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The Town of Paradise Valley has passed its tentative budget for fiscal year 2020-21, setting the next financial prospectus at $64.2 million.
Paradise Valley Town Council and municipal officials have been working on fine-tuning the budget for several weeks, as loss of revenue from COVID-19 has severely impacted sales tax projections.
Chief Financial Officer Douglas Allen predicts the town’s operating revenue to be down about 40%.
The total budget as presented is $64,145,371 --- but about $20.5 million is contingency funding in the event revenue bounces back quicker than expected.
The total operating fund, with the top priority needs is set at $26,629,393. If revenues recover, the town has estimated an additional $10 million for secondary priority needs --- which brings the total operating fund to $36,573,401.
On May 28, the Town Council unanimously approved the tentative budget, and set a public hearing for June 11, which is required to occur prior to the final budget approval.
With the tentative budget now approved, the maximum spending level for the new fiscal year is set. Council can alter or decrease their expenditures but not increase from this point on.
Most of Mr. Allen’s presentations this spring have included bringing forward different scenarios that may unfold as more information is gathered regarding their sales tax revenues during COVID-19, when sharp, abrupt revenue drops began taking place.
Last fiscal year, the town collected more than $5.3 million in all revenues directly tied to local tourism from the months of March 2019 to June 2019.
This accounts for approximately 17% of the town’s General Fund revenue.
On May 14, the town also received information that their retail and hospitality taxes were down 39% for the month of March, compared to last year.
Collections for March 2020 were $699,079, compared to $1,154,171 March 2019.
Overall, total revenue is estimated to be just under $22.2 million for 2021.
Mr. Allen says a handful of changes to the budget took place since the council’s last discussion. They are:
Adjusting the formula to match up the tourism payments on the expenditure side;
Revenue projects adjusted based on March 2020;
Estimated cost reduction for PSPRS legal fees;
Include capital contribution for a Capital Improvement Program project;
Strategically push a CIP project out one year;
Reclassify miscellaneous expenditures.
The net increase to the total budget is $75,000, town documents show.
Mr. Allen pointed out an updated capital improvement program, which sets a total dollar amount --- but does not identify costs for specific projects.
During the May 28 council meeting, the most discussion among elected leaders regarded a policy for employee sick and vacation leave.
Three policy amendments are proposed to be included as part of the budget adoption: one for personnel health and safety; one for financial management flexibility; and one for financial management clarity.
The health and safety policy proposed allowing employees who have an accumulation of over 480 hours of sick leave in a year to convert two hours of sick leave to one hour of vacation, or to be paid out 50% of the cash value.
The group agreed to implement a policy in the interim, and bring back the topic for further discussion later.
At the end of the discussion, Vice Mayor Julie Pace thanked Mr. Allen and fellow colleague councilwoman Ellen Andeen for continuing to find town funds.
“We need to remember in this budget, given all that we’re dealing with --- fortunately we’re well-reserved, but with all of this opportunity to try and find money, I think Councilwoman Andeen found $25,000 to save in the PSPRS attorney; and another $10,000 in bond fees --- I know there’s probably others she has dug in, and it’s really great to see that expertise benefit us,” Ms. Pace said.
“It’s kind of what public policy and elected leaders do: is try to find ways to make it better. I think it’s been great.”
Ms. Pace says the financial planning Paradise Valley officials have put in place over the years is paying off now.
“Just a shout out that in this environment we’re doing pretty well as a council,” she said. “Compared to a lot of municipalities, our town is doing pretty well, and I really feel badly for so many towns that are suffering so greatly.”
Mayor Jerry Bien-Willner also voiced his appreciation of the town staff and Mr. Allen’s hard work preparing this year’s budget.
“We still have more to do on the budget, but there’s been a tremendous amount of hard work from the staff --- and Doug, I know you’re the tip of the spear on this. We also understand that it’s a multi-disciplinary approach that touches just about every person in the organization,” Mr. Bien-Willner said.
“It’s been, once again, a very informative process. Very transparent, which is what we expect. So thank you, all.”
Melissa Rosequist Managing Editor | East Valley @mrosequist_
I first started my journalism portfolio at the age of 15 while in high school before going on to study at the Walter Cronkite School of Journalism and Mass Communications. Being in the journalism field is the only professional avenue I was ever interested in, and have worked hard covering topics from school boards to hard news while working for the Independent, where I have been awarded for my reporting.
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