,149 28,152
Active Members 489,939 1,434,762
Total Actuarial Present Value of Benefits 4,224,218 4,088,173
Actuarial Accrued Liability (AAL)
All Inactive Members 3,734,279 2,653,411
Active Members 440,328 1,342,545
Total Actuarial Accrued Liability 4,174,607 3,995,956
Actuarial Value of Assets (AVA) 4,181,047 4,106,486
Unfunded Actuarial Accrued Liability (6,440) (110,530)
PVB Funded Ratio (AVA / PVB) 99.0% 100.4%
AAL Funded Ratio (AVA / AAL) 100.2% 102.8%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 16,521 $ 10,733
Active Members 9,569 19,848
Total Present Value of Benefits 26,090 30,581
Actuarial Accrued Liability (AAL)
All Inactive Members 16,521 10,733
Active Members 8,815 18,088
Total Actuarial Accrued Liability 25,336 28,821
Actuarial Value of Assets (AVA) 97,324 91,076
Unfunded Actuarial Accrued Liability (71,988) (62,255)
PVB Funded Ratio (AVA / PVB) 373.0% 297.8%
AAL Funded Ratio (AVA / AAL) 384.1% 316.0%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
13
DERIVATION OF EXPERIENCE (GAIN)/LOSS
Tiers 1 & 2
Pension Health
(1) Unfunded Actuarial Accrued Liability as of June 30, 2024 (110,530) (62,255)
(2) Normal Cost Developed in Last Valuation 2,953 389
(3) Actual Contributions 9,118 0
(4) Expected Interest On (1), (2), and (3) (8,068) (4,454)
(5) Expected Unfunded Actuarial Accrued Liability as of June
30, 2025: (1)+(2)-(3)+(4) (124,763) (66,320)
(6) Changes to UAAL Due to Assumptions, Methods and
Benefits 0 0
(7) Change to UAAL Due to Actuarial (Gain)/Loss 118,323 (5,668)
(8) Unfunded Actuarial Accrued Liability as of June 30, 2025 (6,440) (71,988)
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
14
AMORTIZATION OF UNFUNDED LIABILITIES - TIERS 1 & 2
Date Established Outstanding Balance Years Remaining Amortization Rate
PENSION 6/30/2019 0 11 0.00%
6/30/2021 98,877 11 14.60%
6/30/2022 137,514 12 19.19%
6/30/2023 (257,983) 13 (34.23%)
6/30/2024 (86,485) 14 (10.97%)
6/30/2025 101,637 15 12.39%
Total (6,440) 0.98%
HEALTH 6/30/2019 0 10 0.00%
6/30/2021 0 10 0.00%
6/30/2022 0 10 0.00%
6/30/2023 0 10 0.00%
6/30/2024 0 10 0.00%
6/30/2025 (69,454) 10 (10.94%)
Total (69,454) (10.94%)
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
15
ASSET SUPPORT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR YEAR ENDED JUNE 30, 2025
Tiers 1 & 2
Pension Health
ADDITIONS Contributions
Member Contributions $ 33,885,185 $ 0
Employer Contributions 158,736,763 0
Health Insurance 0 238,176
Total Contributions 192,621,948 238,176
Investment Income Net Increase in Fair Value 391,272,119 13,909,651
Interest and Dividends 73,029,160 2,596,174
Other Income 42,339,729 1,504,460
Less Investment Expenses (9,979,582) (290,972)
Net Investment Income 496,661,426 17,719,313
Non-investment Income
Transfers In 60,728 0
Total Additions 689,344,102 17,957,489
DEDUCTIONS Distributions to Members Benefit Payments 242,275,675 0
Health Insurance Subsidy 0 5,259,944
Refund of Contributions 12,401,433 0
Total Distributions 254,677,108 5,259,944
Administrative Expenses 4,190,027 141,085
Transfers Out 225,843 0
Other 0 0
Total Deductions 259,092,978 5,401,029
NET INCREASE / (DECREASE) 430,251,124 12,556,460
NET POSITION HELD IN TRUST Prior Valuation 4,499,633,348 162,705,984
Beginning of the Year Adjustment (4) (0)
End of the Year 4,929,884,468 175,262,444
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
16
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 24,385,543 24,385,543 24,385,543 24,385,543 24,385,543 24,385,543 24,385,540
2024 Experience 17,668,689 17,668,689 17,668,689 17,668,689 17,668,689 17,668,690
2023 Experience 2,641,788 2,641,788 2,641,788 2,641,788 2,641,789
2022 Experience (55,178,167) (55,178,167) (55,178,167) (55,178,167)
2021 Experience 57,594,125 57,594,125 57,594,122
2020 Experience (13,457,282) (13,457,281)
2019 Experience (5,782,112)
Total Amortization 27,872,584 33,654,697 47,111,975 (10,482,147) 44,696,021 42,054,233 24,385,540
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 7.9%
A. Investment Income
A1. Actual Investment Income $ 492,471,399
A2. Expected Amount for Immediate Recognition 321,772,601
A3. Amount Subject to Amortization 170,698,798
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 4,461,039,238
C2. Non-investment Net Cash Flow (62,220,275)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 4,748,464,148
C4. Market Value of Assets, June 30, 2025 4,929,884,468 4,340,788
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 4,748,464,148 4,181,047
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
17
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 908,800 908,800 908,800 908,800 908,800 908,800 908,798
2024 Experience 672,291 672,291 672,291 672,291 672,291 672,294
2023 Experience 86,024 86,024 86,024 86,024 86,021
2022 Experience (2,435,759) (2,435,759) (2,435,759) (2,435,757)
2021 Experience 3,479,700 3,479,700 3,479,703
2020 Experience (806,920) (806,919)
2019 Experience (382,213)
Total Amortization 1,521,923 1,904,137 2,711,059 (768,642) 1,667,112 1,581,094 908,798
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 8.1%
A. Investment Income
A1. Actual Investment Income $ 17,578,228
A2. Expected Amount for Immediate Recognition 11,216,630
A3. Amount Subject to Amortization 6,361,598
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 159,542,103
C2. Non-investment Net Cash Flow (5,021,768)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 167,258,888
C4. Market Value of Assets, June 30, 2025 175,262,444 101,981
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 167,258,888 97,324
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
18
MEMBER STATISTICS
STATISTICAL DATA – ACTIVE MEMBERS - TIERS 1 & 2
June 30, 2025 June 30, 2024
ACTIVES
Number 1 2
Average Current Age 53.8 53.9
Average Age at Employment 35.9 32.3
Average Past Service 17.9 21.6
Average Annual Salary $82,396 $72,947
ACTIVES (TRANSFERRED)
Number 0 0
Average Current Age N/A N/A
Average Age at Employment N/A N/A
Average Past Service N/A N/A
Average Annual Salary N/A N/A
TOTAL NUMBER (ACTIVE) 1 2
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
19
STATISTICAL DATA – INACTIVE MEMBERS - TIERS 1 & 2
June 30, 2025 June 30, 2024
RETIREES
Number 5 4
Average Current Age 66.8 68.4
Average Annual Benefit $47,234 $41,072
BENEFICIARIES
Number 1 1
Average Current Age 71.0 70.0
Average Annual Benefit $39,312 $38,541
DISABILITY RETIREES
Number 1 1
Average Current Age 54.0 53.0
Average Annual Benefit $5,084 $4,984
INACTIVE / VESTED
Number 1 2
Average Current Age 43.1 43.7
Average Accumulated
Contributions $1,121 $12,051
TOTAL NUMBER (INACTIVE) 8 8
FORMER MEMBERS (TRANSFERRED) 0 0
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
20
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIERS 1 & 2
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<25 0 0 0 0 0 0 0 0 0 0
25 - 29 0 0 0 0 0 0 0 0 0 0
30 - 34 0 0 0 0 0 0 0 0 0 0
35 - 39 0 0 0 0 0 0 0 0 0 0
40 - 44 0 0 0 0 0 0 0 0 0 0
45 - 49 0 0 0 0 0 0 0 0 0 0
50 - 54 0 0 0 1 0 0 0 1 82,396 82,396
55 - 59 0 0 0 0 0 0 0 0 0 0
60 - 64 0 0 0 0 0 0 0 0 0 0
65+ 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 1 0 0 0 1 82,396 82,396
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
21
AGE DISTRIBUTIONS – INACTIVE MEMBERS
Retirees, Disableds and
Beneficiaries
Age Count
Annual
Pensions
<40 0 0
40-45 0 0
45-49 0 0
50-54 1 5,084
55-59 2 58,557
60-64 0 0
65-69 1 54,916
70-74 2 33,290
75-79 1 36,868
80-84 0 0
85-89 0 0
90-94 0 0
95-99 0 0
100+ 0 0
Total 7 40,080
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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ACTUARIAL ASSUMPTIONS AND METHODS
Interest Rate 7.20% per year. This is the assumed earnings rate on System assets,
compounded annually, net of investment and administrative
expenses.
Mortality Rate Active Lives:
PubS-2010 Employee mortality, adjusted by a factor of 1.28 for male
members and 1.11 for female members, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021). 100% of active deaths are assumed to be
in the line of duty.
Inactive Lives:
PubS-2010 Healthy Retiree mortality, adjusted by a factor of 1.33
for male retirees and 1.13 for female retirees, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021).
Beneficiaries:
PubS-2010 Survivor mortality, adjusted by a factor of 0.99 for male
beneficiaries and adjusted by a factor of 1.09 for female
beneficiaries, with generational improvements using 85% of the
most recent projection scale (currently Scale MP-2021).
Disabled Lives:
PubS-2010 Disabled mortality, adjusted by a factor of 1.02 for male
disabled members and 0.98 for female disabled members, with
generational improvements using 85% of the most recent projection
scale (currently Scale MP-2021).
The mortality assumptions sufficiently accommodate anticipated
future mortality improvements.
Retirement / DROP Rates These rates are used to project future decrements from the active
population due to retirement. The rates below are based on a 2022
experience study using actual plan experience.
Tier 1 – reaching 20 (25 for dispatchers) years of service after age
62:
Age-related rates based on age at retirement: 35% per year from
age 62 - 74 and 100% assumed at age 75.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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Tier 1 – reaching 20 (25 for dispatchers) years of service before age
62:
Service-related rates based on service at retirement. See complete
table of rates at the end of this section.
