Inflation, Availability, Uncertainty Haunt Town's 2023 TMRB Public Works Budget

"Challenging"
“If I could summarize this past year in one word, that word would be ‘challenging’”.  Paul Keesler, Oro Valley Director of Public Works noted this in his remarks to the Town Council at last week’s 2023 Town Manager Recommended Budget ("TMRB') Study Session.

Inflation, lack of supply, and lack of contractor availability cloud future

“Over this past year we were able to operate and move forward in this continuing inflationary, lack of supply, lack a contractor atmosphere. It’s no mystery. We’ve been talking about this for a while now: Supply chain issues and material availability… [lack of ] contractor availability: That's another battle that we've been fighting… many times we're only getting one bid and sometimes that it's not even in earnest."

2022: We've done a lot in a very difficult market. 

Keesler pointed to a number of accomplishments this year. “The biggie that Oro Valley is known for is that we're able to keep our street condition in its usual great shape… we treated approximately one-fifth of our streets this past year, which is per our schedule. Every street gets retreated depending on his condition roughly every 5 to 7 years so we we shoot for that roughly 20% every year.” Keesler noted this may not be the case going forward because of a shortage of one of the materials used in pavement preservation.

The town has also faced the inability to get replacement vehicles, whether they be for public works projects or police department vehicles. Keesler sees no end to this particular challenge for at least two more years.

Town is plunging forward with an aggressive fifty-project program for 2023
The TMRB for public works this year is $20.9million dollars. That is just for "normal" public works projects like road building and maintenance, building maintenance, and purchasing and maintaining vehicles.

Major "normal" public works projects planned for this year include rebuilding a portion of Shannon Road. This represents a shift in road funding because it is a replacement of an aging road. The town will be paying for this rebuilding from its own funds as opposed to getting funds from other governments sources as they have in the past.

One of the challenges Keesler noted was the need to do “cosmetic work” on the town’s bridges. This will not happen this year because the bid price for doing this was patently ridiculous. What should cost $400,000 was bid at $2 million.

...that includes managing the capital spending of some other departments

The Public Works Department also administers the capital spending of some other departments. This includes the capital spending on the town's parks that is included int he Parks and Recreation Department budget. The Parks and Recreation Department pays for the parks. But it's Keesler's department that actually gets the parks built!

This year this includes building some portion of Naranja Park, replacing the irrigation on one of the golf courses, and building additional multi-use paths. All of these three items are being paid for by the Towns $25million Parks Bond that was issued last September.

But there’s more. The town is replacing the tennis courts at the Community Center. That is another Parks and Recreation project. These courts require concrete. Keesler observed that contractors can only buy a specific amount of concrete. In order for there to be enough concrete for the town's project, the contractor has to use material from other projects on the Oro Valley tennis courts.

Keesler: A reorganize focus for 2023

Keesler has fifty projects on tap for the year and he has reorganized the department to get the job done. He has assigned projects to four individuals who will be the project managers. There is one full-time project manager for Naranja Park. The other project managers will have four or perhaps five projects they will oversee.

Clearly, it will be a challenging 2023 for the Oro Valley Public Works Department.

- - -

The Watchdog Report: Methods for financing the Community Center keep changing

 

A recent political ad
In a political ad in a recent publication, Mayor Winfield states: “The Town’s two golf courses are now projected to require no Town tax subsidy for operations in 2021/2022 fiscal year.”

However, the most recent financial report covers the current fiscal year through February, which is 66% of the way through the year. The statement shows that the contracted expenses overshadowed the revenues by $1,079,143. Mr. Mayor this is a loss. The fiscal year ends on June 30, 2022. The Town closed the Pusch Ridge and Conquistador courses in May so that should limit the losses, BUT the golf courses will still see a loss and will require the tax subsidy.

NOTE: LOVE reached out to Mayor Winfield who informed us that the Town updated the golf subsidy projection after he submitted his political ad, and that, “The most recent golf subsidy projection for this fiscal year is now $78,000.”

The Golf Courses: How does FY 2022/23 look?
Page 7 of the Town Manager’s Recommended Budget shows that the 2023 Community Center Fund (CCF) budget is forecasted to lose over $2.1 million. The Council borrowed/bonded for $25 million, half of which is to go to the Community Center. This bond has indebted the Town for 20 years for over $2 million/year.

