Gomez Paints Rosy Picture of Town of Oro Valley Financial Condition

Staff: Town finished year in strong financial condition

Town Finance Budget Director Gomez painted a rosy picture of Oro Valley financial results through June at last Wednesday's town council meeting. “We ended the fiscal year in strong financial condition.”  According to Town Manager Wilkins: "...financial performance across all funds has exceeded expectations."

Financial condition means fund balances

The town has sixteen separate funds.  These funds totaled $99.7 million at the beginning of the year. The end of year total was $90.3 million. All Funds were budgeted at a year end total of $68.6 million (per the town's published 2023 approved budget)

“Strong” means fund balances in relation to budget

Gomez based her assessment by contrasting the actual cash holdings in the Town's funds with the predetermined figures. These fund balances are determined by the income received (revenues) and the money expended (expenditures). While the Town has limited sway over its incoming revenue, it exercises full authority over its expenditure decisions. Importantly, the expenditures do not encompass outstanding debts.

Local sales tax revenues “flat” overall

The sole "negative" observation made by Gomez pertained to local sales tax revenues. The primary fund responsible for covering town operations is the General Fund, which derives nearly half of its revenue from local sales taxes. Although local sales tax revenue appeared to remain relatively stable when compared to the previous year, it actually decreased by 10% when adjusted for inflation. 

Gomez noted that all segments of local sales tax revenues exhibited growth, with the exception of construction-related sales taxes, which experienced a substantial 20% decline compared to the prior year. In 2023, construction sales taxes accounted for 20% of total local sales tax revenues, down from 24% in 2022.

The decrease in construction revenue aligns with a nationwide trend of declining housing starts. Economists have attributed this phenomenon to the rise in interest rates and the unprecedented levels of inflation. In simpler terms, potential buyers are finding it increasingly challenging to afford housing. On a more positive note, the higher interest rates have significantly boosted the interest income earned by the town in 2023.

Two major projects not completed..deferred to this fiscal year

One contributing factor to the "strong performance" is the allocation of budgeted funds that were not used. Two specific instances of this allocation can be found in this year's budget: 

Westward Look Roadway Improvement

First, there were funds designated for the revitalization of the Westward Look roadway, in accordance with the town's annexation agreement. The Town agreed to make these improvements when it annexed Westwood look. Once again, it has taken forever to get these done. Maybe this will be the year!

Elevator at the Community Center
Second, there are funds earmarked for the installation of an elevator and necessary structural modifications to render the Community Center compliant with ADA (Americans with Disabilities Act) standards. According to Oro Valley's Public Works Director, Paul Keesler, the ADA improvement project is expected to commence by November. This improvement is long overdue.

 
For years, the Town asserted that the service entrance on the right side of the community center, accessible from the parking lot, was ADA-compliant because it provided direct access to the second floor. However, this path involved struggling up a hill. Town activist Jim Horn raised this issue with the Town Council, prompting them to take action. They would never have done so otherwise. It has taken some time for Mr. Keesler to reach this point, but it appears that significant progress will be made by the end of this year. One day, there will be an elevator.

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Guest View-Bill Garner: Danny Sharp Is Oro Valley’s “One Trick Pony” (Part 1)

Danny Sharp lies about his opponent

The Oro Valley citizens have been inundated by multiple postcards and ads paid for by the campaign of “Danny Sharp for Mayor,” telling you that we need a new mayor. 

Look closely at these political hit pieces and examine how easily Sharp is able to throw out lies without any regard for his opponent. Sharp may extoll his integrity, but this behavior is his character. 

His negative campaigning is no surprise coming from our former Police Chief Danny Sharp because I oversaw his smoke and mirrors management tactics from 2008 -2016 as an elected member of the Oro Valley Town Council. It was during that time, especially when I attempted to do my job as an elected official and provide oversight to then Chief Sharp, that I discovered the depth of his ineptitude and extent of his fondness for abuse of power.

Danny Sharp is financially inept

There is perhaps no better example of Mr. Sharp’s combination of incompetence and arrogance than his inability to make sound decisions during difficult times. During the fiscal 2009/2010 budget cycle, he was so ill equipped to cut costs during a budget crisis that he had to reach out to an Oro Valley resident for help with the police budget. That resident was John Musolf, a retired budget and finance guy with over 40 years of experience. 