Tier 2:
Age-related rates based on age at retirement:
Age Rate
53 - 54 40%
55 30%
56 - 57 15%
58 - 59 30%
60 - 61 65%
62+ 100%
Disability Rate These rates are used to project future decrements from the active
population due to disability. Complete table of rates based on age
at disability are provided at the end of this section. These rates are
based on a 2022 experience study using actual plan experience.
80% of disablements are assumed to be duty-related.
Termination Rate These rates are used to project future decrements from the active
population due to termination. Complete table of rates based on
service at termination are provided at the end of this section. The
rates apply to members prior to retirement eligibility and are based
on a 2022 experience study using actual plan experience.
Inflation 2.50%.
Cost-of-Living Adjustment 1.85%.
Salary Increases See table at the end of this section. This is an annual increase for
individual member’s salary. These rates are based on a 2022
experience study using actual plan experience.
Marital Status For active members, 75% of males and 50% of females are assumed to be
married. Actual marital status is used, where applicable, for inactive
members.
Arizona Corrections Officer Retirement Plan
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Spouse’s Age Males spouses are assumed to be two years older than females
members and female spouses are assumed to be three years
younger than males members.
Benefit Commencement Deferred members are assumed to commence benefits as follows:
Less than 10 years service (all tiers): immediate refund of
contributions
Tier 1 (10+ years service): life annuity payable at age 62
Tiers 2 & 3 (10+ years service): immediate refund of
contributions
Reverse DROP Election Based on experience provided by PSPRS, 20% of eligible members
are assumed to elect the reverse DROP benefit. Interest is credited
at 2.00% annually.
Health Care Utilization For active members, 60% of retirees are expected to utilize retiree
health care. Actual utilization is used for inactive members.
Funding Method Entry Age Normal Cost Method.
Lateral Transfers When active members transfer between employers, the new
employer’s liability starts from their new date of hire with no past
service liability (i.e., all liability is accrued through normal cost). Per
PSPRS administrative decision, once the new employer’s liability is
fully funded, the liability will reflect all past service liability.
Actuarial Asset Method Each year the assumed investment income is recognized in full while
the difference between actual and assumed investment income are
smoothed over a fixed 7-year period. Actuarial Assets shall not be
less than 80% nor greater than 120% of the Market Value of Assets.
Note that during periods when investment performance exceeds
(falls short) of the assumed rate, the actuarial value of assets will
tend to be less (greater) than the market value of assets.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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Amortization Method See Funding Policy for complete details. In short:
Tiers 1 & 2:
Any positive UAAL (assets less than funding policy targets) is
amortized using a layered approach according to a Level
Dollar method over a closed period of 15 years (phased into
from current period).
Any negative UAAL (assets greater than funding policy
targets) is amortized according to a Level Dollar method
over an open period of 10 years.
Payroll Growth 0.50% per year. This is the annual increase expected on total
employer payroll.
Changes Since the Prior Valuation
The payroll growth assumption was lowered from 1.00% to 0.50%.
There were no method changes since the prior valuation.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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RETIREMENT RATES TERMINATION RATES OTHER RATES
Service Rate Service
Tier 1 and
Tier 2 Tier 3 Age
Disability
Rate
Salary
Scale
20 32% 0 23.0% 15.0% 20 0.020% 6.25%
21 32% 1 20.0% 13.5% 21 0.020% 6.00%
22 20% 2 16.5% 12.0% 22 0.020% 5.50%
23 17% 3 15.5% 11.0% 23 0.020% 5.25%
24 17% 4 14.0% 9.0% 24 0.020% 5.25%
25 17% 5 10.5% 8.0% 25 0.020% 5.25%
26 24% 6 10.0% 7.0% 26 0.020% 5.25%
27 17% 7 9.0% 6.0% 27 0.020% 5.00%
28 17% 8 8.0% 6.0% 28 0.020% 5.00%
29 17% 9 8.0% 6.0% 29 0.020% 5.00%
30 25% 10 8.0% 6.0% 30 0.020% 4.75%
31 25% 11 6.5% 2.5% 31 0.020% 4.75%
32 25% 12 5.0% 2.5% 32 0.020% 4.50%
33 25% 13 4.0% 2.5% 33 0.020% 4.50%
34 30% 14 3.0% 2.5% 34 0.020% 4.25%
35 30% 15 3.0% 2.5% 35 0.035% 4.25%
36 30% 16 2.0% 2.0% 36 0.035% 4.00%
37+ 100% 17 2.0% 1.5% 37 0.035% 4.00%
18 2.0% 1.0% 38 0.035% 3.75%
19 2.0% 0.5% 39 0.035% 3.75%
20+ 2.0% 0.5% 40 0.045% 3.75%
41 0.045% 3.75%
42 0.045% 3.75%
43 0.045% 3.50%
44 0.045% 3.50%
45 0.055% 3.50%
46 0.055% 3.50%
47 0.055% 3.50%
48 0.055% 3.50%
49 0.055% 3.50%
50 0.080% 3.50%
51 0.080% 3.50%
52 0.080% 3.25%
53 0.080% 3.25%
54 0.080% 3.25%
55 0.100% 3.25%
56 0.100% 3.25%
57 0.100% 3.25%
58 0.100% 3.00%
59 0.100% 3.00%
60 0.200% 3.00%
61+ 0.000% 3.00%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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PLAN PROVISIONS
The following is a summary of the benefit provisions provided in Title 38, Chapter 5, Article 6 of the
Arizona Revised Statutes.
Membership Full-time employees of a participating employer in a designated
position, whose customary employment is at least 40 hours each
week. Includes employees hired after July 1, 2018 only if they are a
judiciary probation or surveillance officer who makes the
irrevocable election to participate in the plan.
Benefit Tiers Benefits differ for members based on their hire date:
Tier 1: Hired before January 1, 2012
Tier 2: Hired on or after January 1, 2012 but before July 1, 2018
Tier 3: Hired on or after July 1, 2018
Salary Salary is the amount including base salary, shift and military
differential pay, and holiday pay, paid to an employee on a regular
payroll basis. For Tier 3 members, salary is limited by statutory cap
($70,000 with adjustments by the Board).
Average Monthly Benefit Tier 1: One-thirty-sixth of the highest total salary during a period
Salary of thirty-six consecutive months of service within the last one hundred
twenty months of service.
Tiers 2 & 3: One-sixtieth of the highest total salary during a period of
sixty consecutive months of service within the last one hundred
twenty months of service.
Credited Service Total periods of service, both from service other State plans and those
compensated periods of service for which the member made
contributions to the fund.
Arizona Corrections Officer Retirement Plan
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Normal Retirement
Date Tier 1: First day of the month following attainment of 1) age 62 with
10 years of Credited Service, 2) 20 (25, if dispatcher) years of Credited
Service, or 3) age and Credited Service points equal to 80.
Tier 2: First day of month following the attainment of 1) age 52.5 with
25 years of Credited Service, or 2) age 62 with 10 years of Credited
Service.
Tier 3: First day of month following the attainment of age 55 with 10
years of Credited Service.
Benefit Tier 1: 2.50% times Credited Service (up to 20 years) times Average
Monthly Salary. If Credited Service exceeds 20 years, an additional
2.00% accrual is provided for up to five years. If Credited Service
exceeds 25 years, the additional accrual for service in excess of 20
years is increased to 2.50%. Maximum benefit equals 80% of
Average Monthly Salary.
Tier 2: 2.50% times Credited Service times Average Monthly Salary
(maximum benefit equals 80% of Average Monthly Salary).
Tier 3: Benefit multiplier (below) times Average Monthly Benefit
Salary times Credited Service (maximum benefit of 80% of Average
Monthly Benefit Salary):
Credited Service Benefit Multiplier
10 years, but less than 15 1.25%
15 years, but less than 20 1.50%
20 years, but less than 22 1.75%
22 years, but less than 25 2.00%
25+ years 2.25%
Form of Benefit For married retirees, an annuity payable for the life of the member
with 80% continuing to the eligible spouse upon death. For
unmarried retirees, the normal form is a single life annuity.
Early Retirement Only applicable to Tier 3 members
Date Attainment of age 52.5 and 10 years of Credited Service.
Benefit Actuarial equivalent of Normal Retirement benefit.
Form of Benefit Same as Normal Retirement
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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Disability Benefit –Duty-Related
Eligibility Total and permanent disability incurred in performance of duty.
Benefit Amount The greater of 1) 50% of Average Monthly Salary, and 2) the Normal
Retirement pension that the member is entitled to receive.
Disability Benefit – Ordinary (not duty-related)
Eligibility Total and permanent disability not incurred in performance of duty.
Benefit Amount Dispatchers: Normal Retirement pension that the member is entitled
to receive prorated on Credited Service (maximum 25 years) over 25.
All Others: Normal Retirement pension that the member is entitled to
receive prorated on Credited Service (maximum 20 years) over 20.
Pre-Retirement Death Benefit
Payable to Eligible Survivor Payable to eligible spouse for life; payable to eligible children until
adopted, age 18, or age 23 if full-time student. Note that this benefit
is only payable following death of an active member.
Service Incurred: 100% of Average Monthly Salary.
Non-Service Incurred: 100% of Average Monthly Salary.
Vesting (Termination)
Vesting Service Requirement 10 years.
Non-Vested Benefit Tier 1: Lump sum payment of accumulated contributions, plus
additional amount based on years of Credited Service.
Service Additional % of Contributions
Less than 5 years 0%
5 years 25%
6 years 40%
7 years 55%
8 years 70%
9 years 85%
10+ years 100%
Tiers 2 & 3: Lump sum payment of accumulated contributions, with
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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interest at rate determined by the Board.
Vested Benefit Tier 1: Deferred lump sum based on two times member’s
accumulated contributions, deferred to age 62. Member is not
entitled to survivor benefits, benefit increases, or group health
insurance subsidy.
Tiers 2 & 3: Deferred retirement annuity calculated same as normal
retirement pension. Payable if contributions left in fund until reach
age requirement. Member is entitled to survivor benefits, benefit
increases, and group health insurance subsidy.
