HomeMy WebLinkAboutTown of Paradise Valley - Public Financial ReportRevenue
Page 8
Introduction
Page 3
Financial
Statements
Page 16
Enterprise Operations
Page 19
Capital
FinancingPage 24
Capital
AssetsPage 25
Cash and
InvestmentsPage 22
Other
Documents
Page 26
Staffing and
Pension
Page 12
Expenditures
Page 14
Town of Paradise Valley, AZ
The Government Finance Officers Association of the United States
and Canada (GFOA)has given an Award for Outstanding
Achievement in Popular Annual Financial Reporting to the Town of
Paradise Valley,Arizona for its Popular Annual Financial Report for
the fiscal year ended June 30,2020.The Award for Outstanding
Achievement in Popular Annual Financial Reporting is a prestigious
national award recognizing conformance with the highest standards
for preparation of state and local government popular reports.
In order to receive an Award for Outstanding Achievement in
Popular Financial Reporting,a government unit must publish a
Popular Annual Financial Report,whose contents conform to
program standards of creativity,presentation,understandability,and
reader appear.
An Award for Outstanding
Achievement in Popular
Financial Reporting is valid for a
period of one year only.The
Town of Paradise Valley,
Arizona has received a Popular
Award for the last two (3)
consecutive years (fiscal years
ended 2018,2019 and 2020).
We believe our current report
continues to conform to the
Popular Annual Financial
Reporting requirements,and we
are submitting it to the GFOA to
determine its eligibility foranotheraward.
GFOA Outstanding Achievement in PAFR
Introduction PAFR Award
We hope this PAFR sparks your
interests in the Town’s finances.
Respectfully,
Michael CarboneInterimChiefFinancial Officer
03
Welcome Introduction
Popular Annual Financial Report 2021
In the spirit of transparency and full disclosure in financial
reporting,we are pleased to present Paradise Valley’s fourth
Popular Annual Financial Report (“PAFR”).
This PAFR serves as a means of increasing and maintaining
public confidence and trust in the Town’s government.The PAFR
is specially designed to be a reader-friendly financial report forcitizenswhowantabetterunderstandingoftheTown’s finances.
The statements contained in this PAFR are derived from the
Town’s 2021 Comprehensive Annual Financial Report (“CAFR”).The CAFR outlines the Town’s financial position and operating
activities in conformity with U.S Generally Accepted Accounting
Principles (“GAAP”)that includes financial statements and
disclosures audited by Henry +Horne,LLP.While the numbers
in the PAFR are from CAFR,they are presented in summarizedformtobemoreaccessibleanddonotincludeallrequired
disclosures,financial statements,and schedules under GAAP.
As you review this report,we invite you to share any questions,concerns or comments you may have.We also encourage you
to review the audited,GAAP-based,full disclosure financial
statements in the Town’s CAFR(s);along with the Adopted
Budgets and other financial documents accessed from the
Town’s website at www.paradisevalleyaz.gov.
Michael Carbone
04
Introduction Town Profile
OVERVIEW
Town of Paradise Valley, AZ
BASIC FACTS
Named by Time Magazine as the “Best Place to Live”in Arizona,the
Town of Paradise Valley is a small suburb nestled in the mountains
between Scottsdale and Phoenix.The Town is predominantly
comprised of residential and resort properties.Paradise Valley’s
highly educated residents are actively engaged in the community and
its local government.The Town has nearly as many volunteer
positions as employees,including its all-volunteer Council and
Municipal Court judges.
Paradise Valley is home to many world-class destinations:El Chorro,
Doubletree Paradise Valley,Hermosa Inn,Hyatt Andaz,JW Marriott
Camelback Inn,Mountain Shadows Resort,Omni Montelucia,
Scottsdale Plaza,Sanctuary of Camelback,,and coming soon,theParadiseValleyFiveStarRitzCarlton.
12,658 2021 Census…
HISTORY
During the late 1800s,cattle grazed in the area surrounded by the
McDowell Mountains to the east and Camelback Mountain to the south.In
the 1880s,the Rio Verde Canal Company turned this open grazing area
into irrigated farmland.In 1889,the Rio Verde Canal Company sent threesurveyorstothisareawhoweresotakenbythebeautyandtranquilityofthedesertlandscapethattheynamedthisareaParadiseValley.
Settlement in Paradise Valley did not begin in earnest until post World WarII.Paradise Valley,which is in Maricopa County,was a rural residential
area with few commercial entities.Though the homes were modest in size
and style,they were on large parcels of land,usually one to five acres.
In the late 1950s,Phoenix and Scottsdale were looking to expand their
respective boundaries.Residents who lived in Paradise Valley area feared
that they would lose the rural lifestyle they had become accustomed to andwouldsoonbeswallowedupbyPhoenixorScottsdale,and eventuallysubdivisions,shopping centers,new zoning laws and property taxes would
be common.
These concerned residents formed a “Citizens Committee for theIncorporationoftheTownofParadiseValley,Arizona”,who set out with
petitions urging residents to join them in their attempt to incorporate
Paradise Valley.The residents’main goals were to keep:zoning to a
minimum of one house per acre,the area entirely residential,andgovernmentregulationstoaminimum.In April 1961,the Citizens
Committee for Incorporation presented their petition to the Maricopa County
Board of Supervisors.On May 24,1961,incorporation was granted and the
Town of Paradise Valley was established.
