Paradise Valley Town Council hosted a seven-hour “retreat” Sept. 17 to give council members and town staff an opportunity to better understand and discuss the issues and challenges that face the municipality now — and in the future.
Discussion focused on numerous topics, that ranged from potential issues that could impact the town to council and staff objectives and goals for the coming year.
The good news is that the town appears to be past its financial challenges — and in fact has more money than it can legally spend. Part of the discussion focused on ways to change current rules that restrict how the town can spend its reserves.
Paradise Valley Town Manager Kevin Burke says issues of note coming down the municipal pike include development of a local drone ordinance, creation of the police department’s five-year strategic plan and discussion of legislative issues revolving around state-shared revenues.
The retreat was hosted by the Sanctuary Camelback Mountain Resort at 5700 E. McDonald Drive in the Town of Paradise Valley.
Paradise Valley Town Council is looking to focus on the following items during the current fiscal year:
- More efficient executive sessions;
- Increased regular communication with staff and members of council;
- Hosting a town meeting breakfast on the upcoming Ritz-Carlton project on Oct. 7;
- Considering a potential joint planning commission and town council meeting on the Ritz-Carlton project;
- Improved relations between staff and residents;
- A new focus on council and staff communication regarding hot-button development issues;
- The development of performance plans for each town department.
Paradise Valley town staff asked its governing body to clearly define expectations of staff members, provide proactive questions to staff during moments of direction and to provide staff members with an indication of the degree of importance for certain items.
Money to spend
An item discussed at length was the Town of Paradise Valley possibly pursuing a permanent base adjustment to its budget expenditure limitation, which is defined by state statute.
“Let’s start with an even playing field,” said Dawn Marie Buckland, the town’s administration and government affairs director. “It’s based on population and inflation, but local government needs to be responsive to local issues.”
An Arizona municipality’s expenditure limitation is defined by adjusting the municipality’s base-year — fiscal year 1986 — actual expenditures of local revenues to account for any voter-approved permanent base adjustments, changes in population or in inflation, according to the Office of the Auditor General.
Paradise Valley has a reserve balance of $23.4 million, which is 138 percent of the current year operating expense allocation, town officials say.
The original conception of a defined expenditure limitation was originally defined with a 1979-80 base year, according to Ms. Buckland.
“From that base group you cannot grow,” she said. “It is based on the idea that government is meant to represent the needs of the community. This base allocation doesn’t always address the unique needs of the community.”
Town staff says Paradise Valley has four options to address the need to expand its expenditure limitation. They are:
- A permanent base adjustment that allows a local government to set its own expenditure limitation based on existing revenues;
- A Home Rule option that allows local government to set its own expenditure limitation over a four-year period;
- A capital projects option that allows local government to accumulate dollars over time for a specific project or set of projects;
- A one-time override of the expenditure limitation that lasts for one fiscal year.
Town officials last December reported municipal revenues exceeded uses by $4.3 million — but was not able to use those funds for day-to-day operations or capital projects. Town leaders now say they want to draw from that untapped revenue.
“A decrease to construction (and) redevelopment slowdown bought us a little bit of time before we had to address this,” Ms. Buckland said.
“The expenditure limitation is about protecting the residents and giving them the opportunity to decide what kind of services they want.”
While the municipality is expected to spend up to $40.8 million this fiscal year, the General Fund — what is used for day-to-day operations — stands at $24.7 million, which is in line with the expenditure limitation set by the Arizona Legislature.
“While our population does not grow, according to the Census, our demand for services does,” Mr. Burke said of costs associated with large sewer taps, the utility servicing of sophisticated buildings, maintenance of fire hydrants and the burying of utilities.
“That is what is driving the difference in the expenditure limitation,” he said.
Changes to the expenditure limitation are nothing new for the Town of Paradise Valley as the municipality has convinced voters to approve base adjustments to the limitation level in fiscal year 2000 and fiscal year 2006, according to Mr. Burke.
“Home Rule is the ultimate option with flexibility, but you have to go back every four years,” he said of the drawback to the Home Rule option. “If you have the money you can make that budget.”
Another key is guessing the right expenditure limitation increase, Mr. Burke says.
“The 2007 adjustment did not account for the Ritz-Carlton project. … At least what is planned now,” he said. “We haven’t invested much in our sewer over the last 20 years but that bill is coming. There is no right answer to this question — that’s why you are making the decision.”
Paradise Valley Vice Mayor Paul Dembow says, to him, it appears there is only one option that works for the Town of Paradise Valley.
“Only one fixes that problem,” he said of the permanent base adjustment to the defined expenditure limitation. “We don’t want anything temporary here because as you say that would be kicking the can down the road.”
The mayor said the real key is to plan properly.
“Let’s not make the mistake of previous councils and count our chickens before they hatch,” he said pointing to the possibility of a November 2016 ballot push. “By then you will know how many eggs you have.”
Paradise Valley Town Council meets 6 p.m. Thursday, Sept. 24 at Town Hall, 6401 E. Lincoln Drive.
North Valley News Editor Terrance Thornton can be contacted at 623-445-2774 or at firstname.lastname@example.org