Cost-of-Living Adjustment Payable to retired member or survivor of retired member
Tiers 1 & 2: Compound cost-of-living adjustment on base benefit. First
payment is made on July 1, 2018, with annual adjustments effective
every July 1 thereafter.
Cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. Maximum increase of 2%.
Tier 3: Compound cost-of-living adjustment on base benefit beginning
earlier of first calendar year after the 7th anniversary of retirement or
when the retired member reaches 60 years of age.
A cost-of-living adjustment shall be paid on July 1 each year that the
funded ratio for members hired on or after July 1, 2017 is 70% or more.
The cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. The cost-of-living adjustment will not exceed:
2%, if funded ratio for members who are hired on or after July
1, 2017 is 90% or more;
1.5%, if funded ratio for members who are hired on or after
July 1, 2017 is 80-90%;
1%, if funded ratio for members who are hired on or after July
1, 2017 is 70-80%.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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Reverse Deferred Retirement Option Plan (Reverse DROP)
Eligibility Tier 1 and eligible for normal pension with at least 24 years of
Credited Service (25 years for dispatchers). Must not have been
awarded disability pension.
Reverse DROP Date First day of month immediately following completion of required
Credited Service or date not more than 60 consecutive months
before the date the member elects to participate in the Reverse
DROP, whichever is later.
Benefit Amount Calculated based on Credited Service and Average Monthly Salary as
of the Reverse DROP Date.
Reverse DROP Lump Sum Accumulated benefit amounts (with interest) from Reverse DROP
date to the date the member elected to participate in Reverse DROP.
Interest is equal to the yield on five-year Treasury note as of the first
day of the month, as published by the Federal Reserve Board.
Post-Retirement Health Insurance Subsidy
Eligibility Retired member or survivor who elect health coverage provided by
the state or participating employer.
Maximum Subsidy Amounts Member Only With Dependents
(monthly) Medicare Eligible $100 $170
One w/ Medicare N/A $215
Not Medicare Eligible $150 $260
Contributions
Employee Tiers 1 & 2:
Non-Dispatchers: 8.41% of salary, or 50/50 split of total
employer and employee costs, whichever is lower, until the
plan is 100% funded. Minimum contribution of 7.65% of
salary.
Dispatchers: 0.45% less than non-dispatcher rate until plan is
100% funded; equal thereafter.
Tier 3: 66.7% of the Normal Cost plus 50% of a level-dollar
amortization of unfunded actuarial accrued liability over a closed
period not to exceed 10 years.
Employer Tiers 1 & 2: Normal Cost, plus amortization of unfunded actuarial
accrued liability over a closed period not to exceed 20 years.
Contribution will never be less than 6% of payroll.
Tier 3: 33.3% of the Normal Cost plus 50% of a level-dollar
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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amortization of unfunded actuarial accrued liability over a closed
period not to exceed 10 years.
Changes Since the Prior Valuation
None.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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ACTUARIAL FUNDING POLICY
A pension plan funding policy describes how pension funding will improve for underfunded plans or maintain
funded benefits for funded plans over time for those benefits defined in Arizona Revised Statutes (ARS). Those
benefits defined in ARS are to be equitably managed and administered by the Arizona Public Safety Personnel
Retirement System (PSPRS agency).
This Actuarial Funding Policy identifies the funding objectives and elements of the actuarial funding policy set
by the Board for the PSPRS agency. The Board adopted this Funding Policy to help ensure the systematic
funding of future benefit payments for members of the retirement systems as established by the legislature.
This policy covers all retirements systems administered by the Board: The Public Safety Personnel Retirement
System (PSPRS); the Correction Officers Retirement Plan (CORP); and the Elected Officials Retirement Plan
(EORP).
To achieve the systematic funding of future benefits, metrics are identified to measure the progress, or the
lack of progress, over time to identify trends. These trends inform the continuation of the current policies or
identify areas of needed research for consideration.
This funding policy is reviewed annually and adopted by the Board in accordance with ARS 38-863.02. This
policy was reviewed and adopted by the Board in September 2025.
PSPRS STATEMENT OF PURPOSE
The Purpose of the Public Safety Personnel Retirement System is to provide uniform, consistent, and equitable
statewide retirement programs for those who have been entrusted to our care.
FUNDING OBJECTIVES
1. Maintain adequate assets so that current plan assets, plus future contributions and investment earnings,
are sufficient to fund all benefits expected to be paid to members and their beneficiaries.
a. Corollary 1a: Current and future contributions should be calculated based upon assumptions that
reflect the Board’s best estimate of future experience and methods that appropriately allocate
costs to address generational equity.
b. Corollary 1b: While the shorter-term objective is to fully fund the Actuarial Accrued Liability (AAL)
that estimates benefits earned as of the valuation date, contributions should target the long-term
Present Value of Benefits (PVB) to fund all benefits and help offset risks.
c. As closed plans mature, the target funding should be 110% of AAL or 100% of PVB, whichever is
greater.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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2. Maintain public policy goals of accountability and transparency through stakeholder communication and
education. Each policy element is clear in intent and effect, and each should be considered in a balanced
approach to determine how and when the funding requirements of the plan will be met.
a. Corollary 2a: Board shall provide stakeholders with separate reports and tools to help explain
current results as well as to help model future funding requirements.
3. Promote intergenerational equity. Defined benefit pensions are designed with a long-term perspective
and designed to minimize contribution volatility that cannot avoid some level of generational cost shift.
However, the goal is that each generation of members and employers (taxpayers) should, to the extent
possible, incur the cost of benefits for the employees who provide services to them, rather than shifting
those costs to other generations of members and employers (taxpayers).
a. Corollary 3a: A systematic reduction of the Unfunded Actuarial Accrued Liability (UAAL) over a
reasonable time period is paramount to achieving this objective.
Consideration can be given to reduce volatility, to the extent possible, of employer and employee contribution
rates as long as the integrity of the objectives listed above is not compromised.
ELEMENTS OF ACTUARIAL FUNDING POLICY
1. Actuarial Cost Method
a. The Entry Age Normal level percent of pay actuarial cost method of valuation shall be used in
determining the AAL and Normal Cost. Differences in the past between assumed experience and
actual experience (“actuarial gains and losses”) shall become part of the AAL. The Normal Cost
shall be determined on an individual basis for each active member.
2. Asset Smoothing Method
a. The investment gains or losses of each valuation period, resulting from the difference between
the actual investment return and assumed investment return, shall be recognized annually in level
amounts over five years (Tier 3) or seven years (Tiers 1 and 2) in calculating the Actuarial Value of
Assets (AVA).
b. The AVA so determined shall be subject to a 20% corridor relative to the Market Value of Assets
(MVA).
3. Amortization Method (Unfunded Amounts)
a. The AVA is subtracted from the computed AAL. Any unfunded amount is amortized as a level
percent of payroll over a closed period.
b. The unfunded liabilities, for EORP and Tiers 1 & 2 for both PSPRS and CORP, determined in the
6/30/2019 actuarial valuation will become the initial layer for each employer beginning with the
6/30/2020 actuarial valuation and amortized using the current closed year period for that
employer and continue to decrease each year.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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i. The payroll growth rate assumption used to amortize the PSPRS Unfunded Liability will be
decreased by 0.75% each year with the intention of ultimately achieving 0.0%.
ii. The payroll growth rate used to amortize the Correction Officers Retirement Plan (CORP)
Unfunded Liability will be reduced by 0.5% until 0.0% is reached.
iii. The payroll growth rate used to amortize the Elected Officials Retirement Plan (EORP)
Unfunded Liability will be 0.0%.
c. Gains and losses, for EORP and Tiers 1 & 2 for both PSPRS and CORP, for each employer beginning
with the 6/30/2020 actuarial valuation will be amortized as a new layer over the same
amortization period as the regular unfunded liability to a minimum of 15 years. Once the
amortization period for each employer decreases to 15 years, each subsequent year’s gains and
losses will be amortized as a new 15-year closed layer.
i. The payroll growth rate used to amortize the unfunded liability for all Plans under this
paragraph will be 0.0% (i.e. level-dollar amortization).
d. Tier 3 amortization methods are established in ARS 38-843.G and ARS 38-891.K.
4. Amortization Method (Overfunded Amounts)
a. The AVA is subtracted from the target funding level (greater of 110% of AAL or 100% of PVB). Any
overfunded amount is amortized as a level dollar amount over an open 10-year period.
5. Tier 3 Rate Calculation
a. Tier 3 is distinct from Tiers 1 & 2 in PSPRS and CORP as the contributions are a shared percentage
(50/50 split for PSPRS: for CORP, employer 1/3 and member 2/3 of the normal cost plus 50 percent
each, member and employer, of the UAAL amortization) for employers and members based on
the actuarially calculated rate. To reduce the impact of volatility to rates, the Tier 3 rates will be
smoothed over a 3-year rolling period based on the actuarially calculated rates for each year’s
actuarial valuation.
i. Beginning with the 6/30/2023 valuation, the prospective Tier 3 rates set by the Board of
Trustees are planned to be a rolling average of the actuarial calculated Tier 3 rates using
the 6/30/2023, 6/30/2022 and 6/30/2021 rates in the initial process.
ii. As assumptions may be updated year-to-year, the prior calculated rates are not updated
for those changes, the prior calculated rates are used to smooth in the new rates.
b. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board
committed to continue to monitor market conditions and directions with the intent to ultimately
adopt a single assumed rate of return for all investments for retirement systems/plans
administered by PSPRS agency.
6. Assumed Rate of Return (ARR)
a. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board will
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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continue to monitor market conditions and directions with the intent to ultimately adopt a single
assumed rate of return for all investments for retirement systems/plans administered by PSPRS
agency.
7. EORP Floor Considerations
a. Establish a “floor” for EORP based on the immediately previous valuation by adjusting payroll
growth, amortization periods of the original layer or other possible options, to improve funding
in maintaining contribution levels opposed to reducing employer contributions.
METRICS TO MONITOR FUNDING OBJECTIVES
1. Appropriateness of Assumptions – Gain/Loss Experience (Corollary 1a)
a. Metric: Do the cumulative gain/loss layers over the prior five years exceed 8% of plan assets?
b. Measurement: History of annual gain/loss (split by asset and liability experience) and five-year
cumulative results will be tracked.
c. Action Plan: This metric assumes that a full experience study is performed at least every five years so
objective of measurement is to monitor interim experience. If the metric answer is yes, a review of
the sources or causes of gains and losses should be analyzed and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation are
intended to provide a basis for consideration if assumption changes are warranted between full
experience studies.
