The Town Of Oro Valley is embarking on building its 2015 budget. It's not going to be easy to do.On the surface, things look just fine. Oro Valley's current revenue sources include development fees and sales tax revenues. These are "over budget" so far this year. Spending is a bit under budget. Faced with this, the council majority-4 voted last month to not consider alternative sources of revenue.
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| Source: Community Budget Forum 1-16-14 |
The challenge of town budgeting is that things never stay the same. The town has very little influence over its revenues once the year begins. Development revenues, for example, ebb and flow based on many factors. So, the "top line" is locked in.
Oro Valley does have control over its spending. Spending, however, doesn't stay the same. Employees, for example, want more pay, pay above inflation increases. Inflation drives up the costs of goods and services. Some town infrastructure needs replacement. Some neglected areas, like not over seeding our parks in the winter, need attention. One-time costs also arise. There are more ideas for spending money than there is money to spend.
In the past 4 years, Oro Valley has worked through these murky waters, using a combination of fiscal spending restraint, increased fees, a now-permanant 4% utility tax, and the "raiding of funds," like the contingency fund.
But spending pressures are building.
From an ongoing cost perspective, there are two items that could drive additional cost into the operating structure of the town. One is the town's current negotiations of a memorandum of understanding with the Oro Valley Police Officers Association ("OVPOA"). That will likely result in increased spending. The other is an employee compensation study. This study, which will be released in the next several weeks, compares Oro Valley's town staff compensation levels with that of other cities. This study will conclude that Oro Valley staff is paid less than "comparative commuities".
One-time expenditures arise from separate initiatives. They come up during the year as a "surprise" decision that must be made then and there. They are not in the budget. For example, this year, the council decided to take $1.5 million to build infrastructure and ball fields at the Naranja town site. The funds fore this came from the contingency fund. Last year the council decided to spend $2 million to bury underground power lines along Oracle and Tangerine roads. The funds were taken from the contingency fund. Two years ago council decided to spend $5 Million to recreate the Oro Valley Aquatic Center. Next year, the town will complete a study of the Naranja Town Site. Who knows what spending will be needed to fund this plan.
Building the Oro Valley 2015 budget ain't for sissies.
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The town manager's recommended budget will be delivered to council on April 2. The target date for council adopting the budget is May 21.
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3 comments:
There was additional spending that was either planned or unplanned that affected budgeting in FY2013/2014 and could affect some future budgets.
One of the difficulties in setting a budget is how to set priorities for
expenditures (spending) when you have limited resources (revenue).
How much did the citizens participate in these decisions?
Did the average citizen even know they happened or whether any town money was used?
Just to name a few:
The archery range development in Naranja Park?
The transfer of Oro Valley Library to Pima County?
Any immediate annexation costs for the Oracle & Ina area (including Tohono Chul Park) and any ongoing development or maintenance)?
The development of a new marketing campaign and promotional material such as a brochure aimed at recruiting new businesses, residents, and visitors?
The Steam Pump development? Weren’t Pima Bonds supposed to pay for all development and/or ongoing maintenance?
Expenditures to bring Central Arizona Project (CAP) water to Oro Valley? Residents and business have been paying Groundwater Preservation Fees (GPF) on their water bills for years for this very purpose. Now that this goal was achieved will these GPF fees on residents and business continue at the same level? The answer is probably yes!
One approach is “Priority Based Budgeting” which is a response to poor economic conditions or limited resources. As opposed to incremental budgeting, where resource allocation is determined based on marginal shifts in costs, priority based budgeting fixes the amount of available governmental resources and then allocates resources across the various programs. The programs receive their allocation based on their priority; priorities may include safe and secure communities, health, education, and community development among others. Outcome
assessment then determines the efficacy of the programs.
I think we can simplify the whole process. Here is how. Mayor HigherMath meets with Vice-mAYOR ( excuse me) Chief Sharp and ask , " So how much do you need for the police dept next year?" IF THERE IS ANY MONEY LEFT, he calls Town Manager and provides the balance to be spread to all other departments
Vice Mayer Sharp, I love it. And the Police Union City Council!
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