Tuesday, February 18, 2020

Oro Valley's Public Safety Pensions Funded at 61% Plus Level

About the same as last year
The Town of Oro Valley has funded approximately 61% of its future payout from the public safety pension fund ("PSPRS"). This valuation is as of June 2019, the latest valuation date per the State.

The PSPRS is managed by the State of Arizona. The State pays the pension to Oro Valley's police officers. Each member entity, like a town, is required to contribute to the fund. The contribution is determined based on town's enrolled employees. The fund has 228 member entities.

Oro Valley's  61% 2019 funding level is about the same as the 59.9% level last year. It is also before consideration of the town's added payment last June of $500,000. So, the actual funded level is a bit better than 61%. Last year, Oro Valley's pension funding level was above the average among members. (See chart here). We suspect that that will remain the same.

The underfunding is about $25 million
"The current Town Policy established a funding ratio goal of 100% by June 30, 2036. The Council identified the following actions to achieve the 100% funding ratio:
  • Maintain Annual Required Contribution payments from operating revenues. 
  • Retain 20-year amortization period. Review Local board practices annually. 
  • Apply adopted financial policies dedicating surplus funds at year-end toward reducing the unfunded liability. 
  • Budget an additional payment toward the unfunded liability. For FY 19/20, $500,000 was appropriated in the budget." (Source)
No town can ever assure itself that it will fully fund its PSPRS liability
Determining the exact amount of the PSPRS funding  liability is tricky. It involves many assumptions. These assumptions are "mixed together" by actuarial accountants to determine the underfunding.  So, the funded ratio is a "moving target."

Underfunding presents no problem to the officer
There is no scenario that we can envision in which the State will not pay a pension to an officer, even if their town member has underfunded the pension. Non payment is not going to ever happen.

There is no danger to a town as long as it pays is minimum required contribution. Oro Valley's goal of a 20 year period to make up the underfunding is aggressive. The State statute allows for a selection of a catchup-period of 25 or 30 years. 

Future should be brighter
Many of the 140 Oro Valley police officers covered by the plan are still active. 43 of these are currently drawing from the plan. An additional 8 will be retiring within the next 5 years. Their replacements will not be on the same defined benefits plan. 

Defined benefit plans like those once offered by PSPRS are no longer offered. Officers hired after July 1, 2018, participate in a retirement plan that requires their own contribution to their retirement, supplementing the town's contribution (Tier 3) This aligns with best practices in retirement funding. 

Friday, February 14, 2020

Bits and Pieces

Significant increase in traffic on La Canada
This is one of the unintended consequences of rebuilding La Cholla Blvd. The traffic during busy times is heavy southbound in the morning and northbound in the afternoon. This is because of the closing of LaCholla from Lambert Lane to Hardy.  Leave yourself extra time.

The rebuilding of LaCholla will be completed this summer. It is Oro Valley's last major corridor to be built.

LOVE celebrates 13 years of continuous publishing
We forgot to mention it last week. LOVE went live on February 5, 2007.  We have published continuously ever since. That's about 3,200 posts and about 1 million views. A pretty nice accomplishment for 2 people who just want to make Oro Valley a great place to live.

Our first posting was about how the residents of our community got "hoodwinked" into voting to give $23.5 million in sales tax revenues to developer Vestar to build the Oro Valley Marketplace. We were promised an upscale shopping experience and we got a Walmart and a movie theatre. We thought that it was wrong for the town to give away sales tax revenues. The State Supreme Court agreed. Such tax giveaways are not allowed anymore.

Over the years, there have been many people involved in publishing LOVE. Some you know. Some you don't. We want to thank them for all they have done and for all they do for LOVE and for Oro Valley.

Source: Explorer, 2/12/20, p 4
"Bits and Pieces" copied by Explorer
One of our readers informed us that the Explorer, a local advertiser "newspaper", used the title of this column to post a column of its own called "Bits and Pieces." This appeared in their February 12 edition.

"Imitation is the sincerest form of flattery."

And we are flattered!

The Explorer is certainly free to post a column like our "Bits and Pieces". We would hope that they come up with their own title for it. In fact, we even have some ideas for them.

Happy Valentines Day
Today is Valentine's Day.

 "The holiday has origins in the Roman festival of Lupercalia, held in mid-February. The festival, which celebrated the coming of spring, included fertility rites and the pairing off of women with men by lottery. At the end of the 5th century, Pope Gelasius I replaced Lupercalia with St. Valentine’s Day. It came to be celebrated as a day of romance from about the 14th century." (Source)

We always thought it was a day created by the candy and gift card makers to sell stuff in the offseason. ( :-) )

We're not right on that. But we do think that our explanation makes sense.