Throughout the Town’s 50-
plus-year history, the
residents have strived to preserve the Town’s original
mission –
“to maintain a residential
community in a quiet and
country-like setting with
little government
intervention.”
05
Town Profile Introduction
Popular Annual Financial Report 2021
06
Introduction Town Profile
As a general law town prescribed in the Arizona Revised Statutes,the
Town government operates under the Council-Manager form of
government.Policy making and legislative authority are vested in the
Town Council,which consists of seven Council members.The Mayor is
elected by voters to a two-year term and the six Council members are
elected to staggered four-year terms.The Council selects the Vice-Mayor.
The Town Council is responsible for,but not limited to,the adoption of
local ordinances,the Town budget,the development of citizen advisory
committees,and the appointment of the Town Manager,Town Attorney
and the Municipal Court Presiding Judge.The Town Manager is
responsible for implementation of the policies of the Town Council and
administering day-to-day Town operations.
TOWN GOVERNMENT
Jill KeimachTown Manager
J. Tyrrell Taber
Presiding Judge
Front: Mayor Jerry Bien-Willner and Vice Mayor Scott MooreBack: Councilmembers Mark Stanton, Ellen Andeen, Julie Pace, Paul Dembow, and Anna Thomasson
Town of Paradise Valley, AZ
07
Town Profile Introduction
The Town provides a limited range of services,including police,courts,
construction and maintenance of streets,planning and building services.
Fire protection services are provided through an intergovernmental
agreement with the City of Phoenix.The City of Scottsdale provides
wastewater treatment services through an intergovernmental agreement
for approximately 60%of the geographic area of the Town and the City of
Phoenix provides sewer service to the remaining 40%.Water services are
provided by the City of Phoenix and two private water companies.Solid
waste and Ambulance services are provided by private companies.
ORGANIZATION CHART
TOWN SERVICES
Popular Annual Financial Report 2021
GOVERNMENTAL Fiscal Year
REVENUE by Type 2021 2020 2019 2018
Taxes $ 22,840,680 $ 23,603,226 $ 23,086,133 $ 20,565,163
Intergovernmental 9,826,857 5,278,968 4,914,274 4,825,303
Fines and forfeitures 2,143,881 1,763,211 3,404,559 2,881,561
Licenses and permits 3,084,019 3,232,232 2,823,054 2,712,910
All other 748,778 2,016,056 2,314,632 1,873,804
Total revenues $ 38,644,215 $ 35,893,693 $ 36,542,652 $ 32,858,741
08
Revenue Governmental
WHERE THE MONEY COMES FROM…
For fiscal year 2021,total revenues for the Town’s governmentaloperationswere$38,644,215.Revenue categories are:
Taxes account for the majority of governmental revenue (66%).
This includes the “transaction privilege (sales)tax”and the
“occupancy (bed)tax”.The Town does not have a “Townpropertytax”.
Intergovernmental is the second largest revenue category
(15%).This includes the state shared sales tax,income tax,
and vehicle tax;the highway user fund revenue (HURF);andfederalandstategrants.
Fines and forfeitures are various public safety fees such as
impound,process service,jail and defense fees.
Licenses and permits include building,grading,evacuation,
sub division,right-of-way,and special use permits,plan review,
fire marshal,development and hillside application fees.
All other is any revenue not categorized above.
The chart below and bar graph to the right show a 10-year history of
governmental revenue by category.The pie graph to the right breaksoutrevenuesfor2021bycategory.
Town of Paradise Valley, AZ
Fiscal Year
2017 2016 2015 2014 2013 2012
$ 18,576,603 $ 15,699,670 $ 15,602,093 $ 14,197,985 $ 13,025,260 $ 11,682,657
4,712,850 4,393,807 4,074,853 3,791,372 3,537,464 3,251,086
2,364,100 3,697,261 2,085,650 1,161,685 2,346,166 801,897
2,285,398 2,071,846 1,426,883 1,322,052 1,203,370 1,021,911
611,626 1,275,048 1,030,236 2,737,503 1,272,103 966,116
$ 28,550,577 $ 27,137,632 $ 24,219,715 $ 23,210,597 $ 21,384,363 $ 17,723,667
GOVERNMENTAL REVENUE
09
Operations Revenue
Popular Annual Financial Report 2021
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
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Taxes, $22,840,680 Intergovernmental,
9,826,857
Fines and
forfeitures,
2,143,881
Licenses and permits, 3,084,019 All other, 748,778
Taxes Intergovernmental Fines and forfeitures Licenses and permits All other
TOTAL TAXES Fiscal Year
by Category 2021 2020 2019 2018
Construction $ 6,995,777 $ 7,566,098 $ 5,718,854 $ 4,762,342
Retail & hospitality 8,448,700 8,928,164 9,213,158 8,088,233
All other 2,372,341 1,852,543 2,032,371 1,982,947
Sales tax 17,816,818 18,346,805 16,964,383 14,833,522
Occupancy 3,759,236 4,003,739 4,847,777 4,443,281
Franchise fee 1,264,626 1,252,683 1,273,973 1,288,360
Total taxes $ 22,840,680 $ 23,603,227 $ 23,086,133 $ 20,565,163
10
Revenue Sales Taxes
There are numerous categories and taxable activities within the localsalestax,but is primarily separated in three (3)distinct categories:
Construction,Retail &Hospitality,and All Other.
