Andeen: Paradise Valley’s town banking and investments

Posted 11/30/21

I am very committed to the town’s financial stewardship and investment planning. Finance and analysis is what I enjoy doing, and I am glad to share that expertise while serving on Town Council …

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Andeen: Paradise Valley’s town banking and investments


I am very committed to the town’s financial stewardship and investment planning. Finance and analysis is what I enjoy doing, and I am glad to share that expertise while serving on Town Council and on the town’s banking and investments working committee.

With an MBA, summa cum laude, from the University of Arizona Eller College of Management, a background in accounting and finance and 25 years in the banking and finance industry working for Bank of America and Ally Bank, it was time well spent for me on this committee.

I regularly attend the State of Arizona’s Office of the Treasurer Board of Investment meetings and PSPRS (Public Safety Personnel Retirement System) monthly meetings to gather pertinent information useful to the execution of town resources.

I keep my eyes on costs and finance items that could impact the town.

In the summer of 2020, I participated, along with Council members Moore and Thomasson with former town Chief Financial Officer Doug Allen in a working committee focused on the review of our town’s banking and investments. The committee worked well together and proposed several suggestions to then CFO Doug Allen.

Since then, we have been waiting to get these suggestions on the agenda to discuss with the full Town Council.

This October, after my attendance in the latest round of State Treasurer Board of Investment meetings and a very promising PSPRS meeting, I engaged our interim CFO, along with Town Manager Keimach inquiring as to when we could get the town’s banking and investment discussion scheduled since it has been a year, and there are options that need to be discussed.

This meeting with the full Town Council had been postponed because of COVID, but also due to the departure of CFO Doug Allen. I anticipate that the agenda item will be scheduled soon.

To provide some background information, as you know, the town has no property tax and thus, we rely on diversified revenue streams for funding. If there were to be an economic event, that is where our healthy reserves would kick in.

During the last audit review, our auditors addressed that we have 800 days of cash on hand (unrestricted) and 1,000 days of cash on hand (restricted and unrestricted). To put it in perspective, most local governments have perhaps less than six months in reserves.

We are very conservative to protect residents and avoid a property tax. Our annual expenditures average around $26 million-$28 million so the town is in a good financial position.

It is also my belief, to limit big government, we should discuss what financial measures or triggers enable us to divest some of these funds and give back to our residents. As suggested by Councilmember Julie Pace in earlier meetings, a reduction or elimination of the fire service fee may be something to consider, especially as the Ritz property comes on line.

Taxes (66%) account for most of the town revenue, which includes the collection of the resorts transaction privilege (sales) tax & occupancy (bed) taxes. We are very blessed to have such world class resorts in our community.

Statements ending fiscal year 2020 show town total investments increased from $42 million to $63 million, year over year, with $28 million of the monies held in a money market account. As we know, those yield low returns.

Specifically, our money market account held $11 million in 2019 at fiscal year-end, and in our 2020 fiscal year end statements held $28 million.

Prudent diversified investing of those funds is suggested. Keep in mind, to stay in compliance with state law, our investment policy and conservative values, any government investment must comply and be invested first, based on safety, then liquidity, then yield.

We currently are invested in US Treasuries and Agencies, Corporate Bonds, Money Markets and the State Treasurer’s Pools.

In addition, I am very excited to announce, from the latest PSPRS meeting, the fiscal year-end yield was 27.8% which far exceeds the assumed rate of 7.3% by more than three times what was anticipated. That means, we are much closer to fully funding our Public Safety Personnel Retirement Fund (retirement benefits for our public safety officials), which has been a tremendous financial burden to the town.

In summation, the town has an investment policy that recommends a permanent Town Investment Committee, which we currently have not yet implemented but I believe we should do so. The town investments currently are managed well by the CFO. Given the figures I have discussed today, it would be my suggestion that the committee be established so we follow best practices and recommendations from our Town Investment Policy.

Stay tuned to upcoming meetings for these discussions to take place. As always, I welcome your comments and input.

**Numbers quoted come from the PAFR (Popular Annual Financial Report 2020) pages 8, 10, 11, 14, 22 & 23. The PAFR can be found on the town’s website at Budgets & Financial Reports | Paradise Valley, AZ - Official Website (paradisevalleyaz.gov)

Editor’s Note: Ellen Andeen is an elected member of Paradise Valley Town Council, and the second member of the Andeen family to serve as an elected leader.


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