The Town’s two golf courses are going to cost us over $8 million for irrigation improvements, $276,000 for cart path improvements, $105,000 for bunker and turf reduction, and $159,000 for golf maintenance equipment replacement all in FY 2022/23.

If the tax subsidy is no longer required, just where is all this money going to come from?

Answer: The Capital Fund is picking up the slack
The mayor tells us that the money is coming from the Capital Fund. However, the CCF was set up to support all the needs of the community center (golf/tennis/fitness/Overlook restaurant, recreation). Because there is not enough money in the CCF to support these needs, the money is now coming from a different fund.

NOTE: The mayor provided the following information to LOVE regarding the $8 million in golf irrigation improvements that will be taken from the Capital Fund rather than the Community Center Fund:

FY 2022/23
Golf Course Irrigation (Conquistador Course) - $4,630,000
Golf Course Irrigation (La Canada Course) - $2,350,000

FY 2023/24
Golf Course Irrigation (La Canada Course) - $2,000,000

The Bottom Line
The half-cent sales tax subsidy ($2 million annually), the HOA subsidies ($125,000 annually), and the $25 million bond are not enough, so additional money is needed which is now coming out of the Capital Fund.

- - -
Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.

Chief Riley: TMRB Has Everything We Need

Request of $19. 1 million is "everything I asked for"

“Mr. Mayor and Council. Thank you for allowing me the opportunity to proudly present to you the Police Department's 2023 budget recommendations.” Thus began the remarks of Chief Kara Riley at last week’s 2023 Town Manager Recommended Budget study session. 

The budget request is $19.1 million [Panel below-right] for the Police Department. The request includes funding for every item that Chief Riley requested. In response to a question asked by Council Member Solomon, Chief stated that "I got everything I asked for."

Bottom-up budget involves "rank and file" and more

Riley built the budget request involving many of the personnel in the department. “Back in November 2021, we begin the process and discussion of what … police department men and women think we need in order to continue to be the best police agency in Arizona.” That means keeping Oro Valley the safest city in Arizona.

Requests adds two police officers.. frees up another for field work... focusses on recruiting

One of the key focal points of the budget is adding four positions: Two police officers, a dispatcher, and a civilian public information officer (PIO).  Staffing the PIO position releases an officer who is the current PIO for patrol work.

The goal of the PIO position “is to really focus on marketing and recruiting with diversity; so we want to make sure that we continue to have the best person to tell our story as a profession… We are focusing on marketing and campaigning to hire more police officers and get people in the door sooner” by working to increase interest in the profession.

Having the ability to recruit and develop officers is going to increase in importance. Some officers on the force are moving toward retirement. Future leaders need to be ready to assume new roles. Recruits will be needed to fill patrol openings. 

Inflation and availability play a major role in the budget. 

For example, there is a large increase in the cost of outfitting and operating vehicles. “Our biggest expense is vehicles. Right now we are starting to see the cost of the equipment for the vehicles go from $50,000 almost up to $70,000.” Availability is also an issue. “I have vehicles sitting right now that are not being outfitted because we can't get the stuff.” Other cost increase include the cost of gasoline cost.

Technology use increasing... drives up cost... but improves quality

The Oro Valley Police Department has been implementing technology to improve policing. "Every time we go to a crime scene there is technology involved. We must be able to gather information that is evidence. It is an expensive process of software that we have to be able to have in order to be the voice of victims.”

Chief Riley thanks the community

Chief Riley thanked the community for it's commitment to law enforcement [see panel above-left]. She also thanked her team.

Chief Riley thanks her colleagues on the Police Force

"Men and women in the law enforcement profession still come to work they serve every day through the structures of this job, through the pandemic and all the other calls for service that they may take. For that, I want you to know how grateful I am for the men and women of this agency. I want to publicly recognize all of them for their hard work and dedication to this community. I'm humbled and grateful and honored to be their Police Chief."

Bits and Pieces

Friends celebrate successful Pusch Ridge Golf season

The group “Friends of Pusch Ridge Golf” celebrated the end of a very successful season with and event last week.  “Our morning shotgun sold out overnight with 52 players.” You can read more about that event here. 

