TO: Mayor Bien-Willner and Town Council Members
FROM: Jill Keimach, Town Manager
Douglas Allen, CPA
DATE: November 21, 2019
DEPARTMENT: Finance
Staff Contact Douglas Allen
End
AGENDA TITLE:
Title
Approve Resolution 2019-21 Declaring Intent to be Reimbursed in Connection with Certain Capital Expenditures in and for the Town
Body
RECOMMENDATION:
Recommendation
Approve Resolution 2019-21 Declaring Intent to be Reimbursed in Connection with Certain Capital Expenditures in and for the Town
Background
SUMMARY STATEMENT:
As discussed in the Council work sessions on October 24 and November 21, this declaration allows for the Town to be reimburse for Capital Improvement spending made within 60 days before and after the date of this resolution if the Town issues obligations for its Capital Improvement Plan.
WHY BOND IN GOOD ECONOMIC TIMES
* The Arizona Constitution prescribes an Annual Expenditure Limitation ("AEL")
* Paradise Valley voters approved an increase the AEL to assist paying the PSPR unfunded liability
* Two types of expenditures: "subject to" the AEL and "exempt from" the AEL
* Expenditures that are "exempt from" include spending federal grant funds, investment earnings, contributions and donations from private organizations, the use of bond proceeds and the repayment of bonded debt.
* Availability of cash and revenue is not the concern; the concern is the AEL capacity and the timeliness and willingness of developer reimbursements for Capital Expenditures.
* The Town's total CIP is over $17 million and "subject to the AEL" with certain reimbursed projects qualifying as "exempt from" the AEL.
* By development agreement, the Town fronts cash for the 5-star related projects and developer reimburses
* Timing of or not receiving the reimbursements could put the Town at risk of exceeding its expenditure limitation
* Paying the PSPRS unfunded liability has been a Council priority
* $5,000,000 in FY2017; $1,000,000 in FY2018; $9,000,0...
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