Enjoy the day!

Wednesday, February 12, 2020

Get To Know Chief Riley: "I Love This Community"

Last week we published some background information about Oro Valley's new police chief, Kara Riley. This week we focus on her relationship with our community, her reaction to becoming Chief, and her primary focus. 
Chief Riley Loves Oro Valley
Kara Riley has lived in Oro Valley for 18 years. She's grown to love our community, not just in her capacity as a member of our police force, but as a mom and every day resident. We asked her why she wanted the job of chief.

"It came down to two things: The love of this community because I’ve been ingrained in it for so long. I love every aspect of it-the schools, the churches, a great community where people waive at us. And the fact that I have had 16 years of working with the finest men and women, both civilian and sworn, in the law enforcement profession in the nation. It’s all about the people."

Riley told us she was humbled when she learned that she had been selected as the third police chief in Oro Valley's history.  She feels humbled to represent our sworn officers.

"I wish you knew what I knew in reference to the men and women of this agency. If you knew them, you would be humbled too because they are the best."

"I hear them every day. I wear a uniform. I have my radio on. I have a marked unit. I check on every morning like they do. I do traffic stops. I do sometimes go to calls with them. I hear them. I hear their efforts. They work hard. They do that extra check when it comes to public service. We continue to provide a service that meets the community’s expectations and then some."

Community service and outreach is #1
Chief Riley believes that the police force exists to provide outstanding community service; Even if that means picking up a garbage can for someone who can't! To her that means the officers are going the extra mile. “There is never a complaint" on the part of the officer, she related.  “They love this community. They have a sense of ownership. Pride.”

Riley wants the residents of our community to be comfortable with our police officers. “It’s why we do all of our community outreach. We want people to be comfortable with us...I think it’s important for people to not have surprises.” She wants people to call the police even if it's something that they feel is small. As she put it: "..if they’re comfortable with us in the beginning already, then they are not going to hesitate to call us when something really bad is going on.”
Next week we will discuss Riley's three core focus areas as she begins her new job.

Tuesday, February 11, 2020

Highlights From Town Manager Jacobs' February Report

Town Manager Mary Jacobs presents a monthly report to council. The following are some items we felt particularly interesting from the recently released February report. You can find all of the town manager's monthly reports here.
Teen Maze 
"On January 10, OVPD SROs, in conjunction with Arizona Youth Partnership and the Canyon Del Oro Parent Organization, hosted Teen Maze. Teen Maze educated 366 Canyon Del Oro High School sophomores on the dangers of alcohol, marijuana and prescription drugs."

County finally rehabilitating Calle Concordia
"Pima County is rehabilitating the pavement on Calle Concordia from the Town limits at Calle Loma Linda to La CaƱada. This rehabilitation is slated for March, finishing up in April. After the County finishes and the road is brought up to an acceptable Overall Condition Index (OCI), the Town has made the commitment to annex that portion into the Town’s street network and maintain it moving forward." The county's section of Calle Concordia from the town line to LaCanada is a "horror show." Potholes. Bumps. Cracks. Good news. It won't be that way after April.

Did you know?
"For calendar year 2019, the Utility’s meter operations group installed 250 new water meters. As of December 31, the Utility had a grand total of 20,324 service connections."

Major League soccer returns to Naranja Park!
"The Red Bulls New York, Inc. has signed a facility use agreement with the Town to utilize our fields at Naranja Park again for MLS training from February 10 – 22. A free youth clinic will be hosted by FC Tucson and the New York Red Bulls on February 14 at Naranja Park."

Census 2000
"Town staff has created a Census 2020 web page to serve as a clearinghouse of information for Oro Valley residents. There is a lot of information being provided at the federal, state and regional level, so the Town’s page is an effort to streamline that information and focus on topics that may be of greatest interest to our residents. Staff has also created customized collateral (flyer, web banner, social media graphics) that feel more authentic to our community. That new collateral will be rolled out in the coming weeks and months via public meetings, social media, print and digital advertising, and our partner agencies. The Town’s page is located here."

The town's February resident's newsletter, Vista, is available on line. Here's the link.

Monday, February 10, 2020

Golf Management Services Bidders Conference This Morning

Golf management services bidders conference today
Parties interested in managing the town’s golf facilities will be meeting this morning at 9 o’clock in Town Council Chambers for a bidders conference. They can ask questions regarding the bidding and the facility. Later they will have a tour of the facilities.

