Vice Mayor Dankwerth Speaks out on OV Budget

Oro Valley projects $17 million budget shortfall

Brian P. Nanos
The Explorer
April 18, 2007

Oro Valley is on pace to lose more than $22 million from its general fund by 2018, according to newly released fiscal projections.

Those projections also indicate the town’s highway fund will suffer a $12 million shortfall over the same time period.

Those figures, included in a long-term financial sustainability plan created by the town’s finance and bond committee, come at a time when town officials are already calling for the town’s first-ever property tax.

The all-volunteer committee will present those numbers to the town council April 25, and will recommend several measures to address the financial situation, including:

Turning control of the library to Pima County.

Charging user fees for use of parks.

Not building the complete municipal operations center planned for Rancho Vistoso Boulevard.

The members will also suggest that town departments be subject to regular outside audits.

However, during the committee’s discussion, the members could not reach a consensus on what taxes, if any, the council should consider raising.

Committee member Chuck Kill, for example, was steadfast in refusing to recommend any more taxes until he saw, program by program, how much money could be cut from existing town departments.

After the finance and bond committee was first presented with the dire 11-year projections, Vice Mayor Helen Dankwerth, the council’s liaison to the committee, said the numbers enforced the idea that the town needs a property tax.

“Realistically, anyone who thinks that we can exist without that does not have his feet planted firmly on the ground,” she said.

Earlier in that week, Mayor Paul Loomis had ended an April 9 Naranja Town Site study session with similar comments. “We are going to have to get there eventually,” he said.

He added, “We’re running out of alternatives, as you all know.”

State law prohibits towns from levying a primary property tax — which would be used to finance day-to-day operations — without voter approval.

Dankwerth told the committee she felt that a property tax would be rejected by voters at least twice before it would eventually pass.

The projections, computed by the town’s finance department, show the general fund starting with a $14 million surplus but losing that surplus by 2016. By 2018, the town’s general fund is $8 million in the red.

The forecast assumes that the town will not annex any lands in that period, and that all commercially zoned real estate will be built by 2010. Much of the falloff in projected income comes after that period, because there would be no new developments to generate tax revenue.

However, even in the 2008 projected budget the town is spending 17 percent more than it earns.

The general fund projections also do not account for the police department’s request to increase the town’s rate of coverage to 2.5 officers per 1000 citizens. If that request is granted, it would cost the town about $1.3 million a year for the next 10 years.

Also presented to the finance and bond committee were projections that saw the town’s highway fund falling $9 million in debt by 2018.

“Frankly, it’s the highway fund I’m worried about most,” said Finance Director Stacy Lemos.

Like the general fund projections, the highway fund projections left out some possible costs: the repaving of some roads and the cost of putting the town’s electrical wiring underground. The creation of the long-term financial sustainability plan was suggested by Councilman Barry Gillaspie after the town increased utility taxes to pay for extra police officers. Gillaspie said the discussion over new taxes would be helped if the town and its citizens had a more compete understanding of their financial situation.