Construction is generally considered a one-time revenue,becauseoncetheconstructioniscompletedandthetaxiscollected,the activity
is done.Per Town policy,all construction sales tax received in excess
of $500,000 is transferred to the Capital Improvement Program.
Retail &Hospitality has recently become a significant category with
recent growth from new retail opportunities and other amenities.
TRANSACTION PRIVILEGE (“SALES”) TAX
The line graph below shows the three (3)main categories for localsalestaxfrom2015-2021 (in millions).
Town of Paradise Valley, AZ
$6,995,777 $7,566,098 $5,718,854 $4,762,342 $4,327,639 $3,181,485 $3,049,241
$8,448,700
$1,168,964
$9,213,158
$8,088,233 $7,370,408
$5,788,062 $5,705,830
$2,372,341 $9,611,743 $2,032,371 $1,982,947 $2,120,271
$2,376,355 $2,692,314
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
2021 2020 2019 2018 2017 2016 2015
Construction Retail & hospitality All other
Fiscal Year
2017 2016 2015 2014 2013 2012
$ 4,327,639 $ 3,181,485 $ 3,049,241 $ 3,048,856 $ 2,340,481 $ 1,780,801
7,370,408 5,788,062 5,705,830 5,096,252 4,789,447 4,362,912
2,120,271 2,376,355 2,692,314 2,155,702 2,105,715 1,960,183
13,818,318 11,345,902 11,447,385 10,300,810 9,235,643 8,103,896
3,701,738 3,207,626 3,117,450 2,835,515 2,727,892 2,523,288
1,056,547 1,146,142 1,037,258 1,061,660 1,061,725 1,055,473
$ 18,576,603 $ 15,699,670 $ 15,602,093 $ 14,197,985 $ 13,025,260 $ 11,682,657
Other Taxes Revenue
11
Hospitality is a critical element that contributes greatly to the Town’s
character.These services generate a growing portion of the Town’s
operating revenue.The room tax charged in hotels,known as theOccupancytaxhasmorethandoubledsince2010.With the onset
of covid19 and insuring “shut downs”,the Town’s tourism industry
has seen significantly lower activity.
Along with the City of Scottsdale,the Town dedicates significantresourcestoinvestintourismpromotionthroughacontractwith
“Experience Scottsdale”as their DMO (Destination Marketing
Organization).
The graph below displays the occupancy tax and franchise feecollectionsfrom2015-2021 (in millions).
TRANSIENT LODGING (“OCCUPANCY”) TAX
Popular Annual Financial Report 2021
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
2021 2020 2019 2018 2017 2016 2015
3.8 4.0 4.8 4.4 3.7 3.2 3.1
1.2 1.3
1.2 1.3
1.0 1.1 1.0
Occupancy Franchise fee
FULL TIME EQUIVALENT Fiscal Year 20xx
by FUNCTION 21 20 19 18 17 16 15 14 13 12
Police department 50 49 49 44 42 41 41 39 34 34
Development & engineering 16 18 16 15 13 13 13 13 11 10
Public works 13 13 13 13 13 13 13 13 15 14
Courts 9 7 7 6 5 5 5 5 5 5
All other 19 18 18 16 15 15 14 14 14 13
Total full time equivalents 107 105 103 94 88 87 86 84 79 76
12
Staffing Levels
ALL TOWN SERVICES
Staffing levels are measured in full-time equivalents (“FTEs”).In2021,the Town employed a workforce of 107 FTEs with the Police
department being 47%of total staffing.The Town utilizes contract
service providers for fire and wastewater with private companies
providing water,ambulance and garbage services.
Routine maintenance by Police & Information technology (below)
Public works performing landscaping
(left) and mill overlay (top)
Town of Paradise Valley, AZ
0
20
40
60
80
100
120
21 20 19 18 17 16 15 14 13 12
50 49 49 44 42 41 41 39 34 34
57 56 54 50 46 46 45 45 45 42
Police department All Other
13
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM
Public Safety Retirement
Sworn police officers participate in the Public Safety Personnel Retirement
System (“PSPRS”).One of the Town Council’s primary goals is to pay
down the unfunded liability as “quickly as reasonably possible”.
The Town’s 2021 CAFR uses the most recent PSPRS “GASB”reports withthe“measurement year 2020”.In fiscal year 2021,the Town contributed
$1.9 million to pay down the unfunded liability.This will be in the 2021
PSPRS Reports that will be used for the Town’s 2022 CAFR.
Below shows the years for the CAFR with PSPRS in brackets.The Town’s2021CAFR(PSPRS 2020)“2021(20)”shows,though the Town’s totalpensionliabilityincreasedto$40.2 million,the plan assets increased to
$30.1 million or 75%of the total pension liability and the unfunded liability
increased to $10.1 million which is 25%of the total.This does not include
the payments made in FY2021.