Troon Golf is the current manager of the facility. Their contract is up for renewal or renegotiation. Troon has been operating the golf facility for Oro Valley. HSL hired them just prior to the sale to the town and then stipulated in the purchase contract that Troon must be the manager. The purchase agreement gives HSL the right to approve or disapprove any golf course manager.

The Twelve Objectives of Oro Valley Municipal Golf
The request for proposal ("RFP") lists a dozen objectives (panel right) that the town wishes to achieve regarding municipal golf. Some of these will be the responsibility of the successful bidder. Most are the objectives about the town wants to accomplish.

Scope of services
The successful contractor will be responsible for the following:
  • Provide all staffing, equipment, marketing, routine maintenance repairs and services for the operation and maintenance of the property;
  • setting price points for goods for sale and dining facility costs; and
  • recommending what capital projects are needed to improve the overall operation and maintenance of the golf course.
In return, the contractor will receive a monthly management fee. The budget provided in the RFP shows a management fee of $100,000 per year. The town will reimburse the contractor for their expenses each month.

It is unclear in the RFP for whom the staff actually works
Are they employees of the town, as they are today? Or are they employees of the management company? There is indication that they are employees of the management company. In submitting a transition plan "The Proposer should discuss their approach and methodology including but not limited to interviews with current Town staff, any rate changes contemplated."(Source: RFP page 25)

Pusch View course could be included
The RFP includes the opportunity for the bidder to operate the Pusch Ridge course. We reported Friday that town is negotiating with HSL to get out of that ownership and contract. HSL needs a golf course so that the El Conquistador can retain elite resort status. Hopefully, HSL will simply take over ownership of the land and operation of the course at some cost of the town.

Food is included in the bidding
There is no mention of the "Overlook Restaurant" in the RFP. There is discussion of the provision of "food". The RFP specifically states that the contractor is responsible for providing food and beverage concession services for lunch, and also the option for breakfast and dinner. It also states the "Town will not subsidize food and beverage operations." We wonder: Would a food cart suffice?

Marketing golf is the critical success factor but its not the top objective
The job of managing our Oro Valley's municipal golf is a challenging one. The town has set financial objectives such that the facility will receive no more than a $750,000 subsidy within the next five years. That's a bold objective in a marketplace where the popularity of the sport of golf is in decline.

Marketing golf should be the town's top objective. But it's not. It's number six of 12 (see panel left).

The company that wins the contract needs to be really good at marketing.

The secret of success of Oro Valley Municipal Golf is going to be whether or not golf memberships and golf rounds can be increased over the years. If so, then this is going to be a contract worth seeking. If not, we wonder why one would want to bid on it.

Friday, February 7, 2020

Bits and Pieces

Status of Pusch Ridge Course Unclear
The Town of Oro Valley continues to operate 45 holes of golf. The Pusch Ridge course continues in operation. The town is in negotiation with the owner of the El Conqustador Hotel, HSL, to take it over. Mayor Winfield told us that he is"...not at liberty to say more than that."

HSL needs to course in order to remain a viable golf destination. However, they "hold the cards" because the original sale, negotiated in 2015 by Mayor Hiremath, substantially restricts the town in terms of simply closing any one of the three courses the town still runs.

The Overlook Restaurant continues to operate
"The Town released an RFP [Request For Proposal]  a few weeks ago for golf operations. The RFP requires the new operator to manage the Overlook with no subsidy from the town," according to Mayor Winfield. The agreement reached by council in November was that food and beverage operations at the Community Center would be scaled to that which is appropriate for a municipal golf operation. The operation would be moved downstairs. That is not in the RFP.

Feedback to date on Parks and Recreation Master Plan study shows kids needs a low priority
Input received by the town, to date, would say that Golf is the number 1 recreational need of the town. Right behind that is making improvements to the community center. Third is preserving the closed Vistoso Golf Course as open space.  Community Center Improvements on hold, pending completion of the Parks and Recreation Master Plan Study.

The results are based on an open "tell us what you want" feedback form on the town Parks and Recreation Master Plan study web site. The town has received about 600 responses. Most of these we believe are from the residents living in these golf communities as there have encouraged their residents to visit the site.

Mayor Winfield has pointed out that "This is not statistically valid information, but represents community input received to date. A statistically valid survey will be done as part of the assessment and may show different results."

Indeed, the results are so drastically different from the last survey done in 2014. This was before the the town purchased the golf courses. It was before the Vistoso Course ceased operation. Golf was at the bottom of the 30 or so needs at that time.

We know that these results are simply ludicrous. How could "Increased Programs and Services For Children" be low on the list?