How Fiscally Sound Is The Oro Valley Bed Tax?

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The Oro Valley Bed Tax is a source of funding for the aquatic fund.  So, the financial health of bed tax is critical to the financial success of the aquatic center.  If the bed tax is not sufficient to pay for the debt service on the aquatic center and for the operating cost of the center, then the general fund will have pick up the "slack."

We think, therefore, that it is reasonable to ask: "How healthy is the bed tax?"

With this question in mind, John Musolf met with Town Manager Greg Caton and Director of Finance, Stacy Lemos.   They provided John with their perspective which is:

• Projected bed tax revenues for 2012-2013 are $788,000. This is 99% of last year's level.  Caton and Lemos feel comfortable that this amount of revenues will occur.
• They project expenditures of $666,500.  They feel comfortable that this level of spending will be met.   
• Next year, Oro Valley will take more from this fund than they put in, assuming that bed tax revenues meet this year's projected level.  Lemos believes that next year's spending level will be substantially more; approximately $925,000.  This is because of interest payments on the aquatic center bonds and greater spending on MTCVB. 

The big risk with the bed tax this year and, therefore the aquatic fund, is that the bed tax revenues will be less than projected.  This will even be a bigger risk next year when spending will increase, resulting in the need for substantial additional bed tax revenues.

How fiscally sound is the bed tax?  Is there is some reason for concern?  Does Oro Valley need to stabilize and increase this revenue source?  We will discuss more on this tomorrow.
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