You see, then Chief Sharp had gotten himself into some financial trouble. When asked, like every other department head, to come up with cuts to his budget, he would only offer the elimination of six Community Action Team police officers. He believed that doing this would be so objectionable that it would exempt him from the work of the budget cutting exercise. 

When the Town Council pushed back on his idea, then Chief Sharp found himself at a loss. Thankfully, John Musolf agreed to meet with Chief Sharp, the Deputy Chief, and his Administrative Services Manager to come up with an alternative budget. After  assistance, the total savings in the police budget exceeded $1.3M with no cuts to police staffing. 

In a vote that had the full support of the police, staff, and citizens, the Oro Valley Town Council unanimously approved the 2009/2010 police budget. Sharp came along for the ride, but by no means was he the architect of the solution.

When Danny Sharp was “acting town manager” he had to hire an Assistant Town Manager to do his job for him

Sharp speaks to his service as acting town manager as his qualification to be mayor. He served as acting town manager from June 2016 to September 2017, exactly one year and three months on the job. The Town operates on a July fiscal cycle, which means during his tenure Sharp only contributed to one Town budget (2017/2018 fiscal year). He made that contribution by hiring Town Finance Director Stacey Lemos to be his Assistant Town Manager. 

Sharp added that assistant town manager position to an existing budget where no such position was funded, something for which the Hiremath council should have admonished him but didn’t. This position had been removed by the former Town Manager Greg Caton as unnecessary. But Sharp reversed that decision because for him it was very necessary. 

As I have stated, Sharp needed Lemos because he has no financial background. He was no model of monetary efficiency as Police Chief. One could conclude that if Sharp needed to hire someone to do his job as Town Manager, he will need to seriously augment the office of mayor to provide even the appearance that he has any competence at all. What will that cost the taxpayers?

When it comes to spending, Danny Sharp loves his “pet projects”

This brings me to Danny Sharp’s claims that the current mayor and council are mismanaging your funds and are on a reckless spending spree to include pet projects. Sharp was the “King Of Pet Projects” when he served as Police Chief.

During the time the Hiremath council enjoyed a majority (2011 to 2018), Sharp’s overall police budget increased every single year. During this time, the number of police officers never increased. The staffing level of 133 police department positions remained the same. His spending increased but the number of officers serving the community didn’t. 

Where did the money go? 

Pet projects of the police variety.

Did you know we had a bicycle patrol during Sharp’s tenure as police chief? Under his watch in 2008, the program was restarted with the cost for bicycles and equipment at $19,000. The only overt sign that Oro Valley had a bicycle patrol were the bike racks mounted on the back of patrol cars. One might ask how this expenditure added to public safety. Or perhaps this program was just another item to tick off the list when he spoke of his innovative policing model on the lecture circuit? We should all wonder how much the Town recovered from their initial expenditure when the program was again abandoned.

This is but one example of Sharp’s lack of respect for taxpayer money. 

You see, Sharp isn’t so bothered by pet projects if they are beneficial to the mystique he weaves about his unsurpassed skills in devising perfection in the policing model. 

But wait. There’s even more…
The Daniel G. Sharp Police Department Substation and Evidence Facility is located at 500 W. Magee Road. It is another example of fiscal mismanagement under Mr. Sharp’s watch. 

During the 14 months of project construction, you, the taxpayer, were saddled with over $2 million in unnecessary cost overruns. The 22,000 square-foot facility had a final buildout cost of about $6.1 million. The original building and property was purchased by the town through foreclosure for $315,000.. Sharp spent 20 times the building purchase price for this substation!

Now, let’s look at the lack of regionalization of special units during the early days of Danny Sharp’s tenure as Police Chief. Beginning in 1991, the Town of Oro Valley Police Department had its own SWAT team. You read that right—and we even had an armored personnel vehicle, not to mention the training and equipment costs that go into a dedicated unit. The Oro Valley taxpayers funded SWAT for 14 years, until SWAT was regionalized with Pima County in 2005, because regionalization of this type of effort makes good fiscal sense. 

One might reasonably ask: Why did it take Danny Sharp five years as Police Chief to pursue regionalization of the SWAT team if, as he alleges, he is so superior to the current mayor, council, and police chief in fiscal management of police resources?  He was building his empire at the expense of taxpayers. 