Popular Annual Financial Report 2021
PSPRS GASB Report
Is one year arrears 21(20)20(19)19(18)18(17)17(16)16(15)15(14)14(13)13(12)12(11)
Town's plan assets 30.1$ 28.8$ 18.6$ 17.0$ 9.3$ 7.7$ 7.1$ 8.4$ 8.3$ 9.0$
Unfunded liability 10.1 9.4 17.7 17.9 22.5 21.3 21.1 15.5 14.4 12.2
Total pension liability 40.2$ 38.2$ 36.3$ 34.9$ 31.8$ 29.0$ 28.2$ 23.9$ 22.7$ 21.2$
Town CAFR Date 20xx (PSPRS GASB Report Measurement Date 20xx)
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21(20)20(19)19(18)19(18)18(17)17(16)16(15)15(14)14(13)13(12)
Towns Plan Assets Unfunded Liability Total pension liability
EXPENDITURES Fiscal Year
by FUNCTION 2021 2020 2019 2018
General government $ 9,557,350 $ 10,016,895 $ 10,116,904 $ 9,159,411
Public safety 9,818,166 11,148,102 17,366,356 8,883,377
Highways and streets 3,592,139 1,869,376 3,258,493 4,372,002
Capital outlay 10,377,694 3,820,224 2,619,549 3,223,563
Debt service 2,199,756 1,615,527 1,269,594 1,188,758
Total expenditures $ 35,545,105 $ 28,470,124 $ 34,630,896 $ 26,827,111
14
Expenditures
WHERE THE MONEY GOES TO…
The chart below and bar graph to the right illustrate a 10-year historyoftheTown’s expenditures for governmental operations.The pie
graph to the right displays the Town’s spending in fiscal year 2021.
General government includes services from the Town manager’s
office,Community Development,Engineering,Finance,Information Technology,Town Clerk,Town Attorney,Municipal
Court,Post Office,Facilities,Fleet Management,and Tourism.
Public safety includes police department functions of patrol,investigations,dispatch,administration,and all other services
provided by the police department.Expenditures include
personnel,purchasing and maintaining equipment,facilities,
technology and vehicles.Influx in year-to-year expenditures is
driven by payments to the Pension system (see page 11).
Highway and streets is managed by the Public Works
department.Expenditures are associated with the Town’s
maintenance program for 145 linear miles of paved asphaltstreets.The Town is divided into 15 maintenance sections,
averaging 9.4 linear miles each.Generally,surface treatment
maintenance is applied to three sections each year.All pavement
is monitored through a Pavement Conditions Index to assist staff
in determining which pavement treatment is required.
Capital outlay is the construction and purchase of capital assets
that are not part of a department’s operating budget.
Debt service are costs of paying leases and long-term bonds.
Town of Paradise Valley, AZ
Fiscal Year
2017 2016 2015 2014 2013 2012
$ 7,925,090 $ 7,794,295 $ 6,963,210 $ 6,700,704 $ 6,168,281 $ 5,581,346
13,930,804 8,972,593 7,291,649 6,215,932 6,816,444 7,594,737
2,860,702 2,786,005 3,014,861 2,635,007 2,677,491 1,204,634
3,924,735 2,737,601 8,080,876 6,522,394 2,699,004 2,149,953
1,248,731 1,470,811 1,295,790 1,215,075 1,029,362 1,029,682
$ 29,890,062 $ 23,761,305 $ 26,646,386 $ 23,289,112 $ 19,390,582 $ 17,560,352
GOVERNMENTAL OPERATIONS
15
Expenditures
Popular Annual Financial Report 2021
Expenditures spikes in
fiscal years 2017 and
2019 are mainly due
to paying the PSPRS
unfunded liability by
$5 and $9 million,
respectively.Major
programs were briefly
paused in 2020.
In 2021,governmental expenditures totaled $35,545,105 with
General government and Public safety combine for 55%.Highways
and streets,and Capital outlay accounted for 10%and 29%,respectively;and Debt service accounted for 6%.
General government, $9,557,350 , 27%
Public safety,
9,818,166 , 28%
Highways and
streets, 3,592,139 , 10%
Capital outlay,
10,377,694 , 29%
Debt service,
2,199,756 , 6%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
2021 2020 2019 2018 2017 2016 2015 2014 2013
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Governmental funds Fiscal year Change
2021 2020 $%
ASSETS
Cash and investments $ 60,335,202 $ 52,929,394 $ 7,405,808 14.0%
Current and other assets 11,688,341 16,669,676 (4,981,335)-29.9%
Capital assets, net depreciation 96,361,136 85,678,808 10,682,328 12.5%
Total assets (A)168,384,679 155,277,878 13,106,801 8.4%
Deferred outflows of resource (B)8,472,473 7,951,916 520,557 6.5%
LIABILITIES
Current liabilities 4,805,450 5,347,142 (541,692)-10.1%
Long-term liabilities 32,444,219 31,345,488 1,098,731 3.5%
Total liabilities (C)37,249,669 36,692,630 557,039 1.5%
Deferred inflows of resource (D)594,372 1,166,596 (572,224)-49.1%
NET POSITION
Investment in capital assets (1)87,154,848 79,859,462 7,295,386 9.1%
Restricted (2)2,532,566 1,310,426 1,222,140 93.3%
Unrestricted (3)49,325,697 44,200,680 5,125,017 11.6%
Total net position (A+B-C-D=1+2+3)$ 139,013,111 $ 125,370,568 $ 13,642,543 10.9%
16
Financial Statements
STATEMENT OF NET POSITION
ASSETS =Current and other assets:Assets expected to convert tocashorusewithinoneyear.Capital assets:The Town’s investment of
long term assets that are depreciated over their estimated useful life.