2. Funding Targets (Corollary 1b)
a. Metric: Has the funded status, on both an AAL and PVB basis when compared to the MVA, increased
over a five-year period?
b. Measurement: History of funded status measures will be tracked.
c. Action Plan: If the answer is no and not readily explainable (e.g., significant assumption change), a
review of the reason(s) for the decrease should be researched and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation
are intended to provide a basis for consideration if changes to assumptions and/or methods are
warranted between full experience studies.
3. Communication with Stakeholders (Corollary 2a)
a. Metric: Have reports and budgeting tools been provided to stakeholders in a timely fashion?
b. Measurement: Yes/No answer based on input from PSPRS administrator. (An annual standard survey
of stakeholders – 3 to 5 questions.)
c. Action Plan: If the answer is no, and periodically regardless (e.g., every three years), PSPRS staff will
revisit this metric to report to the Advisory Committee to provide a recommendation to the Board of
Trustees if current reports / tools are sufficient and if the delivery timing is appropriate.
4. Timely Recognition of Costs (Corollary 3a)
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a. Metric: Has the percentage of unfunded liability subject to negative amortization decreased over a
five-year lookback period?
b. Measurement: History of unfunded liability subject to negative amortization as a percentage of total
unfunded liability will be tracked.
c. Action Plan: If the answer is no, and not readily explainable (e.g., adopted assumption changes being
phased in are anticipated to address negative amortization), a review of the reason(s) for negative
amortization should be researched and presented to the Advisory Committee to provide a
recommendation to the Board of Trustees. The analysis and presentation are intended to provide a
basis for consideration if changes to assumptions and/or methods are warranted between full
experience studies.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
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SUPPLEMENTARY INFORMATION
GLOSSARY
Accrued Benefit The benefit earned as of a specific date based on the provisions of
the plan and the member’s age, service, and salary as of that date.
Actuarial Accrued Liability The portion of the anticipated future benefits allocated to years
prior to the valuation date determined according to the plan’s
Actuarial Cost Method.
Actuarial Value of Assets The asset value used in the valuation to determine contribution
requirements. It represents the plan’s Market Value of Assets (see
below), with adjustments according to the plan’s Actuarial Asset
Method. These adjustments produce a “smoothed” value that is
likely to be less volatile from year to year than the Market Value of
Assets.
Actuarial Assumptions Assumptions regarding the occurrence of future events affecting
plan costs. These assumptions include rates of investment earnings,
changes in compensation, rates of mortality, withdrawal,
disablement, and retirement as well as statistics related to marriage
and family composition.
Actuarial Cost Method A method of determining the portion of the cost of a plan to be
allocated to each year; sometimes referred to as the "actuarial
funding method." Each cost method allocates a certain portion of
the actuarial present value of benefits between the Actuarial
Accrued Liability and future normal costs to ensure the plan is
adequately and systematically funded.
Actuarial Gain or Loss The change in Unfunded Actuarial Accrued Liability resulting from
experience different from Actuarial Assumptions. Gains decrease
the Unfunded Actuarial Accrued Liability and losses increase the
Unfunded Actuarial Accrued Liability.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
39
Actuarial Present Value The estimated amount of funds required as of a specified date to
provide a payment or series of payments in the future. It is
determined by discounting future payments at predetermined rates
of interest, and by probabilities of payments between the specified
date and the expected date of payment.
Amortization Payment The portion of the plan contribution designated to pay interest and
reduce the outstanding principal balance of Unfunded Actuarial
Accrued Liability. If the amortization payment is less than the
accrued interest on the Unfunded Actuarial Accrued Liability the
outstanding principal balance will increase.
Decrements Events which result in the termination of membership in the system
such as retirement, disability, withdrawal, or death.
Entry Age Normal Cost Method Under this method, the normal cost is the sum of the individual
normal costs for all active participants. For an active participant,
the normal cost is the participant’s normal cost accrual rate,
multiplied by the participant’s current compensation.
The normal cost accrual rate equals:
(i) the present value of future benefits for the participant,
determined as of the participant’s entry
age, divided by
(ii) the present value of the compensation expected to be paid to
the participant for each year of the participant’s anticipated future
service, determined as of the participant’s entry age.
In calculating the present value of future compensation, the salary
scale is applied both retrospectively and prospectively to estimate
compensation in years prior to and subsequent to the valuation
year based on the compensation used for the valuation.
The accrued liability is the sum of the individual accrued liabilities
for all participants and beneficiaries. A participant’s accrued liability
equals the present value, at the participant’s attained age, of future
benefits less the present value at the participant’s attained age of
the individual normal costs payable in the future. A beneficiary’s
accrued liability equals the present value, at the beneficiary’s
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
40
attained age, of future benefits. The unfunded accrued liability
equals the total accrued liability less the actuarial value of assets.
Under this method, the entry age used for each active participant is
the participant’s age at the time he or she would have commenced
participation if the plan had always been in existence under current
terms, or the age as of which he or she first earns service credits for
purposes of benefit accrual under the current terms of the plan.
Funded Ratio A measure of the ratio of the plan assets to liabilities of the system.
Typically, the assets used in the measure are the Actuarial Value of
Assets as determined by the asset valuation method. The Funded
Ratio depends not only on the financial strength of the plan but also
on the asset valuation method used to determine the assets and on
the Actuarial Cost Method used to determine the liabilities.
Interest Rate The assumed long-term rate of return on plan assets.
Market Value of Assets The fair market value of plan assets as of the valuation date.
Normal Cost The current year's cost for benefits yet to be funded. Under the
Entry Age Normal cost method, it is determined for each participant
as the present value of future benefits, determined as of the
Member’s entry age, amortized as a level percentage of
compensation over the anticipated number of years of
participation, determined as of the entry age.
Present Value of Benefits The single sum value on the valuation date of all future benefits to
be paid to current plan participants.
Projected Annual Payroll The projected annual rate of pay for the fiscal year following the
fiscal year beginning on the valuation date of all covered Members.
Projected Benefits The benefits expected to be paid in the future based on the
provisions of the plan and the Actuarial Assumptions. The projected
values are based on anticipated future advancement in age and
accrual of service as well as increases in salary paid to the
participant.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
41
Total Annual Payroll The projected annual rate of pay for the fiscal year beginning on the
valuation date of all covered Members.
Ultimate Cost The total cost to the plan once the last benefit has been paid. The
Ultimate Cost equals
Benefit Payments
Plus: Expenses
Less: Investment Income
The Ultimate Cost is independent of the Actuarial Cost Method
selected.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and the
Liability Actuarial Value of Assets. Under the Entry Age Normal Actuarial
Cost Method, an actuarial gain or loss, based on actual versus
expected UAAL, is determined in conjunction with each valuation
of the plan.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
42
DISCUSSION OF RISK
ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and
Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary’s
professional judgment, may reasonably be anticipated to significantly affect the plan’s future financial
condition.
Throughout this report, actuarial results are determined using various actuarial assumptions. These results
are based on the premise that all future plan experience will align with the plan’s actuarial assumptions;
however, there is no guarantee that actual plan experience will align with the plan’s assumptions. It is possible
that actual plan experience will differ from anticipated experience in an unfavorable manner that will
negatively impact the plan’s funded position.
Below are examples of ways in which plan experience can deviate from assumptions and the potential impact
of that deviation. Typically, this results in an actuarial gain or loss representing the current-year financial
impact on the plan’s unfunded liability of the experience differing from assumptions; this gain or loss is
amortized over a period of time determined by the plan’s amortization method. When assumptions are
selected that adequately reflect plan experience, gains and losses typically offset one another in the long term,
resulting in a relatively low impact on the plan’s contribution requirements associated with plan experience.
When assumptions are too optimistic, losses can accumulate over time and the plan’s amortization payment
could potentially grow to an unmanageable level.
Investment Return: When the rate of return on the Actuarial Value of Assets falls short of the
assumption, this produces a loss representing assumed investment earnings that were not realized.
Further, it is unlikely that the plan will experience a scenario that matches the assumed return in each
year as capital markets can be volatile from year to year. Therefore, contribution amounts can vary in
the future.
Salary Increases: When a plan participant experiences a salary increase that was greater than
assumed, this produces a loss representing the cost of an increase in anticipated plan benefits for the
participant as compared to the previous year. The total gain or loss associated with salary increases
for the plan is the sum of salary gains and losses for all active participants.
Payroll Growth: The plan’s payroll growth assumption, if one is used, causes a predictable annual
increase in the plan’s amortization payment in order to produce an amortization payment that
remains constant as a percentage of payroll if all assumptions are realized. If payroll increases less
than the plan’s payroll growth assumption, the plan’s amortization payment can increase significantly
as a percentage of payroll even if all assumptions other than the payroll growth assumption are
realized.
Demographic Assumptions: Actuarial results take into account various potential events that could
happen to a plan participant, such as retirement, termination, disability, and death. Each of these
potential events is assigned a liability based on the likelihood of the event and the financial
consequence of the event for the plan. Accordingly, actuarial liabilities reflect a blend of financial
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
43
consequences associated with various possible outcomes (such as retirement at one of various
possible ages). Once the outcome is known (e.g. the participant retires) the liability is adjusted to
reflect the known outcome. This adjustment produces a gain or loss depending on whether the
outcome was more or less favorable than other outcomes that could have occurred.
Contribution risk: This risk results from the potential that actual employer contributions may deviate
from actuarially determined contributions, which are determined in accordance with the Board’s
funding policy. The funding policy is intended to result in contribution requirements that if paid when
due, will result in a reasonable expectation that assets will accumulate to be sufficient to pay plan
benefits when due. Contribution deficits, particularly large deficits and those that occur repeatedly,
increase future contribution requirements and put the plan at risk for not being able to pay plan
benefits when due.
IMPACT OF PLAN MATURITY ON RISK
For newer pension plans, most of the participants and associated liabilities are related to active members who
have not yet reached retirement age. As pension plans continue in operation and active members reach
retirement ages, liabilities begin to shift from being primarily related to active members to being shared
amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred.