Danny Sharp’s only negotiating skill is “retaliation”

During my tenure on the Town Council, as a councilmember with a background in public safety, I attempted to provide input and oversight into Mr. Sharp’s financial excesses. It was my job to do so as your council representative. Sharp retaliated against me for doing my job. When I ran again for council in 2020,  he called me anti-cop, authoring a smear narrative on a glossy mailer accusing me of being against your safety. Hence, the hateful mailers, ads, and lies he is propagating in this election cycle are no surprise to me. [Note: Read LOVE’s report on this of July 9, 2020)

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Read “Part 2” of Bill Garner’s Guest View tomorrow in LOVE.

2023 Oro Valley Budget Approval Tonight

Council to review and approve budget detail tonight

The Oro Valley Town Council approved a budget limitation of approximately $148 million for fiscal year 2023 at its June 1 meeting. That set the maximum amount that the budget can be for this year. Tonight, after a public hearing on the budget, the council will discuss and likely approve, as is, the town manager’s recommended spending for fiscal 2023.

The only change in the budget since the June 1 meeting is a $2.1 million transfer of funds from the Community Center Fund to the General Fund to pay for golf course irrigation replacement. This leaves a planned balance of $1million in the Community Center Fund.

Budget is “heavy” on capital spending

About one third of all planned spending is on capital items. However, its actually larger than that, about 40%, when contingency reserves (unknown spending) and debt service are excluded. Over half of that amount is being spent on the buildout of Naranja Park and Golf Course irrigation. The funding source of most of this spending is the Parks Bond the town issued last September. The issuance of the bond reflects the majority council’s abandonment of the town’s forever policy of “pay as you go” spending for its parks facilities.

According to a town staff draft presentation, tonight’s approval of the budget will also approve what is called the “Ten Year Capital Improvement Program.” However, this is not true. 

“The 10-year capital plan serves as a placeholder for future capital investments and is used each year to develop essentially “year 1” of the plan annually.” (Source: Staff reply to council member questions, May 2022, page 6)

The vote of any council on a budget only approves the spending for that year and not for future years. This is an important distinction because future councils may have far different spending priorities than current councils.

Staff vetted budget over a two month timeframe

Town staff has vetted the budget using a methodical process:

• First, in April, staff met “one on one” with council members. Staff solicited questions and provided responses at these meetings. The questions asked by council members were detailed, requiring fifteen pages of staff response. 
• Second, staff conducted two budget study session with the Council in May. Staff covered every area of the budget in detail at these sessions, which lasted a total of about eight hours. Council members asked questions during these sessions.
• Third, staff presented the budget to the town’s Budget and Finance Commission at its May 19 meeting. Four members of the commission participated in this meeting. They spent an hour talking about the budget. They asked clarifying questions. 
• Fourth, council discussed the budget at its June 1 meeting at which the council approved the spending limit.  In addition. no residents spoke at the public hearing on the budget at this meeting.

Thus, we expect no changes of any substance tonight. 

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Note: The budget was unanimously approved by the council.

Bits and Pieces

Round Up at the Ranch5K Run/Walk off June 19

The Town of Oro Valley is hosting its seventh annual 5Kwalk/run at Steam Pump Ranch.  Proceeds from this event will benefit the Town’s “Rounds Up For Youth Recreation Scholarship Program”, which makes fee-based recreation programs accessible to Oro Valley youth who reside in financially constrained households. Registration is $25 in advance or $30 on race day. Click here to register.

Council approved 2023 Budget spending level of $148 million for 2023 on June 1

The Oro Valley Town Council approved a budget spending limitation of approximately $148 million for fiscal year 2023. They did so at the June 1 Town Council meeting. The discussion around the subject of the budget became contentious at times among some members of Council. We didn't report the details on this to you because frankly, we didn't think it rose to the level of civility that we expect from our council. The details of the budget will be discussed at the June 15th council meeting.  We hope that the contentiousness will end and that the serious business of approving the budget will be the focus of this session.

Oro Valley Crimefighter is back

If you are interested in keeping abreast of developments with the Oro Valley Police Department, then you will want to read “Oro Valley Crimefighter.” It is published by the Department. You can read the latest newsletter here. 

SAACA wants your help

SAACA wants you to be a part of a new community public art installation in Oro Valley! Oro Valley residents can help through this process. Your feedback will help bring creativity to fruition and will help inspire final design elements and themes. You can help by sharing your ideas and reflections on the community of Oro Valley. You can fill out the brief survey online here.