LIABILITIES =Current liabilities:Primarily debts that will be paid
within one year.Long-term liabilities:This represents debt and otherobligationsthatarepayableinmorethanoneyear.
Deferred outflows /inflows of resources are expense and revenues
that have been incurred /received but are not yet being recognized until
a future period.
NET POSITION =Total Net Position for 2021 was $139,013,111whichis10.9%higher than last year.The Increase in Investment in capitalassetsisadditionsincapitalassets,less depreciation of existing assets.Restricted net position represent resources set aside and designated
for a specific purpose.Unrestricted net position is the value of
available resources for the Town if no additional revenue or resourcesareobtained.
Town of Paradise Valley, AZ
Governmental funds Fiscal year Change
2021 2020 $%
REVENUE
Taxes $ 22,840,680 $ 23,603,226 $ (762,546)-3.2%
Intergovernmental 9,826,857 5,278,968 4,547,889 86.2%
Fines and forfeitures 2,143,881 1,763,211 380,670 21.6%
Licenses and permits 3,084,019 3,232,232 (148,213)-4.6%
All other 748,778 2,016,056 (1,267,278)-62.9%
Total revenues(U)38,644,215 35,893,693 2,750,522 7.7%
EXPENDITURE
General government 9,557,350 10,016,895 (459,545)-4.6%
Public safety (and reducing PSPRS liability)9,818,166 11,148,102 (1,329,936)-11.9%
Highways and streets 3,592,139 1,869,376 1,722,763 92.2%
Capital outlay 10,377,694 3,820,224 6,557,470 171.7%
Debt service 2,199,756 1,615,527 584,229 36.2%
Total expenditures(V)35,545,105 28,470,124 7,074,981 24.9%
Excess (deficiency) of revenue
over expenditure (W)=(U-V)3,099,110 7,423,569 (4,324,459)n/a
Net other financing sources (X)-8,140,000 (8,140,000) n/a
Change in fund balance(Y)=(W+X)3,099,110 15,563,569 (12,464,459)n/a
FUND BALANCE
Beginning of year, July 1 (Z)63,724,027 48,160,458 15,563,569 32.3%
End of year, June 30 (Y+Z)$ 66,823,137 $ 63,724,027 $ 3,099,110 4.9%
OPERATING STATEMENT
17
Financial Statements
REVENUE:The Town’s sources (inflow)used to pay for Town services.
EXPENDITURE:The Town’s uses of sources (outflow).
NET TRANSFERS:Sources moved from or (to)the Town’s Enterprises.
A positive number is an inflow and brackets is outflow.
CHANGE IN FUND BALANCE:Revenue–Expenditure +/-Net Transfer.
FUND BALANCE:The amount the Town carries forward to next year.
These financial statements derived from the Town’s Comprehensive
Annual Financial Report (CAFR)that is accessible via the Town’s website.
Popular Annual Financial Report 2021
GOVERNMENTAL OPERATIONS Final (Audited)(Over) / Under
Budget Actual Amount %
General government
Community development $ 1,664,086 $ 1,539,029 $ 125,057 92.5%
Engineering 830,599 764,371 66,228 92.0%
Finance 733,318 710,558 22,760 96.9%
Information technology 1,085,450 1,084,924 526 100.0%
Mayor and Council 152,120 44,916 107,204 29.5%
Municipal court 955,787 911,981 43,806 95.4%
Public works 882,159 836,034 46,125 94.8%
Tourism and promotion 1,359,005 1,359,005 -100.0%
Town attorney's office 877,023 871,810 5,213 99.4%
Town manager's office 2,721,114 1,434,722 2,286,392 52.7%
Contingency 2,662,960 -2,662,960 0.0%
Public safety
Police operations 14,456,056 9,818,166 4,637,890 67.9%
Highways and streets
Public works 3,784,233 3,592,139 192,094 94.9%
Debt service
Leases -0%
Bonds 2,208,028 2,199,756 8,272 99.6%
Capital outlay
Operating capital 3,600 0 3,600 0.00%
Capital improvement program 15,129,923 10,377,694 4,752,229 68.6%
Total expenditures $ 49,505,461 $ 35,545,105 $ 13,960,356 71.8%
18
Financial Statements
BUDGET COMPLIANCE
A department is not permitted to exceed its final Council approvedspendingauthority.Overall,the Town used 71.8%of its $49,505,461
final governmental budget.All unspent resources from 2021 are not
lost;they have been carried into the next fiscal year 2022.
The chart below demonstrates that all Town departments ended the
fiscal year within their legal spending authority limits (Budget).