It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk
characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as
long of a time horizon to recover from losses (such as losses on investments due to lower than expected
investment returns) as plans where the majority of the liability is attributable to active members. For this
reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial
inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small
positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the
size of the fund is shrinking, which can result in less assets being available for investment in the market.
To assist with determining the maturity of the plan, we have provided some relevant metrics in the table
following titled “Plan Maturity Measures and Other Risk Metrics”. For a better understanding of the overall
Plan and the impact of these risks, please refer to the consolidated PSPRS valuation report.
LOW DEFAULT RISK OBLIGATION MEASURE
ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, was revised
as of December 2021 to include a “low-default-risk obligation measure” (LDROM). This liability measure is
consistent with the determination of the actuarial accrued liability shown on page 8 in terms of member data,
plan provisions, and assumptions/methods, including the use of the Entry Age Normal Cost Method, except
that the interest rate is tied to low-default-risk fixed income securities. The S&P Municipal Bond 20 Year High
Grade Rate Index (daily rate closest to, but not later than, the measurement date) was selected to represent
a current market rate of low risk but longer-term investments that could be included in a low-risk asset
portfolio. The interest rate used in this valuation was 4.81%, resulting in an LDROM of $5,593,520 for Tiers 1
and 2. The LDROM should not be considered the “correct” liability measurement; it simply shows a possible
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
44
outcome if the Board elected to hold a very low risk asset portfolio. The Board actually invests the pension
plan’s contributions in a diversified portfolio of stocks and bonds and other investments with the objective of
maximizing investment returns at a reasonable level of risk. Consequently, the difference between the plan’s
Actuarial Accrued Liability disclosed earlier in this section and the LDROM can be thought of as representing
the expected taxpayer savings from investing in the plan’s diversified portfolio compared to investing only in
high quality bonds.
The actuarial valuation reports the funded status and develops contributions based on the expected return of
the plan’s investment portfolio. If instead, the plan switched to investing exclusively in high quality bonds, the
LDROM illustrates that reported funded status would be lower (which also implies that the Actuarially
Determined Contributions would be higher), perhaps significantly. Unnecessarily high contribution
requirements in the near term may not be affordable and could imperil plan sustainability and benefit security.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
45
PLAN MATURITY MEASURES AND OTHER RISK METRICS – TIERS 1 & 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
Support Ratio
Total Actives 1 2 2 2 2
Total Inactives 8 8 9 9 10
Actives / Inactives 12.5% 25.0% 22.2% 22.2% 20.0%
Asset Volatility Ratio
Market Value of Assets (MVA) 4,340,788 4,142,013 3,851,063 1,662,090 1,789,608
Total Annual Payroll 82,396 145,894 145,894 139,892 132,031
MVA / Total Annual Payroll 5,268.2% 2,839.1% 2,639.6% 1,188.1% 1,355.4%
Accrued Liability (AL) Ratio
Inactive Accrued Liability 3,734,279 2,653,411 2,694,780 2,630,985 2,569,215
Total Accrued Liability 4,174,607 3,995,956 3,910,076 3,721,151 3,551,295
Inactive AL / Total AL 89.5% 66.4% 68.9% 70.7% 72.3%
Funded Ratio
Actuarial Value of Assets (AVA) 4,181,047 4,106,486 3,929,592 1,710,819 1,649,829
Total Accrued Liability 4,174,607 3,995,956 3,910,076 3,721,151 3,551,295
AVA / Total Accrued Liability 100.2% 102.8% 100.5% 46.0% 46.5%
Net Cash Flow Ratio
Net Cash Flow 1 (245,403) (96,744) 2,032,267 (60,256) (10,257)
Market Value of Assets (MVA) 4,340,788 4,142,013 3,851,063 1,662,090 1,789,608
Net Cash Flow / MVA (5.7%) (2.3%) 52.8% (3.6%) (0.6%)
Budget and Finance Commission 3.
Meeting Date:02/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
INTRODUCTION AND POSSIBLE DISCUSSION OF DRAFT RECESSION PLAN
RECOMMENDATION:
N/A
EXECUTIVE SUMMARY:
A draft recession plan will be presented for discussion.
BACKGROUND OR DETAILED INFORMATION:
Until recently, the Town of Oro Valley, along with other municipalities throughout the State of Arizona, enjoyed a
period of economic expansion post-Covid. With that said, it has become apparent that the Town should be
prepared for an economic downturn and have a plan in place should a downturn occur.
Due to a variety of factors, economies go through cycles. These cycles sometimes include expansion, and other
times include contraction. The economy is never static. Depending on the duration and depth of the contraction,
it may be labeled either a recession, or rarely, a depression. Contractions in the economy can have a direct,
immediate, and measurable impact on significant Town operating revenues such as Town transaction privilege
taxes (TPT). Having a written plan in place can assist the Town in successfully and strategically addressing a
shortfall in Town General Fund revenues due to economic issues.
A draft "recession plan" has been attached for discussion. The plan includes various "triggers" that are predicated
upon projected shortfalls in total general fund revenues at year-end. Those "triggers" range from up to 2%, to
greater than 15%. Each "trigger" category ranging from "minor" to "crisis", builds on the actions taken in the prior
categories. As the severity of the economic downturn increases (or is expected to increase in severity) the plan's
tiered approach will guide the Town's actions accordingly. The overall intent or goal with the draft plan is to
preserve, and if necessary, restore fund balances back to targeted levels as delineated in Town financial policies.
Staff is proposing the following action plan based upon multiple stages of an economic downturn. The five stages
set forth below equate to anticipated reductions in available revenues (the higher stages representing more
severe reductions) and the resulting measures to be taken in each stage.
Five Stages:
Stage 1 - Minor: A projected, unbudgeted, reduction in revenues up to 2% (less than $1,224,081)
Action: Under this scenario, expenditures will be reduced where reasonably possible. Most services can be
maintained without reduction or public impact, but some services may be scaled down. Recruitment for vacant
positions may be prolonged for short periods. Efficiencies to reduce expenditures will be pursued with emphasis.
Departments and divisions are responsible for monitoring budgets and reducing expenditures.
Stage 2 - Moderate: A projected, unbudgeted, reduction in revenues in excess of 2% but less than 5%
($1,224,081-$3,060,201)
Action: The Town will maintain essential services, but non-essential services may be curtailed and a review of
expenditures is intensified to include the deferment of large purchases; cancellation of contracts and consulting
services; strong review and justification of capital expenditures that are not mandatory or urgent; postponement of
expenditures related to travel, meetings, and discretionary training; and delaying the recruitment for vacant
positions when reasonable to include a partial hiring freeze, or relying upon other strategies to fill current or
projected vacancies.
Stage 3 - Significant: A projected, unbudgeted, reduction in revenues in excess of 5% but less than 10%
($3,060,202-$6,120,402)
Action: Strong justification required for all large purchases; elimination of expenditures related to travel, meetings,
and discretionary training; deferring a significant number of capital projects; implementation of a hiring freeze on
all but essential health, safety, and welfare positions; and the suspension or reduction of services and programs
or decrease level of service in programs that are not deemed essential to the community. A possible reduction of
workforce with initial emphasis upon temporary, part-time, and contract employees. A possible draw-down of
reserves may be considered. The Town will consider reduction of hours and/or temporary closures of facilities
and/or increases in fees to maintain services. Possible deferral or postponement of salary increases (rezones,
merits, COLAs, etc.).
Stage 4 - Major: A projected, unbudgeted, reduction in revenues in excess of 10% but less than 15%
($6,120,403-$9,180,604)
Action: This phase requires actions aimed at major service cuts; continuation of a total hiring freeze; a reduction of
workforce with emphasis upon temporary, part-time, and contract employees; suspend all types of salary
increases; and may consider additional employee cost reduction policies; further reduction in capital
expenditures; and development of a further reduction in workforce strategy. A draw-down of reserves would be
required to maintain essential or mandatory services. Longer-term closures of non-essential Town facilities will
occur. TPT increases will also be considered.
Stage 5 - Crisis: A projected, unbudgeted, reduction in revenues in excess of 15% (greater than $9,180,604)
Action: At this point, the Town implements its reduction in workforce and employee cost reduction policies;
eliminates programs and services; and stops all capital improvement projects and purchasing. Further reductions
in reserves will be required, and any and all revenue-increasing (fees, taxes, etc.) options will be considered.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
N/A - this item is for discussion purposes only.
Attachments
Draft Recession Plan Graphic
Trigger: Up to 22%
Minor Moderate Significant Major Crisis
•Expenditures reduced
where reasonably
possible
•Postpone filling
vacant positions
•Reduce capital
•Limit non-essential
services (ie.
community events)
•Delay large
purchases and
cancel service
contracts
•Discretionary training
and travel reductions
and restrictions
•Institute a partial
hiring freeze
•Operating fee
increases
•Strong justification
for large purchases
•Pause capital
•Institute a broad hiring
freeze; postpone salary
increases, reduce
other employee
benefits
•Partial workforce
reduction (part-time,
contract temporary)
•Additional operating
fee increases
•Major service cuts
•Institute separation
incentive plan and/or
suspend all salary
increases, reduce
other employee
benefits
•Eliminate capital
projects and
expenditures
•TPT increase
•Eliminate programs
and services
•Institute layoffs,
broad workforce
reduction
•Cease all capital
projects and
purchasing
•Explore options to
restructure debt
obligations (default is
not an option)
•Consider any and all
fee and tax increases
•Once triggered
remain in stage until
General Fund
balance restored to
25%
Trigger: Up to 2%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 2% - 4.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 5% - 9.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 10% - 14.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 15+%
Projected Year End Shortfall in Total
General Fund Revenue
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
Budget and Finance Commission 4.
Meeting Date:02/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
PRESENTATION AND DISCUSSION OF GOLF FUND FISCAL ANALYSIS
RECOMMENDATION:
N/A - this item is for discussion purposes only.
EXECUTIVE SUMMARY:
Page 5 of the strategic plan under Focus Area 2 - Culture and Recreation, includes a project titled "Golf Enterprise
Fund Feasibility Analysis". This item is intended to provide information and elicit comment and feedback with
respect to this project.
