The Oro Valley Town Council held a budget study session on May 5 to review the operations portion of the FY 2025–26 Town Manager's Recommended Budget. It was a quiet meeting with no pushback on department allocations and only a few clarifying questions. The budget was presented function-by-function, and councilmembers appeared content to listen and observe.
Town-wide budget holds nearly steady
Town Manager Jeff Wilkins and CFO Dave Gephart opened the session with an overview of the full $147.1 million proposed budget, which represents a 2.4% decrease from the prior year. The decline reflects a drop in capital spending, while personnel and operations costs were held nearly flat. There is only one new full-time employee proposed—a police officer. The Town continues to face rising costs for services and supplies, even as key revenues like sales taxes and state shared revenues have flattened or declined.
General Fund pressure grows
The General Fund—the Town's main operating fund—is expected to decline slightly, with a projected ending balance of $17.1 million. That leaves only a small cushion above the Town's 30% reserve requirement. Revenues from local sales taxes and state shared income taxes are either flat or falling, while one-time increases in building permits and school contracts help offset the drop. Still, the revenue increase year-over-year is only 0.5%.
Only Parks and Recreation request shows big increase
Each major department presented its portion of the budget. The Police Department will see a modest increase, primarily to cover salary step increases and benefits. The Court budget declined slightly. Parks & Recreation proposed a $1 million increase, most of it tied to operations at the Community Center and aquatics programs. Public Works will see a slight decrease, with reductions in street maintenance and capital spending offset by a notable increase in transit costs. Community and Economic Development remains stable, while the administrative departments are essentially flat.
Council questions focused on revenue
Councilmembers asked only a handful of clarifying questions—most notably about the state's flat income tax and its impact on shared revenues. There were no motions, no requests for reallocation, and no new policy direction. The tone of the meeting was professional, brief, and quiet.
Police salary negotiations will change the numbers
One factor that will impact the proposed budget is the outcome of the Town's ongoing negotiations with the police union. The FY 2026 budget includes salary increases based on the current Memorandum of Agreement (MOA), but the final agreement—which the Council will vote on separately—will include higher raises. Consequently, the Town will need to amend the budget or dip into contingency funds. Over the long term, higher base salaries will also increase the Town's required annual contributions to the Public Safety Personnel Retirement System (PSPRS).
More budget work to come
This was the second of five scheduled budget discussions. The next session will be held with the Budget and Finance Commission on May 20. Councilmembers are expected to review and adopt the final budget in June.
- - -