According to their news release, there also were 14,000 rounds played at the course in six months, far more than planned.  Three weekly leagues were wildly successful. 

The course reopens for operation in the fall.

Community Center will accept "Renew Active" memberships beginning June 1
“Beginning June 1, the Community & Recreation Center will begin offering Renew Active, which is a Medicare fitness program similar to Silver Sneakers. UnitedHealthCare members over the age of 65 qualify for this program and would be given a classic membership at the CRC. For those of you that are existing members that would like to change over, please plan accordingly as this date approaches. Prorated refunds will not be issued on month-to-month memberships, but will be offered for six month and annual memberships. To check your eligibility and retrieve a participation code, click here. To successfully set up your Renew Active membership, we will need a nine digit code beginning in A, B or S." (Source: Oro Valley Parks and Recreation weekly email).

 

Some Relief... But No Solution To The CAP Water Problem

Cesare: We're working diligently to address the problem

Yesterday, we wrote about the dreadful Colorado River Basin situation and its importance to the town of Oro Valley. What we did not report is what’s being done to “work the problem.” 

We communicated with Karen Cesare, CAWCD Board Member Representing Pima County. Cesare updated the Oro Valley town Council last November on Water. 

Cesare wrote to us: “You’re right in that things within the Colorado River Basin are still getting worse not better - and what I want people to know is that everyone involved, in Arizona, the Lower Basin States and the Upper Basin States, along with the Bureau of Reclamation, is working diligently and cooperatively to address rapidly changing scenarios in real time. The recent Drought Response Operations Plan (aka DROA) is an example of this cooperation.”

Some relief to Lake Powell

In April, the representatives of the seven states that use CAP water sent a letter to US Department of Interior Assistant Secretary Trujillo. The letter is “legalese” in its structure. Essentially, the letter confirms the commitment of the seven states to work cooperatively during this crisis. 

The letter also confirms that the bureau will release 500,000 acre-feet of water from one of the reservoirs that fees Lake Powell. This measures come on top of emergency releases last year from Flaming Gorge and two other upstream reservoirs, totaling 161,000 acre-feet. Will allow the electric turbines that Glen Canyon Dam to continue to operate.

Pray for an end to the drought

All of these efforts continue. Of course, there is the hope that the drought will end soon and normalcy will be restored. There's also the prediction for another active monsoon season here in Arizona. Unfortunately, much of that "runs off" but let's capture as much as we can!

Opinion: Time for Town of Oro Valley to budget to reduce outdoor drinking water use in it's facilities and more by converting use to reclaimed water

All of this points to the need for the Town of Oro Valley to step up and take action regarding its wasting drinking water on two outdoor facilities: Pusch Ridge Golf Course and Kreigh Park. We're not talking about closing them. We're talking about using reclaimed water instead. 

And, while the town is at it, why not negotiate with well-water users, like the Oro Valley Country Club, to get them into the town's reclaimed water system. It's in the same area.  As is CDO high school and Pusch Ridge Christian Academy. All use drinking water. 

- - -

CAP Water Crisis Worsens... Efforts Underway To Further Reduce Use

All data points point down

We wish we could present a more encouraging report on what's happening with CAP water. But we can't; certainly not after listening to Tom Buschazke, Director of the the Arizona Department of Water Resources (ADWR) at last week's briefing. "All the trending of the data points to a need for us to take serious action."

What happens to CAP water matters to Oro Valley because the town uses it to replenish the groundwater supply. This replenishment makes Oro Valley's water supply sustainable. 

Lake Powell at historically low levels

There are two Colorado River Basin reservoirs. Both are now at historically low water levels. One is Lake Powell. It is on the Arizona/Utah border. Water from Lake Powell feeds the second reservoir, Lake Mead. 

Lake Powell is at its lowest level since it was filled. This fall, it is possible that the system will rely on an untested alternative method of delivering water downstream to Lake Mead. The water level in Lake Powell will be so low that there won't be enough water to flow over the dam. Even if that alternative method is successful, it is likely that it will lack the capacity to meet water inflow needs of Lake Mead.

Therefore... Lake Mead, the source of CAP water, is at historical low levels... more action needed

The news on Lake Mead was equally discouraging. Lake Mead sits at 31% of total capacity. In fact, it is so low that barrels and dead bodies being discovered in the dry lake bed. The expectation is that further significant actions are going to be needed to reduce water use. Large reductions in use could be required in the by 2024. We will feel it here in Oro Valley. Lake Mead’s projected water level possibly will trigger a Level 2 shortage by year end.