BACKGROUND OR DETAILED INFORMATION:
History
In FY2015, the Town of Oro Valley (Town) acquired two 18-hole golf courses and one 9-hole golf course. Initially,
these courses performed poorly from a financial standpoint, necessitating the need for implementation of a
half-cent sales tax to augment operations and provide financial stability. Along with the course acquisitions, a
Community Center facility was included as part of the acquisition, providing additional fitness amenities and an
on-site restaurant to the community. Because of the bundled nature of the transaction and how services were
funded, the Town established a Community Center Fund to track financial activity related to both the golf courses
(contractor-operated) and new community center (Town-operated), keeping these activities separate from the
Town General Fund and fostering financial transparency.
In an effort to reverse the poor financial performance of the courses, the Town switched golf contractors from
Troon to Indigo in FY2021, implementing a performance-based contract. The changing of golf contractors had an
immediate and significant improvement in the financial operations of the courses. As an example, operating
losses exceeded $1.63 million in FY2020, but were only $385,000 in FY2021. That year, incidentally, was the
last year that golf has sustained an operational loss. Since FY2022, golf operations have continued to produce
steady growth in net operating income, peaking last year (FY2025) at almost $780,000. Additionally, agreements
between the Town and Homeowner Associations (HOA) have also helped to keep the courses functioning at high
levels and contributions related to those agreements are not included in the operating income numbers cited
above. Except for the 9-hole course, those HOA agreements lapsed this current fiscal year (FY2026) as they
were not renewed.
There have been a number of capital improvements made to the courses since Town acquisition, but the most
significant of these improvements occurred in fiscal years 2021-2024, when the Town performed a complete
irrigation replacement at the two 18-hole courses. The total cost of the replacement was $8.42 million and was
funded through general government resources, including partially through Town-issued debt backed by Town
excise taxes. Neither golf revenues nor available fund balances were sufficient to complete a project of this
magnitude.
In August 2025, the Town Council directed that future half-cent sales tax collections be unrestricted and placed in
the Town General Fund. This action impacts the Community Center Fund funding structure moving forward, as
losses sustained by Town operations as well as capital needs, both for the golf operation and Community Center,
were to be funded through this source. Moving forward, any operational losses sustained in the Community
Center Fund and future capital needs will require transfers from the General Fund. Further, should golf remain in
the Community Center Fund, operational surpluses would, without appropriate barriers, remain part of the broader
fund balance and could be used to support other Community Center programs and activities.
Options
Moving forward, there are three primary options for consideration of how to report golf operations:
1) make no changes
2) split out golf as its own separate enterprise fund
3) split out golf as its own separate special revenue fund
Each of these options will be discussed in more detail with respect to factors that should be considered before a
recommendation or decision is made.
Make No Changes (Status quo)
Pros:
- Keeps consistency with past reporting.
- Highlights performance and results of the Town-operated operations of the Community Center in addition to golf.
- Requires no additional effort from staff.
Cons:
- Can cause confusion among residents with respect to golf specifically, as financial results from golf are
combined with other Community Center operations.
- Without appropriate barriers in the Community Center Fund, golf operational net income could be blended to
offset Town Community Center net losses, meaning the Golf Function would be subsidizing Town Community
Center functions and programs.
Split Out Golf as its own Separate Enterprise Fund
Pros:
- Facilitates greater transparency of golf activity compared to status quo.
- Shows the most comprehensive financial picture of golf activity.
Cons:
- Requires golf activity to be completely self-supporting, including capital needs from a long-term perspective,
which may not be feasible.
- Future subsidy, if necessary, may cause political opposition or community concern.
- Requires golf to be reported under the full accrual method of accounting, which varies from how almost all other
funds in the Town are reported. This may cause confusion and would necessitate initial conversion adjustments.
- Would treat the golf activity differently from all other parks & recreation activities within the Town.
- Diminishes consistency and comparability with golf financial activities presented in prior years.
Split Out Golf as its own Separate Special Revenue Fund
Pros:
- Facilitates greater transparency of golf activity compared to status quo.
- Maintains the same basis of accounting (modified accrual) as current reporting, reducing possible confusion and
making conversion adjustments unnecessary compared to the Enterprise Fund option.
- Ensures that golf operational surpluses are not used to offset Town operational losses sustained through Town
Community Center functions and programs.
Cons:
- Presents financial information with a more near-term, operationally-focused perspective compared to the
Enterprise Fund option.
Policy Considerations and Challenges
Due to the financial challenges golf experienced during the first six years of operation, golf has always been a
high-visibility function in the Town and treated differently from other parks and recreation amenities. Expectations
from many have been that golf ought to be self-supporting and not rely upon any subsidies from other
governmental revenues of the Town. The policy question to be answered is the following: is this a reasonable, or
even feasible, expectation?
Additional challenges come from the initial purchase and acquisition of the courses and Community Center
facility. As mentioned previously, the Town acquired the golf and Community Center facility in a bundled
transaction. The total purchase price was $1,000,000. A challenge with this arrangement comes in the question
of how much to allocate of the original purchase price toward golf versus all other Community Center functions.
What ought to be the basis for such an allocation?
Further, the Community Center and golf have shared utilities. Currently, those utilities are paid by golf. However,
if golf were to become its own separate fund, utilities probably ought to be split between the Community Center
and golf. One might assume that whatever allocation basis was used in allocating the original purchase price,
could likely be utilized for utilities as well, although that wouldn't necessarily need to be the case. An entirely
different allocation model could be utilized for future utility cost segregation.
Finally, the cyclical nature of golf revenues ought to be considered in any analysis. Due to our desert climate and
the number of "snowbirds" that reside in our region, the golf function performs best financially in the months of
November through May. Because the Town's fiscal year runs from July through June, an adequate amount of
reserves are required to carry golf through the first four months of a new fiscal year.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
N/A
Attachments
Golf Financial Analysis
Golf History and Forecast
Strategic Plan
APPENDIX 2
Operating:Through Nov Budget Cumulative
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY2024 FY2025 FY2026 FY 2026 Actuals
Revenue
36 Hole 500,158 1,883,452 1,798,304 2,171,484 2,367,136 2,593,395 3,522,083 3,674,489 3,856,880 4,724,718 4,933,178 1,765,022 4,311,050 33,790,299
Pusch Ridge - 105,370 99,134 59,726 106,184 98,316 - 380,375 414,225 528,346 619,276 124,485 528,628 2,535,437
F&B - Overlook - 606,171 708,594 745,766 671,582 554,336 448,782 671,479 725,222 766,679 865,944 355,861 785,400 7,120,416
Total Revenue 500,158 2,594,993 2,606,032 2,976,976 3,144,902 3,246,047 3,970,865 4,726,343 4,996,327 6,019,743 6,418,398 2,245,368 5,625,078 43,446,151
Expenses
36 Hole 1,112,252 3,588,714 3,936,889 3,817,932 3,771,706 3,891,341 3,915,216 3,740,982 3,929,757 4,263,007 4,365,456 1,965,591 4,468,886 42,298,843
Pusch Ridge - 253,513 256,769 236,160 230,196 287,112 - 319,702 390,959 478,320 516,762 185,393 508,480 3,154,886
F&B - Overlook - 861,740 823,383 841,866 785,499 701,538 440,382 630,509 596,910 684,037 756,376 303,128 751,271 7,425,367
Total Expenses 1,112,252 4,703,967 5,017,041 4,895,958 4,787,401 4,879,991 4,355,598 4,691,193 4,917,626 5,425,364 5,638,594 2,454,111 5,728,637 52,879,096
Profit/(Loss)
36 Hole (612,094) (1,705,262) (2,138,585) (1,646,448) (1,404,570) (1,297,946) (393,133) (66,493) (72,877) 461,711 567,722 (200,569) (157,836) (8,508,544)
Pusch Ridge - (148,143) (157,635) (176,434) (124,012) (188,796) - 60,673 23,266 50,026 102,514 (60,908) 20,148 (619,449)
F&B - Overlook - (255,569) (114,789) (96,100) (113,917) (147,202) 8,400 40,970 128,312 82,642 109,569 52,733 34,129 (304,951)
Total Operating
Profit/(Loss)(612,094) (2,108,974) (2,411,009) (1,918,982) (1,642,499) (1,633,944) (384,733) 35,150 78,701 594,379 779,804 (208,744) (103,559) (9,432,944)
Capital Investments 45,116 47,909 29,464 - - 131,035 2,828,061 4,619,904 2,184,848 743,897 119,998 630,000 10,750,233
Initial purchase (1)300,000 350,000 350,000 1,000,000
Notes: (1) $1,000,000 original purchase of courses and community center
1/2 cent sales tax 506,710 2,030,750 2,199,466 2,330,941 2,463,034 2,584,916 2,947,420 3,535,507 3,707,578 3,792,744 3,904,926 593,099 - 30,597,091
HOA contributions - - - - - - 125,000 159,050 159,050 159,050 159,050 - 34,050 761,200
POST AGREEMENTPRE AGREEMENT
Town of Oro Valley
Golf Analysis
APPENDIX 2
Page 1 of 2
APPENDIX 2
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FY 2024
Gross Margin 213,698 225,040 295,419 332,783 495,412 480,305 525,109 589,339 694,275 586,473 430,577 294,092
Expenses 406,558 333,614 420,523 454,504 412,959 349,298 308,213 291,616 334,623 326,900 398,960 530,376
Net Income/(Loss) (192,860) (108,573) (125,103) (121,721) 82,453 131,007 216,896 297,723 359,652 259,573 31,617 (236,284)
FY 2025
Gross Margin 263,005 299,163 297,857 375,363 594,117 556,764 534,838 706,996 737,685 675,958 450,287 378,899
Expenses 411,466 416,806 442,887 488,946 531,458 378,085 374,611 318,371 420,446 381,953 453,967 476,826
Net Income/(Loss) (148,461) (117,643) (145,030) (113,583) 62,659 178,679 160,226 388,625 317,239 294,005 (3,681) (97,927)
FY 2026
Gross Margin 337,860 344,855 377,531 402,476 613,880
Expenses 416,385 419,190 518,351 474,811 456,611
Net Income/(Loss) (78,525) (74,335) (140,820) (72,334) 157,270 - - - - - - -
Town of Oro Valley
Golf Analysis - Contractor Financials
-
200,000
400,000
600,000
800,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Gross Income by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
-
100,000
200,000
300,000
400,000
500,000
600,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Total Expenses by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
(400,000)
(200,000)
-
200,000
400,000
600,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Net Income/(Loss) by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
APPENDIX 2
Page 2 of 2
Town of Oro Valley
Golf Enterprise Fund Financial Analysis
Modified Accrual Basis of Accounting
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Rounds played 8,455 52,010 47,116 49,849 56,898 64,680 86,706 97,111 99,062 109,444 118,597 119,500 119,500 120,695 121,902 123,121 124,352
Revenues 500,158 2,594,993 2,606,032 2,976,976 3,144,902 3,246,047 3,970,865 4,726,343 4,996,327 6,019,743 6,418,398 6,604,000 6,879,324 7,103,807 7,335,864 7,575,758 7,867,424
Expenditures (1,112,252) (4,703,967) (5,017,041) (4,895,958) (4,787,401) (4,879,991) (4,355,598) (4,691,193) (4,917,626) (5,425,364) (5,638,594) (5,989,482) (6,197,846) (6,405,070) (6,622,745) (6,848,442) (7,105,916)
Net Operating Income (612,094) (2,108,974) (2,411,009) (1,918,982) (1,642,499) (1,633,944) (384,733) 35,150 78,701 594,379 779,804 614,518 681,478 698,737 713,119 727,316 761,508
Capital - (45,116) (47,909) (29,464) - - (131,035) (2,828,061) (4,619,904) (2,184,848) (743,897) (630,000) (307,500) (505,000) (325,000) (230,000) (370,000)
Net Income (612,094) (2,154,090) (2,458,918) (1,948,446) (1,642,499) (1,633,944) (515,768) (2,792,911) (4,541,203) (1,590,469) 35,907 (15,482) 373,978 193,737 388,119 497,316 391,508
Forecast
Photo credit: Paul Richardson, “Golden Hour”
STRATEGIC PLAN
FY2026 - FY2027
Town of Oro Valley
2
Focus Area 1
ECONOMIC VITALITY
STRATEGY STATEMENT
The Town of Oro Valley is dedicated to fostering a thriving economy
through strategic initiatives that prioritize commercial development,
primary employment opportunities, and sustainable tourism. Over the
next two years, the Town will capitalize on emerging technologies to
drive data-informed economic growth and enhance competitiveness.
