THE COMMUNITY AND RECREATION FUND HAS A NEGATIVE BALANCE
The Oro Valley Community and Recreation Fund (CRF) is the fund the Oro Valley Town Council established to cover the real estate purchase of the El Conquistador Community Center and Golf Courses.
The Mayor and the council majority told the citizens that all monies spent would only come from revenues derived from the Community Center and the 1/2 cent sales tax increase. There would be no General Fund money utilized, only CRF money. They were wrong.
This fund was originally established by transferring $1.2 million from the General Fund Contingency, with the promise that this money would be paid back at the rate of $120,000 a year for ten years. Unable to make the first year’s payment when revenues were much less than expected, they claimed that the recall election, coupled with factual information to the public, created “headwinds” that caused a lack of interest in memberships.
The CRF started FY 16/17 with a balance of $161,744. This is all that was left of the original $1.2 million. However the staff has assured the Council that the CRF will be able to make its $120,000 payment to the General Fund Contingency next year and also spend $527,200 in capital improvements. However, in the first month of the fiscal year (July 2016) the CRF lost $82,069. Deduct that from the starting balance of $161,744 and you’re left with a balance of $79,675. As of August 2016, the CRC lost $215,912. This means that the CRF is now in the RED for $54,618.
Further inspection shows that the fund has not spent any money for capital improvements. However, the cart paths on the Conquistador Course have been resurfaced, so where did that funding come from? I suspect the answer is that the funding came from the Public Works Department, which is NOT funded through the CRF, but through the General Fund. If I’m correct, then the Mayor’s claim that the CRF would cover the investment is no longer true.
When staff is questioned about this, they insist that the revenues, coming from both the sales tax and the golf/tennis/fitness, are cyclical and that the fund will rebound before the fiscal year ends on June 30, 2017. In fact, they forecast that the fund will end the fiscal year with a positive balance of $25,325.
As of today, the CRC has a $120,000 payment to the General Fund and $527,200 in promised capital improvements. Historically the fund has never had a month where there was a positive cash flow. There were 250 golf memberships in July 2016. This is now down to 232 memberships. Troon says they need 318 memberships by December.
We are only two months into the fiscal year. Golf is not rebounding, the restaurant continues to lose money ($37,157 in two months) golf membership is dropping, capital improvements are being covered by the General Fund, and the "special" fund to cover all this is carrying a NEGATIVE BALANCE.
Now the Mayor and his new "civil" council all believe that this is a 5-year project, despite the fact that there is so much that doesn’t add up. Be assured that myself and others in Oro Valley will be keeping a close eye on the evolution of this project and how it is being funded.