A four-fold problem

The problem is a combination of a 22 year historic drought (“We’re being piled on by mother nature”), over allocation of water among the states that draw from Lake Mead, extensive growth in population, and user conservation that simply is not sufficient to make up the a huge difference between demand and supply.

Statewide, Arizona trying to make a "dent" in CAP water consumption

ADWR contends that statewide CAP water consumption will be reduced by almost 812,000 acre-feet this year. This is the result of a several actions. One is the Tier 1 reductions in usage. This took water allocated to farming. Another is a State program ("500 + Plan") for voluntary consumption reduction. Part of this plan has had cities in the Phoenix area reduce consumption by 35,000 acre feet. 

"Significant action needed to avoid a crisis"
Even with all of these efforts, Lake Mead was projected to decrease in elevation by 23 feet as of the end of this year. [panel above left] That is significant.”Even with the actions being taken in the lower basin, the result is a significant difference between supply and demand. These numbers might be relatively alarming to some…. but it is merely to point out that we need to take significant action moving forward to avoid a crisis.” Fortunately, there is no imminent threat to water inside our homes, according to ADWR Director Buschazke. 

- - - 

Note: Both Lake Powell (Glen Canyon Dam) and Lake Mead (Hoover Dam) have hydroelectric power plants. The operation of both of these power plants is threatened by the low water levels. "The hydroelectric power generated by the [Hoover] dam is allocated between the states of Nevada, Arizona, ten cities in Southern California, the Metropolitan Water District of Southern California and Southern California Edison Company. The latter two and the city of Los Angeles account for nearly half of the electric power received."(Source)

LPO Nate Vera... "2021 Officer of the Year"

Oro Valley Lead Police Officer (LPO) Nate Vera has been selected as at the town's "2021 Officer of the Year."

Lead Police Officer Nate Vera joined the Oro Valley Police Department in 2017. He previously worked as a police officer with the Tucson Police Department. Additionally, he worked as a Crime Scene Technician for a year before becoming a sworn officer. 

The extent of knowledge and experience he has gained during his career is impressive

LPO Vera has routinely demonstrated this by example. OVPD is a grateful recipient of his contributions. Such contributions i  include growth and development, commitment to service, and enhanced leadership.

From a development and growth perspective, LPO Vera is actively involved and committed to the department’s field training program. His ability to effectively develop less tenured officers is excellent and enhances the likelihood of achieving the desired level of success and maintaining quality police officers as they continue their careers. LPO Vera’s contribution to development does not end at the field

training level. He contributes to the success of the entire organization at so many levels and in many different categories. His contributions in the year of 2021 alone include his routine volunteering for programs throughout the agency, community, and other law enforcement partners. Additionally, LPO Vera received a Life Saving Award in early 2021, wherein he was directly involved in saving the life of a juvenile community member who made a full recovery because of LPO Vera’s actions. These are only some examples of LPO Vera’s proven commitment to service and passion to facilitate growth and development.

LPO Vera has a keen ability to retain information and impart the knowledge and training he received. His knowledge and experience are sought after on a regular basis and his sound decision making and problem-solving capabilities are supportive of this. LPO Vera is a complete employee and a model police officer.

LPO Vera serves in a unique role within the organization. In the absence of the sergeant, he is the formal leader of the squad. During 2021, he was in this position for four months. During this time, he demonstrated leadership that is generally seen from those with much more experience and exposure in a position of leadership. He was tasked with several duties that are not typically a part of his job description. His work product exceeds expectations. Additionally, LPO Vera attended and completed the Basic Leadership Academy that was hosted by Arizona POST. This will only serve to sharpen his already present and effective leadership skills. LPO Vera aspires to be a leader within our organization and has proven to be one in a short time.

It is for these reasons that LPO Vera is set apart from others. He is a clear positive outlier at OVPD. He should be recognized for the asset to the organization that he is. LPO Vera's 2021 performance evaluation supports this documentation with a rating of Outstanding. For these reasons, LPO Vera was selected for the 2021 Officer of the Year Award.

- - -