By strengthening partnerships with businesses, educational institutions,
and regional stakeholders, Oro Valley aims to create an inclusive
and vibrant economic ecosystem. Efforts will focus on recruiting and
retaining major employers, supporting local businesses, and investing in
infrastructure to meet future needs. Through cohesive branding, robust
marketing, and proactive planning, Oro Valley will ensure its economy
remains resilient, adaptable to shifting trends, and aligned with the
community’s values and goals.
GUIDING PRINCIPLES
Foster Collaborative
Partnerships
Strengthen relationships among businesses, educational institutions, and regional
stakeholders to sustain a vibrant, inclusive, and innovative economic ecosystem.
Commit to Quality
Development
Ensure high standards in planning, design, and construction to align with Oro
Valley's unique character, environmental stewardship, and long-term economic
health.
Promote Sustainable
Tourism
Invest in tourism initiatives that highlight Oro Valley's natural assets, community
culture, and recreational opportunities.
Recruit and Retain
Major Employers
Focus on recruiting major employers while nurturing relationships with existing
employers to ensure their long-term presence.
Ensure Business Growth
and Stability
Aim to consistently gain more businesses and support the expansion of existing
businesses to foster a resilient local economy.
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Focus Area 1
ECONOMIC VITALITY
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD
DEPARTMENT
FY
COMPLETION
Primary Employment and Commercial Growth Strategy
Evaluate and potentially expand existing efforts to increase primary employment and
commercial growth.
Community
& Economic
Development
FY26
Optimize Tourism Investment
Analyze and implement opportunities for tourism investment with a focus on strategic cost-
benefit analysis and overall community impact.
Community
& Economic
Development
FY26
Integrated Digital Tools Showcasing Oro Valley’s Experiences
Develop a digital platform complemented by physical signage to enhance access to
information and curated experiences across Oro Valley’s natural, historical, recreational, and
cultural assets.
Community
& Economic
Development
FY27
Broadband Infrastructure and Connectivity Strategy
Identify and implement broadband solutions to ensure all areas of town have the necessary
infrastructure for comprehensive coverage.
Innovation &
Technology FY27
Implement Retail Retention and Attraction Strategy
Implement a retail retention and attraction strategy that executes recommendations from the
completed retail leakage report, including educating the public on the benefits of shopping and
dining locally, promoting a strong “Shop and Dine Local” program, and recruiting businesses
that address identified leakage areas.
Community
& Economic
Development
FY26
Celebrate Oro Valley’s History and Culture Through Community Events
Develop and enhance community events and festivals that celebrate Oro Valley’s local history,
culture, and identity by strengthening existing programming and introducing new thematic
experiences that reflect the community’s heritage.
Parks & Recreation FY27
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Focus Area 2
CULTURE AND RECREATION
STRATEGY STATEMENT
The Town of Oro Valley is dedicated to fostering a vibrant community
that values recreation, prioritizes community engagement, and
focuses on user-centered improvement while still respecting the desert
ecosystem. By prioritizing user-centered improvements, community
engagement, and environmentally conscious practices, the Town aims
to foster a vibrant and welcoming environment for residents and visitors
alike that meets the community’s recreational needs.
By prioritizing accessibility, cultural diversity, and innovative
partnerships, Oro Valley will enhance recreational facilities, promote
artistic expression, and support the natural environment, ensuring long-
term resilience and a strong sense of community identity.
Focus on Resident-Centered
Recreation and Cultural
Enrichment
Ensure recreational and cultural programs reflect the needs and expectations of
Oro Valley residents by prioritizing community input, accessibility, and diverse
opportunities.
Foster Community
Engagement and Inclusivity
Actively engage residents, businesses, and organizations in cultural and
recreational initiatives that reflect Oro Valley's identity and community.
Seek to Enhance Accessibility
and User Experience
Improve accessibility, safety, and comfort in parks, trails, and recreational
facilities to ensure equitable access for all ages and abilities.
Ensure Responsible Growth Promote diverse arts, cultural, and recreational programs that serve Oro Valley
residents in a cost-effective manner while attracting visitors.
GUIDING PRINCIPLES
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5
Focus Area 2
CULTURE AND RECREATION
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPARTMENT FY COMPLETION
Develop a Comprehensive Trails Plan
Establish a long-range plan for multi-use paths, natural surface trails, and paved routes with
a focus on access, connectivity, maintenance standards, mapping, signage, and community
outreach to enhance user experience and promote trail use.
Community
& Economic
Development
FY26
Enhance Senior Programming Opportunities
Continue work to implement engaging senior programming that attracts strong participation and
foster collaboration with community organizations already serving older adults, including OVPD.
Parks &
Recreation FY26
Comprehensive Recreation, Arts, and Venue Strategy
Convene arts programming groups and facility owners (public and private) to align
programming with available venues, ensuring diverse and accessible cultural opportunities.
Town Manager’s
Office FY26
JDK Park Outdoor Event Venue Feasibility
Evaluate the feasibility of developing an outdoor venue at JDK Park, including options for a
permanent covered stage or movable equipment, to enhance the park’s role as a hub for town
events, including reconfiguration, private partnerships, and collaboration with community
organizations.
Community
& Economic
Development
FY26
Vistoso Trails Nature Preserve Restoration and Development
Support Vistoso Trails Nature Preserve restoration and development.
Parks &
Recreation Ongoing
Recreational Amenities Financial Analysis
Conduct a comprehensive financial analysis of recreational amenities, including golf courses,
the aquatic center, the community recreation center, and individual parks.
Finance FY26
Golf Enterprise Fund Feasibility Analysis
Evaluate the feasibility of transitioning town-operated golf courses to an enterprise fund model.Finance FY26
Resident-Centered Parks and Recreation Access Strategy
Evaluate parks and recreation fees, programs, and access policies to ensure that Oro Valley
residents - who pay taxes for these amenities - receive prioritized benefits to include reduced
rates, enhanced reservation opportunities, and other measures to strengthen resident access
and value.
Parks &
Recreation FY26
6
Sustain and Strengthen
Trust Through Community-
Centered Policing
Foster meaningful relationships between law enforcement and the community by
prioritizing transparency, collaboration, and proactive engagement to ensure all
residents feel safe, heard, and respected.
Maintain an Appropriately
Staffed Police Force
Implement staffing strategies that align with community needs, balancing sworn
and non-sworn positions to ensure efficient operations, resource optimization, and
high-quality public safety services.
Promote Community Safety
Maintain a visible and proactive law enforcement presence in neighborhoods,
schools, and on streets, with an emphasis on community policing, crime
prevention programs, response times, and collaboration with the Municipal Court
and Legal Department.
Modernize Public Safety
Infrastructure
Ensure public safety facilities and equipment meet current and future demands
and enable efficient operations and a safe environment for all.
Focus Area 3
PUBLIC SAFETY
STRATEGY STATEMENT
The Town of Oro Valley is committed to the
safety and well-being of residents, businesses,
and visitors. We maintain high standards for law
enforcement and public safety personnel, foster
positive community-police interactions, and invest
in essential safety infrastructure.
Recognizing public safety as a collaborative
ecosystem, the Town prioritizes coordination
among key contributors, including the Oro
Valley Police Department, Municipal Court, Legal
Department, Golder Ranch Fire District, and the
community at large.
GUIDING PRINCIPLES
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Focus Area 3
PUBLIC SAFETY
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPARTMENT FY COMPLETION
Long-Term Police Workforce Planning
Commission an independent assessment of police workforce needs over the next 20 years by
analyzing Oro Valley’s growth, crime trends, and community expectations to establish objective
criteria to plan for the need for additional officers.
Finance FY26
Evaluate the Use of Surveillance Cameras for Town Assets and Events
Assess the feasibility, effectiveness, and potential impact of deploying surveillance systems to
protect public assets and enhance security during community events.
Oro Valley
Police
Department
FY26
Combating Cyber-Crime
Strengthen cybercrime education and response efforts tailored to Oro Valley residents.
