The following message is from a resident in the Suffolk Hills community of Oro Valley (southeast of Oracle rd & Magee.) Although we are aware of much of the information gleaned by the homeowner, it is applicable to all OV homeowners and we believe worthy of passing on.
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I have come across something that may be of interest to other property owners here in Suffolk Hills.
I received an invoice from Rural Metro Fire Department just this month and my rate from last year had increased by 47%. I thought this was exorbitant so I started calling to see why such a large increase.
I first called the city of Oro Valley and was told that they did not have any control over Rural metro and perhaps Pima County did.
I next called Pima County and after several transfers the person in charge of finances told me that Pima Counaty had no control over Rural metro, but did say they were a private corporation and perhaps the Arizona Corporation Commission could tell me something.
I call the Arizona Corporation Commission and the said Rural was a corporation but they did not have any control over them.I then called back to Oro Valley and asked for a copy of any contracts as well as the Oro Valley Emergency Service Standards
which were mentioned in the letter attached to the yearly fee invoice.
There is a contract between the City of Oro Valley and Rural Metro Fire Department as well as Golder Ranch Fire District. This contract specifies that the City of Oro Valley be paid $250,000 per year for the right to provide fire service to Oro Valley.
I think this is what has happened. The Old Kord ambulance service became Rural Metro Fire and they now think that the ambulance and rescue business is more profitable to them than the fire service, so they have gone to the Golder Ranch Fire District (In Catalina)and made a contract with them to provide the fire service to the City of Oro Valley. The rates for this service were much higher in Catalina (they might have a fire hydrant every few miles or so) Golder Ranch liked the rates in Catalina because they were higher and would provide them more revenue, so they just adjusted
our rates to match theirs. They are also tying the rates to the Pima County assessed value of the home.
Their Corporations depend on subscribers for their revenue, but no one is required by law to subscribe to their service.
I just pass this along, so that you may know what is happening in our area.
Wayne Elledge
550 E. Cambridge Dr.
Tucson, Arizona 85704
Friday, November 14, 2008
John Musolf: Questions & Answers Concerning Naranja Park
Our Oro Valley neighbor John Musolf has questions concerning the recent defeat of the Naranja Bond issue. John also offers his insight with some astute answers concerning the future of this site.
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It should be the goal of any municipality like the Town of Oro Valley to finance projects from general funds without borrowing (pay-as-you-go). It’s called budgeting and all of us do it personally.
Some municipalities feel the some major projects may need to be financed. Since Oro Valley has no Town property tax the major sources of revenue for major projects is the general fund (state shared taxes, sales taxes, and fees).
The Town of Oro Valley has used the municipal bond approach to finance some major projects:
· To acquire the 213-acre properties called the Naranja Town Site.
· To build the Town of Oro Valley Library.
· To currently fund the building of a new Municipal Operations Center.
Municipal bonds are sold to the investing public. Municipal bonds pay interest to the bondholder over a 25 or 30-year period. The bonds appeal is that the interest is exempt from federal taxes and in some cases state or local taxes.
The key to using the municipal bond approach is that the bond interest that will be paid to the bondholder needs to come from an identifiable revenue source. For example, the identifiable revenue source might be a portion of the local sales tax to pay the interest on some municipal bonds.
The primary risk to the municipality is that other priority capital projects such as roads, water development, etc. may not occur since there is not enough identifiable revenue money to go around for all projects (perhaps even for day-to-day operations).
The other danger is that in bad economic times the TOV could default on these municipal bonds because of insufficient funds to go around (such as less state shared tax revenue).
The Town of Oro Valley could have used the regular municipal bond approach to fund the Naranja Town Site Park!
Why did the Town of Oro Valley take the approach of using General Obligation Bonds?
Perhaps the answer lies in the type of municipal bond (general obligation bonds) that the Town of Oro Valley wanted to use to fund the Naranja Town Site Park.
This is the kind of municipal bond that TOV had on the ballot for November 4, 2008. The major difference is that general obligation bonds are issued with the belief that a municipality (TOV) will be able to repay its debt obligation through direct taxation such as a secondary property tax instead of other identifiable revenue sources such as state shared revenue, sales tax, or fees.
There is little danger in default on these bonds since property taxes can be increased. Municipal bond investors like this added security. Taxpayers do not.
