Prescott eNews  |   Chino Valley eNews  |    Prescott Valley eNews    |   eNewsAZ |   ArizonaPod.News

Opinion: Learn the Truth and Vote Yes on Prop 443
Featured

21 August 2017   Councilwoman Billie Orr

Councilwoman Billie Orr writes an open letter to Prescott.

I am beyond disappointed with Representative Campbell and Representative Stringer. Recently on the radio, they publicly criticized the Prescott City Council and continued to promote allegations about "hidden money" within the city's Reserve Funds.  These accusations have been addressed by Lynne LaMaster in her well-researched and documented article which I have linked to below.

Since January, the City Council has discussed the Reserve Accounts many times in Strategic Planning meetings, Budget meetings, Study Sessions as well as Voting meetings. The idea that these Reserve Accounts are "secret" is untrue, and they know it. With almost every vote that involves money, the Council discusses which account the money is coming from, i.e. Bed Tax, Street Tax, Water, Sewer, Wastewater, Solid Waste, or General Fund. It is always noted on the agenda item from which account monies are being taken, because the use of these funds is governed by law. These meetings are open to the public, televised and archived for all to view. The financial documents and budgets are all online on the city's website. The city's business is completely transparent. 

By Arizona law, the only Reserve Account the city can use to pay down the PSPRS Unfunded Liability is the General Fund Reserve Account. We have $32M in that reserve fund but only $16M is available to use toward paying down the unfunded liability. It has taken the city about 25 years to build up that fund, and it is often referred as the Rainy Day Fund. Once it is gone, it is gone. It will take many years to build the fund back up again. 

Two other reserve funds get their revenue from a dedicated tax (bed tax & street tax), and it is illegal to use those funds. The remaining reserve funds (water, sewer, wastewater, solid waste) are restricted for infrastructure projects. Those revenues are generated by fees and bills paid by Prescott residents and utility rate-payers. Some have suggested we should "borrow" from those funds to pay the unfunded liability. I believe that is risky public policy. Borrowing from the utility reserves has its own set of legal problems that would need to be carefully dealt with. Otherwise, the borrowing could convert the utility fees into taxes which would be illegal under state law and the city charter. Do you want your water bill or sewer bill to pay for the PSPRS unfunded pension liability? How would the city fund infrastructure if money were taken from these utility reserve funds? And what source of revenue would the city use to pay back the money borrowed? Would the city need to raise utility rates to cover what was borrowed? Our utility rates are already high! This is a shell game, and the entire burden would be on the shoulders of Prescott citizens and utility rate-payers. There is a better way!

When it passes, Proposition 443 will create 3/4 of a penny sales tax which will be paid by everyone including the thousands of tourists and non-residents who live in the county, Prescott Valley and Chino Valley. This is the most fair way to take care of this obligation, because those visitors also use our streets, trails, parks, ball fields, library and Police & Fire services. We know for a fact that over 60% of our sales tax revenue is generated by folks outside the city (45% tourists, 16% non-residents). The 3/4 of a penny tax will sunset in 10 years or sooner when we get the PSPRS Unfunded Liability to $1.5M or less. We believe we can do this in 6 to 8 years.

Furthermore, in FY18, the Council has budgeted to pay over $25M to PSPRS, if Prop 443 passes. That is: 

  • $1.3M  for Standard Payment from General Fund
  • $6.5 Annual Required Contribution from General Fund
  • $6M from Prop 443 revenue for six months of FY18, and
  • $12M from the General Fund Reserve

Please read Lynne's article and study the charts.

http://www.prescottenews.com/index.php/news/current-news/item/30525-is-the-city-of-prescott-really-rolling-in-hoarded-cash

We are down to the wire and need Prop 443 to pass. Please vote Yes 443. Time to stop kicking this can down the road.

If you have any questions, feel free to email me @ billieorr@aol.com

You have always been great supporters and I value your trust and take my responsibility very seriously. I would never lie or intentionally mislead you in any way. 

Councilwoman Billie Orr