Town of Paradise Valley, AZ
FIRE SERVICES
WASTEWATER
ALARM SERVICES
6,102
2,229
270
6,056
2,258
287
2021 2020
19
BUSINESS-TYPE OPERATIONS
Enterprise Operations
The Town’s “Enterprises”are considered “Proprietary funds”that use
an accounting basis similar to businesses.The Enterprises
distinguish operating from non-operating items.Operating revenueandexpensesresultfromprovidingservicesandproducingand
delivering products in connection with an Enterprise’s principal
ongoing purpose.The Town has three (3)Enterprises:
FIRE SERVICES:The Town has contracted with the City of
Phoenix to provide fire services.The Town constructed and
maintains two fire stations.Emergency medical services are
provided by a private company which leases and operates from
Town property.Service rates were designed to recover operatingcosts,but not recover fire stations construction costs.Rates are
differentiated between residential and commercial zoned property.
WASTEWATER:The Town provides wastewater services to bothresidentialandcommercialcustomerswhoareconnectedtothe
Town-owned sewer system that covers 60%of the Town’s
geographical area.The Town contracts with the City of Scottsdale
to operate and provide maintenance and treatment services to the
system.The City bills the Town for these services and the Townbillsitscustomersdirectly.Customer bills include a base rate
charge and a commodity charge which is based upon winter water
consumption.Services provided by Phoenix are directly billed to
the customers and are not included as a Town Enterprise.
ALARM SERVICES:The Town provides alarm system monitoring
services.The rate structure for both residential and commercial
customers is designed to recover the costs of providing services.
Popular Annual Financial Report 2021
NUMBER OF CUSTOMERS
Business-type funds Fiscal year
Fire services Wastewater Alarm
ASSETS
Cash and investments $ 2,783,163 $ 1,000,275 $ 508,102
Current and other assets 168,119 237,309 13,462
Capital assets, net depreciation 5,785,926 19,895,330 -
Total assets (A)8,737,208 21,132,914 521,564
LIABILITIES
Current liabilities 659,508 1,224,395 1,587
Advances from general fund -831,201 -
Total liabilities (B)659,508 2,055,596 1,587
NET POSITION
Investment in capital assets (1)5,785,926 19,895,330 -
Unrestricted (2)2,291,774 (818,012)519,977
Total net position (A-B=1+2)$ 8,077,700 $ 19,077,318 $ 519,977
Enterprises use “full accrual”basis for accounting that is virtually the same
accounting basis used by businesses.These financial statements are not
audited and are derived from the Town’s audited Comprehensive Annual
Financial Report (CAFR).The CAFR can be accessed via the Town’s website.
Enterprise Operations
20
STATEMENT OF NET POSITION
ASSETS =Current and other assets:Assets expected to convert tocashorusewithinoneyear.Capital assets:The Enterprise’sinvestmentoflongtermassetsthataredepreciatedovertheirestimated
useful lives.
LIABILITIES =Current liabilities:Primarily debts that will be paid within
one year.Due to general fund:This represents a loan from the general
fund being repaid over the course of multiple years.
NET POSITION =Investment in capital assets is the investment each
enterprise has in its capital assets.Unrestricted net position is the
value of available resources for each Enterprise if no additional revenueorresourcesareobtained.
Town of Paradise Valley, AZ
Business-type funds Fiscal yearFire services Wastewater AlarmOPERATING REVENUE
Charges for services $ 3,191,180 $ 2,586,842 $ 128,079
OPERATING EXPENSESCost of sales and services 3,188,976 2,669,431 27,120
Administrative charges 228,717 119,737 118,804
Depreciation 181,397 249,331 -
Total operating expenses 3,599,090 3,038,499 145,924
Operating income (loss)(407,910)(451,657)(17,845)
NONOPERATING REVENUE (EXPENSE)
New construction impact fee -320,423 -
Rental income 36,000 --
Investment earnings 6,565 -1,283
Total operating revenue (expense)42,565 320,423 1,283
Income (loss) before transfers (365,345)(131,234)(16,562)
Transfer in from governmental funds ---
Transfer out to governmental funds ---
Change in net position (365,345)(131,234)(16,562)
NET POSITION
Beginning of year, July 1, 2018 8,443,045 19,208,552 536,539 End of year, June 30, 2019 $ 8,077,700 $ 19,077,318 $ 519,977
OPERATING STATEMENT
21
Enterprises Operations
OPERATING REVENUE:Income from providing services to customers.
OPERATING EXPENSES:Costs associated with providing services.
NONOPERATING REVENUE (EXPENSE):Revenue and costs not
directly associated with providing services to customers.
NET TRANSFERS:Amount transferred “from”or “to”the Town’s
governmental funds.
CHANGE IN NET POSITION:Revenues –Expenditures.
NET POSITION:The residual of all elements presented in the financial
statements.