Oro Valley
Police
Department
FY26
8
Focus Area 4
INFRASTRUCTURE AND TOWN ASSETS
STRATEGY STATEMENT
The Town of Oro Valley is dedicated to maintaining
and enhancing its infrastructure and assets, such as
good roads, bridges, water system, and stormwater,
to meet the evolving needs of the community.
By focusing on efficient resource allocation and
proactive planning, the Town aims to provide safe,
reliable, and high-quality infrastructure that supports
long-term community well-being. By fostering
regional partnerships and embracing innovative
solutions, Oro Valley aims to optimize asset
utilization, promote sustainable growth, and deliver
infrastructure improvements that enhance quality of
life while reflecting the Town's commitment to fiscal
responsibility.
GUIDING PRINCIPLES
Ensure Fiscal
Responsibility and
Long-Term Value
Implement cost-effective and forward-looking infrastructure strategies, prioritizing
road maintenance, water supply planning, and asset management to align with
community needs and long-term growth.
Enhance Transportation
and Mobility
Maintain high-quality roads with a focus on safety, efficiency, and accessibility for all
users, including pedestrians and cyclists.
Maximize Asset
Utilization
Optimize town-owned properties to address community expectations, maintaining
Oro Valley's aesthetic standards and delivering value through responsible use and
development.
Engage as a
Collaborative Partner
Actively participate in regional and large-scale initiatives, contributing Oro Valley’s
voice and expertise to influence favorable outcomes.
Invest in Functional and
Accessible Facilities
Ensure Town facilities are well-maintained, accessible, and enable staff to deliver
services effectively to community members.
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3
4
5
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Focus Area 4
INFRASTRUCTURE AND TOWN ASSETS
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPARTMENT FY COMPLETION
Police Facility and Satellite Office Evaluation
Continue to evaluate and determine the preferred approach for addressing space needs at
the police department’s main facility and satellite offices to ensure efficient and effective
operations. This initiative includes decision-making, identifying funding sources, and
advancing comprehensive facility planning.
Public
Works FY27
Oracle Highway Median Beautification
Collaborate with the Arizona Department of Transportation to enhance medians at key
commercial intersections along Oracle Highway, creating a more welcoming and visually
appealing town entrance by prioritizing cost-effective, low-maintenance solutions.
Public
Works FY26
Secondary Fueling Station Evaluation
Assess the need for a second fueling station and other fueling options, including a cost-benefit
analysis and fleet efficiency improvements for police vehicles and other smaller fleet vehicles.
Public
Works FY27
Invasive Plant Species Management Program
Identify, remove, and actively manage invasive plant species on town-owned properties.
Provide guidance and incentives for private property owners to encourage community-wide
participation in invasive species management.
Town
Manager’s
Office
FY26
Resource Conservation and Renewable Energy Initiatives
Identify opportunities to reduce the town’s reliance on non-renewable resources and lower
operational costs by installing resource conservation products in town facilities. This initiative
will also explore ways to encourage businesses and residents to adopt similar practices.
Town
Manager’s
Office
FY27
Create a Transportation Infrastructure Plan
Develop a comprehensive Transportation Infrastructure Plan that establishes sustainable
strategies for the construction, operation, and maintenance of the Town’s transportation
network. This initiative includes finalizing a town-wide roadway service standards document
that consolidates roadway access and service level criteria into an easy-to-reference format for
Council review.
Public
Works FY26
Evaluate Rooney Ranch Property Use
Continue to evaluate and determine the preferred approach for potential uses for the Rooney
Ranch property to ensure optimal alignment with community needs and Town priorities.
Town
Manager’s
Office
FY26
Coordinated Waste and Recycling Pickup
Develop an RFP template for HOAs and collaborate with HOAs on public streets to streamline
and coordinate weekly garbage and recycling hauling services, reducing wear on public
streets and enhancing service efficiency.
Public
Works FY26
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Focus Area 5
LAND USE AND DESIGN
STRATEGY STATEMENT
The Town of Oro Valley is committed to thoughtful land use and high design standards
that balance the community's evolving needs with its traditional character and values.
By resolving code inconsistencies, engaging residents in planning the future, and
leveraging innovative technologies, the Town fosters a business-friendly environment
while preserving the integrity of its neighborhoods and natural landscapes.
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPARTMENT FY COMPLETION
Residential Animal Husbandry Zoning Review
Reevaluate residential animal husbandry zoning regulations, incorporating public input to
consider potential code changes for personal use and local businesses while aligning with Arizona
and USDA exempt producer guidelines.
Community
& Economic
Development
FY26
Reducing Water Use in Residential Landscaping
Develop a public awareness campaign to promote water-efficient landscaping and reduce
residential landscape water use by a measurable amount.
Water Utility FY27
OV Path Forward
Continue development of the OV Path Forward Initiative, including working groups, policies, and
action items, leading to approval and implementation.
Community
& Economic
Development
FY26
Outdoor Lighting Code Update
Update the Town's lighting code to preserve the night sky and align with Pima County standards.
Community
& Economic
Development
FY26
GUIDING PRINCIPLES
Maintain Oro
Valley's Unique
Character
Preserve the town’s distinctive identity by integrating cohesive design standards that honor
the natural desert and mountain landscapes while upholding Oro Valley's high-quality
aesthetic expectations.
Strategically
Manage Growth and
Redevelopment
Promote thoughtful development that supports opportunities to live, work, shop, and play
while preserving the community's neighborly feel and meeting housing needs of citizens to
age in place.
Advance
Thoughtful and
Transparent Design
Ensure zoning codes, design standards, and regulations reflect best practices, promote
transparency, and support high-quality development that aligns with the General Plan and the
character of Oro Valley.
Protect and
Restore the Desert
Ecosystem
Champion environmental stewardship through land-use practices that preserve native
vegetation, reduce ecological impact, and support the long-term health of Oro Valley’s
natural environment.
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3
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11
Focus Area 6
EFFECTIVE AND EFFICIENT GOVERNMENT
STRATEGY STATEMENT
The Town of Oro Valley is dedicated to fostering a high-performing, innovative, and adaptive government that effectively
meets the needs of its residents, employees, and partners. By improving operational efficiencies, leveraging technology, and
prioritizing employee development and retention, the Town aims to provide exceptional services, safeguard resources, and
ensure long-term organizational resilience while adapting to state-mandated financial challenges.
GUIDING PRINCIPLES
Enhance Operational Efficiency Simplify processes, align performance metrics, and coordinate reporting to
optimize resource utilization and improve service delivery.
Promote a Thriving Workforce
Build a skilled and service-oriented workforce by offering competitive
compensation, supportive benefits, and a workplace culture rooted in
community care and dedication.
Foster Organizational Resilience Strengthen planning for health, safety, and continuity to ensure the
government can adapt and respond effectively to evolving challenges.
Enhance Public Engagement and
Transparency
Develop collaborative partnerships, increase communication through diverse
platforms, and implement outreach initiatives to ensure residents understand
government activities and actively contribute to governance.
Improve Resident Satisfaction
and Service Quality
Focus on responsiveness to residents, consistently improve services, and
ensure public satisfaction through effective communication, operational
excellence, and thoughtful program delivery.
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPT.FY COMPLETION
Regional Intergovernmental Cooperative Services
Identify opportunities for regional collaboration to reduce costs and improve efficiency through
intergovernmental cooperative services.
Town Manager’s
Office FY26
Oro Valley Network Re-Architecture
Transform the network infrastructure to improve security, performance, and resilience, focusing
on critical systems like Public Safety and the Water Utility.
Innovation &
Technology FY27
Explore AI Technology to Further Improve Customer Service Inquiries
Conduct research and evaluate the potential of artificial intelligence chatbots to enhance
customer service by providing residents with timely, accurate responses to common inquiries.
Innovation &
Technology FY26
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3
4
5
Focus Area 7
FINANCIAL STABILITY
STRATEGY STATEMENT
The Town of Oro Valley is committed to maintaining long-term financial stability by enhancing operational efficiencies,
optimizing resource allocation, and proactively addressing economic uncertainties. By securing external funding, adapting
to shifting fiscal conditions, and leveraging economically mature commercial/retail annexation opportunities, the Town
aims to ensure the delivery of high-quality services, programs, facilities, and infrastructure while preserving and improving
its financial health.
STRATEGIC PLAN PROJECTS
PROJECT DESCRIPTION LEAD DEPARTMENT FY COMPLETION
Annex Mature Retail/Commercial Areas
Target high-potential commercial and retail areas for annexation to strengthen the Town’s
economic base and drive sustained revenue growth.
Town Manager’s
Office Ongoing
Benchmark Revenue Sources
Conduct ongoing monitoring and benchmarking of the Town’s major revenue sources against
municipalities in the region to enhance financial resilience, maintain competitiveness, and adapt
to evolving economic conditions.
Finance Ongoing
Analyze the Annexation of State Lands
Conduct an internal analysis of the feasibility and strategic implications of annexing the Arroyo
Grande area and other state-owned lands along the Town’s western boundary. This includes
evaluating opportunities and challenges, aligning with long-term growth and planning goals, and,
if feasible and desired, reengage stakeholders to evaluate a coordinated annexation strategy.
Town Manager’s
Office FY26
Budget Efficiency and Cost Reduction Initiative
Carefully evaluate budget to look for efficiency opportunities and reduce costs for citizens.
Town Manager’s
Office Ongoing
GUIDING PRINCIPLES
Diversify Revenue for Stability
Develop a balanced revenue portfolio by diversifying income streams, structuring
fees to align with maintenance and capacity needs, and exploring new revenue
sources acceptable to the community, including the pursuit of strategic
annexations, partnerships, and innovative funding opportunities.
Strategically Pursue
External Resources
Secure funding from grants, regional programs, and other external sources to
reduce reliance on local tax revenues while supporting critical projects and
initiatives.
Ensure Fiscal Responsibility
Maintain a balanced budget, implement a structurally balanced 5-year financial
forecast, and prudently manage debt and expenditures to uphold financial stability
while optimizing services and minimizing costs for residents.
Promote Transparency and
Community Communication
Foster clear, accessible communication about the town’s budget, fee structures,
and financial priorities to build public trust and encourage resident engagement in
financial decision-making.
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