We attended the Oro Valley budget information session this evening at the Oro Valley Town Council Chambers, along with about 70 other people. Stacey Lemos, the Towns Director of Finance and Interim Assistant Town Manager, presented an 18-slide summary of the current state of finance in Oro Valley. Greg Caton, Interim Town Manager, and Stacey answered questions.
Here is the presentation: Community Budget Forum Presentation
Here's our takeaway:
- The town has five funds totaling about $58 million in spending.
- The general fund, the most discretionary of all funds, is 45% of this amount.
- The police budget is about 45% of the general fund.
- Greg Caton believes that town spending is "under control" [our words] and that the town can continue to manage through the global economic malaise by:
- Annexing areas where the town can earn sales tax and bed tax revenues
- Seeking special revenue building opportunities such as special events that can be built around the revamped town pool and other facilities
- A continued effort to "right-size" Oro Valley by not replacing positions when employees leave
- Partnerships that will reduce our cost, such as the pending partnership for Coyote Run with the RTA ("Regional Transit Authority")
We observed the following "dignitaries" in attendance:
- Brendan Burns, Town Council Candidate
- Council Members Solomon, Snider, Waters and Hornat
- Former Council Members Loomis, Dankwerth and Carter
- Police Chief Danny Sharp
- Bill Adler wants the town to consider a property tax to fund the Police. After all, to Bill's thinking, everyone in Oro Valley has police protection as their number one priority.
- Helen Dankwerth was there to protect the library. After all, it makes great sense to her for Oro Valley to spend $1million simply to say it has its own library and because our library is so unique.
- Terry Thompson, a member of Friends of Coyote Run, was there also. He didn't ask a question. Our guess is that he just wanted to make sure that any discussion of Coyote Run supported its turnover to the RTA.
"Let the games begin!"
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(View KOLD's report on this meeting)
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6 comments:
I was surprised by:
1) With so many homes in foreclosure or for rent & with AZ's high unemployment & families struggling to pay for necessities, that some think the Town should invest money in Narnaja Park. Shouldn't we wait til the economy is more stable?
2) that a citizen promoted a property tax but is not willing to even consider reviewing police dept's administrative costs for potential changes
3) that the bio-tech bldg is suddenly feasible & worth speculative investment when just a few wks ago, Mr Ford said there was NO opportunity for anything but apartments there; that he couldn't even rent the bldgs he owned near Foothills
4) that Caton & Lemos did not treat the community like dumbies. Far too often, we are talked down to & scolded like bad children because the Town knows best. Apparently monarchy is not just at the Federal level.
Concering your #3--Article in The AZ Daily Star stated Rodger, the hot-head, Ford is going to build. HE HAS RESURFACED. He plans on building on 2-E--now a "Bioscience-tech campus" (published in AZ Business Section, Thursday, Jan. 26, dquinn@azstarnet.com)
If you read the article you would think that Mr. Ford sees opportuninty for CPI type investment.
But then again is he just attempting to give the residents something to think about until he does an MU?
TREO? MTCVB?
Any indication that the town will NOT be funding these two scams?
Any indication of PENSION liability for public employees?
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You can link to the article to which Ferlin refers by clicking here.
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My take on the January 25, 2012 Budget Forum:
In my opinion, Greg Caton, Interim Town Manager, is enamored with partner regionalization to save Oro Valley. Makes one wonder why the founders of Oro Valley ever wanted to be independent?
Greg Caton spoke of all the money we will save with the partner regionalization of Coyote Run.
Greg Caton spoke about how we need MTCVB and TREO for economic development and without them we will be helpless! Wonder how Marana can prosper without MTCVB and TREO?
Greg Caton said Annexation might solve some of our future revenue problems. However, a number of people said that Pima County would get all the revenue (taxes) and we would get all the infrastructure costs? We would get sales and bed taxes. Would it be worth it? Stay Tuned!
Greg Caton spoke of the partnership with CAP for replenishing Oro Valley aquifers and there I am in total agreement with him.
Greg said we would have a tentative budget by May 2, 2012 and a final budget approved by May 16, 2012 before the new council is seated. What’s the rush?
Stacy Lemos said it looks like we will not have a projected budget deficit with all the budget cuts we have made in the past year.
Background
What is a “Balanced Budget”?
A balanced budget simply means that the town staff has identified the revenue that is available and matched it to the expenditures that the department managers feel is necessary. The primary missing element is usually justification by department managers for these expenditures. How do we know if the expenditures are totally lean?
Traditional Incremental Budgeting
From the founding of Oro valley up to the appointment of Stacy Lemos, Finance Director, Oro Valley had used incremental budgeting, where departmental managers would list increases or decreases over the previous year budget and what has been already spent is automatically sanctioned. The detailed activities of each department were never cost justified.
Program Budgeting
Stacy Lemos, Finance Director, introduced a program budgeting process that was primarily formula driven.
The program budget allocates money, focusing on major program areas to be carried out. Program areas often utilized by government may include Public Safety, Development/Infrastructure, and Parks/Recreation.
There is no identification of the detailed activities of a department, program or project with their cost justification.
Economic Downturn
During recent years Oro Valley has experienced economic downturns which resulted in deficit budgets. The Town Manager and Town Council had to cut expenses and raise some taxes and fees (revenue) to balance.
Recommendation
What the Town of Oro Valley needs is total cost justification of all department or program activities or expenditures. In zero-based budgeting, every department function or activity is reviewed comprehensively and all expenditures must be approved, rather than only increases or decreases. Zero-based budgeting requires the budget be justified in complete detail by each manager.
John Musolf
I for one would like to see each department manager justify their own budget. This is the way the more progressive businesses operate. The manager is given the opportunity to display their knowledge, or lack thereof, of the department, its cost structure and opportunities for continuous improvement.
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