Popular Annual Financial Report 2021
U.S. Treasuries
24%$13.7 U.S. Agencies9%$5.3
Corporate Bonds10%$5.5
Money Markets
40%
$23.3
State Treasurer's Pool17%$10.1
Fair Value at Fiscal Year End
Investment type 2021 2020 2019 2018
U.S. Treasuries $ 13,756,090 $ 13,997,900 $ 13,315,322 $ 6,720,095
U.S. Agencies 5,380,597 3,537,285 2,611,977 6,385,866
Corporate Bonds 5,520,824 7,026,059 7,638,794 9,022,387
Commercial paper ----
Money Markets 23,303,988 28,730,123 11,010,872 1,440,431
Supra-National Agencies ---567,497
State Treasurer's Pool 10,108,594 10,096,709 7,451,119 16,215,062
Total Investments $ 58,070,093 $ 42,028,084 $ 42,028,084 $ 40,351,338
Cash in bank / trustee 10,543,134 10,481,644 11,549,124 6,821,805
Restricted cash (4,976,299)(5,386,381)(5,473,155)(6,885,134)
Cash & Investments $ 63,636,928 $ 47,123,347 $ 48,104,053 $ 40,288,009
22
Cash and Investments
POLICY AND OBJECTIVES
The Town’s investment policies are based on Arizona state law andprudentgovernmentalmanagementofpublicmoney.The primary
objectives of the Town’s investment policy are:
Compliance:Only invest as allowed under law;
Security:Preserve and protect public funds;
Liquidity:Access to cash as needed;while maintaining:
Diversification:Mitigate market risks;and then,
Yield:Market value return of investment.
The pie chart to
the right shows
investments for
2021 and the
table below hasaneight-year
history,by
investment type
at fiscal year
end.
Town of Paradise Valley, AZ
Governmental Funds
Fiscal Investment
Year Earnings
2021 122,749
2020 1,313,248
2019 1,330,269
2018 250,226
2017 185,141
2016 274,390
2015 91,159
2014 94,521
2013 174,833
2012 161,897
Fair Value at Fiscal Year End
2017 2016 2015 2014
$ 2,454,377 10,483,503 --
13,180,689 12,140,405 -$ 1,003,822
5,532,987 ---
895,631 ---
5,556,132 5,609,698 --
577,105 ---
6,024,395 $ 3,985,048 $ 20,454,326 13,435,115
$ 34,221,316 $ 32,218,654 $ 20,454,326 $ 14,438,937
11,932,184 11,979,771 19,822,758 17,991,742
(6,883,581)(1,492,602)(621,571)(149,577)
$ 39,269,919 $ 42,705,823 $ 39,655,513 $ 32,281,102
Investment Maturity
Investment type Fair Value 0-6 months 6-12 months 1-2 years
U.S. Treasuries $ 13,756,090 -$ 2,128,618 $ 11,627,472
U.S. Agencies 5,380,597 --5,380,597
Corporate Bonds 5,520,824 -427,559 5,093,265
Money Markets 23,303,988 $ 23,303,988 --
State Treasurer's Pool 10,108,594 10,108,594 --
Total Investments $ 58,070,093 $ 33,412,582 $ 2,556,177 $ 22,101,334
COMPOSITION OF INVESTMENTS AND EARNINGS
23
Cash and Investments
The graph below shows investments by maturities at June 30,2021
and the chart below-right lists earning for the last ten years.
Popular Annual Financial Report 2021
U.S. TREASURIES
U.S. AGENCIES
CORPORATE BONDS
MONEY MARKETS
STATE TREASURER'S POOL
$23,303,988
10,108,594
$11,627,472
5,380,597
5,093,265
-
-
0-6 months 6-12 months 1-2 years
24
Capital Financing
EXCISE TAX REVENUE OBLIGATIONS, SERIES 2016
In 2016,the Town issued $7,880,000 in excise tax revenue obligation
debt This was for the construction of the public safety tower,specific
street improvements,and other identified projects.
In 2019,all projects were completed with the majority of the projects
finishing significantly under budget by an aggregate of $1.3 million.
This amount was transferred to the trustee for future bond payments
In 2020,the Town issued $8,140,000 in excise tax revenue obligation
debt via a placement loan with an interest rate of 1.09%payable
semi-annually.This was primarily to hedge timing of reimbursements
per a development agreement where the Town pays for specificcapitalimprovementsandtheninvoicesforreimbursement.
As reimbursements occurs the proceeds can be used for the Town’sCapitalImprovementPlanorfuturebondpayments
EXCISE TAX REVENUE OBLIGATIONS, SERIES 2020
These pledged revenue structures are not subject to statutory debt
limitations;and the use and repayment of the proceeds are excluded
from the State’s mandated expenditure limitation.
Below is the remaining payments for the excise tax revenue
obligations,series 2016 and series 2020 at June 30,2021.
