Opinion

Thomasson: Paradise Valley is in great fiscal shape

Posted 4/13/21

Last week while unloading the dishwasher, I came across a pair of very clean takeout-sushi chopsticks. I looked at my husband Gary, who, with a twinkle in his eye said, “If you can wash and …

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Opinion

Thomasson: Paradise Valley is in great fiscal shape

Posted

Last week while unloading the dishwasher, I came across a pair of very clean takeout-sushi chopsticks. I looked at my husband Gary, who, with a twinkle in his eye said, “If you can wash and reuse baggies, I can reuse chopsticks.”

We both laughed the way couples who have been married a long time laugh when they prank each other.

Truth is, one of the many reasons we love living in Paradise Valley is the long tradition of fiscal conservatism. Since I began serving you on Town Council in 2019, I’ve learned even more about how well we are managed:

1. Our annual operating budget is approximately $32 million; about 60% of our revenue comes from local sales tax, resort bed tax and construction sales tax.

The balance comes from state shared revenue, highway improvement funds and various fees and license agreements. Because we have no local property tax generating a predicable revenue stream, our policy is to keep at least 90% of our annual operating budget in a reserve account, and we often have over 100%, typically one of the highest in the state.

2. Several years ago, our mayor (working with ASU graduate students) commissioned a revenue risk assessment study to model the impact of potential revenue shortfalls. Little did we know how well this study would prepare us for the 2020 pandemic when our April revenues quickly dropped over 50% compared to 2019. Since Paradise Valley is so tourism-dependent, we experienced one of the largest revenue decreases of any Arizona municipality.

3. We weathered the financial loss by planning for three levels of funding recovery. We balanced our budget this past year by using unspent capital funds from the previous year for essential projects, postponing the projects we could, drawing some funds from reserve, seeking additional recovery funds and not replacing staff after natural attrition, among other measures. As our local economy gradually recovers, we are returning to our regular budget in a very planned way.

4. In order to cash-flow the $12 million road improvements around the Five Star/Ritz-Carlton development until we receive reimbursement, prior to the pandemic we negotiated an $8 million private placement bond at 1.09% interest — an excellent rate. The Chicago-based bond consultant who helped us with the placement commented he was ready to move his family to Paradise Valley based on our overall financial condition alone.

5. And finally, our police pension plan (PSPRS - Public Safety Personnel Retirement System) is one of the most well-funded in the state with an 85% funded status. Having worked for a pension actuarial consulting firm for 30 years, I have special passion for a well-funded pension plan and am grateful for the wisdom of prior councils and support our current council as we are united in working toward a 100% funded PSPRS.

As we drive through our beautiful town enjoying the mountains and open spaces while waving to our neighbors, we can also rest comfortably knowing that the Town of Paradise Valley is in excellent financial shape and you are served by a council of seven of your fellow residents equally committed to our tradition of fiscal conservatism.

PS Yes, I will be getting my husband a nice set of mahogany chopsticks so he can properly enjoy his post-fishing trip hamachi.

Editor’s Note: Anna Thomasson is an elected member of Paradise Valley Town Council.

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