The TOV was seeking voter approval to create a secondary property tax to fund the general obligation bonds for the Naranja Town Site Park.
Once this happened, the issue no longer had anything to do with the merits of building a recreational park but with a referendum on a property tax.
Perhaps, the voting against the Park also had to do with the huge amount of money. Many people forget this started as a $150 million dollar project and was “reduced” to $50 million. Many citizens considered that still too high!
Some have suggested we do a more “modest” version of the park. What is the definition of “modest”? Is “modest” like the undefined “open space” definition that the State Land Trust was using in talking about the Arroyo Land Annexation. Some definitive parameters would have to be established.
Others have suggested other uses for the land to recover some costs since only a smaller portion of the property would be used as a park.
Many have suggested a combination of private (corporate/individuals) donations, user fees, and limited public funds.
A dialog has been opened.
I would suggest forming a park citizen committee. There would be limited involvement from the Town Council and Town Staff. There would be extremely limited use of any consultants.
I, for one, would gladly volunteer and I am sure there are others as well.
Let’s start fresh and keep an open mind.
John Musolf
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It should be the goal of any municipality like the Town of Oro Valley to finance projects from general funds without borrowing (pay-as-you-go). It’s called budgeting and all of us do it personally.
Some municipalities feel the some major projects may need to be financed. Since Oro Valley has no Town property tax the major sources of revenue for major projects is the general fund (state shared taxes, sales taxes, and fees).
The Town of Oro Valley has used the municipal bond approach to finance some major projects:
· To acquire the 213-acre properties called the Naranja Town Site.
· To build the Town of Oro Valley Library.
· To currently fund the building of a new Municipal Operations Center.
Municipal bonds are sold to the investing public. Municipal bonds pay interest to the bondholder over a 25 or 30-year period. The bonds appeal is that the interest is exempt from federal taxes and in some cases state or local taxes.
The key to using the municipal bond approach is that the bond interest that will be paid to the bondholder needs to come from an identifiable revenue source. For example, the identifiable revenue source might be a portion of the local sales tax to pay the interest on some municipal bonds.
The primary risk to the municipality is that other priority capital projects such as roads, water development, etc. may not occur since there is not enough identifiable revenue money to go around for all projects (perhaps even for day-to-day operations).
The other danger is that in bad economic times the TOV could default on these municipal bonds because of insufficient funds to go around (such as less state shared tax revenue).
The Town of Oro Valley could have used the regular municipal bond approach to fund the Naranja Town Site Park!
Why did the Town of Oro Valley take the approach of using General Obligation Bonds?
Perhaps the answer lies in the type of municipal bond (general obligation bonds) that the Town of Oro Valley wanted to use to fund the Naranja Town Site Park.
This is the kind of municipal bond that TOV had on the ballot for November 4, 2008. The major difference is that general obligation bonds are issued with the belief that a municipality (TOV) will be able to repay its debt obligation through direct taxation such as a secondary property tax instead of other identifiable revenue sources such as state shared revenue, sales tax, or fees.
There is little danger in default on these bonds since property taxes can be increased. Municipal bond investors like this added security. Taxpayers do not.
The TOV was seeking voter approval to create a secondary property tax to fund the general obligation bonds for the Naranja Town Site Park.
Once this happened, the issue no longer had anything to do with the merits of building a recreational park but with a referendum on a property tax.
Perhaps, the voting against the Park also had to do with the huge amount of money. Many people forget this started as a $150 million dollar project and was “reduced” to $50 million. Many citizens considered that still too high!
Some have suggested we do a more “modest” version of the park. What is the definition of “modest”? Is “modest” like the undefined “open space” definition that the State Land Trust was using in talking about the Arroyo Land Annexation. Some definitive parameters would have to be established.
Others have suggested other uses for the land to recover some costs since only a smaller portion of the property would be used as a park.
Many have suggested a combination of private (corporate/individuals) donations, user fees, and limited public funds.
A dialog has been opened.
I would suggest forming a park citizen committee. There would be limited involvement from the Town Council and Town Staff. There would be extremely limited use of any consultants.
I, for one, would gladly volunteer and I am sure there are others as well.
Let’s start fresh and keep an open mind.
John Musolf
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