Town of Paradise Valley, AZ
FY Ending June 30 Principal Interest Payment
2022 2,730,000 139,008 2,869,008
2023 2,785,000 100,456 2,885,456
2024 2,820,000 61,251 2,881,251
2025 1,375,000 34,035 1,409,035
2026 1,390,000 19,021 1,409,021
2027 700,000 3,815 703,815
Balance 11,800,000$ 357,586$ 12,157,586$
Combined Payment Schedule for Series 2016 and Series 2020
Capital Assets, by Value at Fiscal Year End (in millions)
Classification type 2021 2020 2019 2018 2017
Land $ 45.7 $ 45.7 $ 45.1 $ 45.2 $ 45.0
Buildings 8.3 8.8 8.6 9.2 7.4
Construction in Progress 14.7 5.0 2.5 2.2 4.4
Machinery and Vehicles 2.9 3.4 4.1 4.6 2.9
Sewer System 5.5 5.8 6.0 6.3 6.5
Sewer Capacity Rights 14.3 14.3 14.3 14.3 14.3
Infrastructure 30.5 28.7 28.2 28.4 29.2
Total Capital Assets $ 121.9 $ 111.7 $ 108.8 $ 110.2 $ 109.7
25
COMPOSITION OF CAPITAL ASSETS
Capital assets are assets with an initial cost in excess of $5,000 and
has an estimated useful life of more than one year.Depreciation is
allocated to the asset each year over its estimated useful life,reducing its value.Estimated useful lives for depreciation are:
Land Not depreciated
Sewer capacity rights Not depreciated
Land and building improvements 25 years
Infrastructure and sewer lines 50 years
Machinery,equipment and vehicles 3 to 20 years
The graph below shows capital assets for 2021 and the chart below
has a five-year history,by asset classification type (in millions).
Capital Assets
Popular Annual Financial Report 2021
$45.7
$8.3$14.7$2.9$5.5
$14.3
$30.5 Land
Buildings
Construction in Progress
Machinery and Vehicles
Sewer System
Sewer Capacity Rights
Infrastructure
26
Other Information
www.paradisevalleyaz.gov
The General Plan is the primary tool for guiding
the future of the town in its efforts to enhance a
livable and sustainable environment that is
sensitive to issues which impact the people who
live,learn,work and play in Paradise Valley.
On March 13,2012,Paradise Valley voters
approved the General Plan with 80%of the vote.
The Stormwater drainage design manual
provides guidance for complying with specific
federal,state,county and town regulations
applicable to floodplain management,water quality,and stormwater management.
It presents guidance for preparing drainage andgradingplansusingthedesignstandardsadopted
by Town,County,State,and Federal Governments.
The Town Council meets on the
second and fourth Thursdays of
each month,except for November
and December when they meet on
the first and third Thursdays.All
meetings are streamed live.
Achieves,agendas and minutes are
available on the Town's website.
The Town Reporter is a periodic newsletter that is
sent to every resident of the Town.
The Town Reporter is composed of recent
information and happenings within the Town.
The Town Reporter has been published by theTowneveryyearsince1961.
Town of Paradise Valley, AZ
TRANSPARENCY IN FINANCIAL REPORTING
27
Financial Documents
The Town’s Comprehensive Annual Financial
Reports (CAFRs)are audited and are comprised ofmorethan130pagesofdetailedfinancial
statements,note disclosures,supplemental
schedules and statistical tables.
Since 2009,the Town’s CAFRs have received the
Governmental Finance Officer Association’s (GFOA)
“Certificate for Excellence in Financial Reporting”.
Popular Annual Financial Report 2021
The Budget Documents are adopted annually and
serves a role as a Policy document,Financial plan,
Operations guide and Communication medium.Thebudgetdocumentsrepresentaneffortbytheentire
organization to provide transparency in the Town’s
operations and financial plans.
The GFOA “Distinguished Budget Award”has been
received by the Town for four (4)years.
The Town’s Popular Annual Financial Report is
derived from the CAFR and designed to be a reader
friendly financial report that we trust you will findtransparent,relevant,and hopefully interesting.
This PAFR is not comprehensive like the CAFR.
But…the PAFR is easier to read!
The Town has received three(3)GFOA “PAFR award”
with the first received for the 2017-18 PAFR.
The Expenditure Limitation Report (ELR)and the Highway UserRevenueFund(HURF)compliance letter are two reports required
by Arizona law.The ELR reports on the Town’s standing on theState’s mandated Expenditure limitation.The HURF letter validates
the Town’s compliance with Arizona’s regulations for the expending of
HURF funding.
Both reports are examined by an independent auditing firm that
issues an opinion on the Town’s representations in these reports.
RevenuePage 8
IntroductionPage 3
Financial StatementsPage 16
Enterprise Operations Page 19
CapitalFinancingPage 24
CapitalAssetsPage 25
Cash and InvestmentsPage 22
Other Documents Page 26
Staffing and PensionPage 12
ExpendituresPage 14
Providing high quality public service to a community
which values limited government;making every effort
to enhance the community’s unique character for its
residents and people from around the world.
ELECTED OFFICIALS
Mayor: Jerry Bien-Willner
Vice Mayor: Mark Stanton
Councilmembers:
Paul Dembow
Scott Moore
Julie Pace
Anna Thomasson
Ellen Andeen
COUNCIL APPOINTED
Town Manager: Jill Keimach
Town Attorney: Andrew McGuire
Presiding Judge: J. Tyrrell Taber
PRINCIPAL STAFF
Chief of Police: Peter Wingert
Public Works Director: Brent Skoglund
Town Engineer: Paul Mood
Community Development Director: Lisa Collins
Municipal Court Director: Jeanette Wiesenhofer
Interim Chief Financial Officer: Michael Carbone
Interim Chief Information Officer: James Bailey
Human Resources: Jinnett Hancock
Town Clerk: Duncan Miller
MISSION & VISION STATEMENTS
LEADERSHIP