The cost of building a project does not include the cost of maintaining it.
The current re-elected Council majority will tell you that they vastly improved Naranja Park, they provided more ballfields, trails, a splash pad, and a pump track. However, we have no idea what it is going to cost to maintain these amenities, and perhaps they don’t care because that will be the task of a future Council.
For example, this Council has already indebted the Town, and future Councils to pay back the $25 million bond for Naranja Park amenities (some of which were not desired by the majority of the citizens). They have increased the Town’s liability with a dangerous pump track only last week did they even discuss potential town liability.
“Fully Loaded Costs” = Total Cost... the cost of building, the cost of maintaining and the cost of improving over time.
When I was on Council, I established a network of officials from other communities to help me in finding out different ways to tackle a project. I recently had a discussion with one of these individuals and was introduced to another new term: “Fully Loaded Costs.” In other words, the long-range costs of maintaining an amenity.
This is what is missing in Oro Valley at the moment.
When staff presents the costs of a project to the Council, it should not only advise as to what the cost to establish the project is, but the cost of maintaining the project. This puts “tomorrow” into the decision. The Council knows how much the splash pad and pump track are going to cost to build, but do they know what it going to cost to maintain these amenities? After all, the maintenance is a problem that a future Council is going to have to deal with. Because of this lack of foresight, somewhere down the road, a future Council may have to cut something else in the budget in order to keep these amenities open…or close the amenity altogether.
A prior Council requested to see "Fully Loaded Costs" prior to purchasing the Golf/Community Center.
Staff included the tables in the insert at right, estimating the 10-year forecast for the golf improvements. In this example, you can see that staff predicted that everything (except for ADA requirements) would be accomplished by the end of FY 2019/20 (June 1, 2019).
This is a prime example showing that even when staff is requested to give Fully Loaded Costs, they cater to the Council and do not give accurate estimates.
For example, staff noted that the Conquistador irrigation replacement would cost $1.5 million, when in reality it cost $7 million. Including inflation, I still doubt that today’s cost is 5 times the cost predicted in 2015-2017.
The Council needs to add "tomorrow" to their vocabulary.
They should know the Fully Loaded Costs (the long-range costs of maintaining an amenity) of any project they approve. But one wonders, since the staff manipulated the costs in the past to appease former Mayor Hiremath, can we also expect them to manipulate the costs to appease Mayor Winfield in order to advance his pet projects? Remember, the same staff that presented the faulty 10-year forecast for the golf courses is the same staff now in place.
Will we ever truly know the Fully Loaded Costs upfront? Will "tomorrow" ever be a part of the equation? Or will we never learn the true costs until 7-10 years later when the actual costs are finally revealed?
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Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.
Staff included the tables in the insert at right, estimating the 10-year forecast for the golf improvements. In this example, you can see that staff predicted that everything (except for ADA requirements) would be accomplished by the end of FY 2019/20 (June 1, 2019).
This is a prime example showing that even when staff is requested to give Fully Loaded Costs, they cater to the Council and do not give accurate estimates.
For example, staff noted that the Conquistador irrigation replacement would cost $1.5 million, when in reality it cost $7 million. Including inflation, I still doubt that today’s cost is 5 times the cost predicted in 2015-2017.
The Council needs to add "tomorrow" to their vocabulary.
They should know the Fully Loaded Costs (the long-range costs of maintaining an amenity) of any project they approve. But one wonders, since the staff manipulated the costs in the past to appease former Mayor Hiremath, can we also expect them to manipulate the costs to appease Mayor Winfield in order to advance his pet projects? Remember, the same staff that presented the faulty 10-year forecast for the golf courses is the same staff now in place.
Will we ever truly know the Fully Loaded Costs upfront? Will "tomorrow" ever be a part of the equation? Or will we never learn the true costs until 7-10 years later when the actual costs are finally revealed?
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Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.
