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
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AGENDA TITLE:
Title
Update and Discussion of the CIP and PSPRS Financial Plans
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SUMMARY STATEMENT:
Staff will have a brief presentation followed by Council discuss regarding the current status on the CIP and PSPRS financing plans for the fiscal year ending June 30, 2020.
This will include steps and timing to issuing excise tax obligations that will be available by Tuesday November 19th.
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; $9,000,000 in FY2019; and $3,000,000 in July, the first week of FY2020 for a total of $18,000,000.
* Based on PSPRS 2018 actuarial and payments made in FY2019 and FY200, the Unfunded Liability balance is at least $5,800,000 and expected to increase a...
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