Oro Valley Police Department announces HiVE June Deployment

"ORO VALLEY, Ariz. (June 8, 2022) – The Oro Valley Police Department will be continuing our High Visibility Enforcement (HiVE) deployment efforts to address hazardous moving violations that contribute to collisions. The Oro Valley Police Department would like to remind the community the most important task while driving, is driving safely. We ask that drivers put their phones down, slow down and drive responsibly. The deployment dates and locations for June are: 

• Tuesday, June 14, 2022, from 07:00 A.M to 10:00 A.M in the Area of N Oracle Rd and N First Ave. 

• Thursday, June 23, 2022, from 07:00 A.M to 10:00 A.M. in the area of N Oracle Rd and N First Ave.”

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2023 Town Manager Recommended Budget Reduced to $148 million... Hearing Tonight

Town Public  Hearings Tonight

Tonight, Town Manager Mary Jacobs will ask the Oro Valley Town Council to approve a spending limitation of $147.7 million for fiscal 2023. This request is part of the first public hearing that the town is holding on the 2023 Town Manager Recommended Budget (“TMRB”). 

Requested amount is less than previously reported

The amount being requested is about $11.5 million less than was submitted in the TMRB on which we have reported.

Reduction in the request is the net result of changes in the funding requested of three items

• The General Fund request was reduced by about $600,000. That reduction is the net result of two items: An estimated increase of $2.7 million in state shared income tax revenue; and an increase in recommended personnel spending. The town manager is adding funds to provide for additional capacity for implementing the classification and compensation study currently being performed by an outside firm. 
• One of the largest recommended capital expenditures this year was in the water resources fund. This request was reduced by $10.3 million due to adjustments in the spending on partnered portions of the Northwest recovery project (NWRRDS). That is a project the town is doing in cooperation with the Town of Marana and with Metro Water to bring water more directly from a CAP Reservoir in Avra Valley to Oro Valley.
• The Town Manager  reduced her requested capital fund monies by $3 million. This reflects two items. One is a shift in the source of the funding; the other is changes in the estimated cost of some road projects.  

Spending requested for town operations remains the same

The operating portion of the TMRB (with the exception of the personnel cost spending increase noted previously) remain the same. So let’s take a look at those personnel costs. 

TMRB request is for staff to grow to 414

This year’s TMRB includes 414 personnel. That is an increase of nine full-time and four part-time positions. TMRB personnel spending is $89.3 million. 

 
Two departments are 52% of total personnel cost and 43% of all personnel (panel right)

Police

The Police Department is asking for funding of 139 positions. This adds two police officers and a civilians public information officer. An additional telecommunications position is also sought. The addition of the public information officer frees a sergeant position for field work. According to Oro Valley Police Chief Kara Riley, these staff position additions fulfill all staffing needs for 2023.

 

Water

The water utility has one-third of the town's personnel spending.  The utility currently has forty full-time and 1 part-time position. The department has no TMRB request for added staff.   

Public Works and Parks and Recreation

Public Works and Parks and Recreation are seeking to add four positions each. Public Works is responsible for building all the planned parks facilities. That will be a huge focus of their activity this year. The Parks Department itself wants to add staff at the aquatic center. The TMRB also seeks to add one Park monitor to help cover hours in special events of town parks.

 
Big raises due?
The town is undertaking a competitive wage study. As previously reported and as noted above, the result of the wage study will have a major impact on personnel cost. “The recommended budget includes $1.3 million in the general fund set aside for implementing the final pay plan which is yet to be brought to council. [The TMRB] also includes funds to continue normal step increases for all eligible town employees.”

 
According to Town Manager Jacobs, Oro Valley has fared better than other organizations when it comes to employee turnover and resignations.

Also tonight...Water rate hike!

Tonight's town council agenda includes a public hearing on the proposed 2022-23 water rate price increase. The council will likely approve the rate hike once the public hearing is closed.

Inflation, Availability, Uncertainty Haunt Town's 2023 TMRB Public Works Budget

"Challenging"
“If I could summarize this past year in one word, that word would be ‘challenging’”.  Paul Keesler, Oro Valley Director of Public Works noted this in his remarks to the Town Council at last week’s 2023 Town Manager Recommended Budget ("TMRB') Study Session.

Inflation, lack of supply, and lack of contractor availability cloud future

“Over this past year we were able to operate and move forward in this continuing inflationary, lack of supply, lack a contractor atmosphere. It’s no mystery. We’ve been talking about this for a while now: Supply chain issues and material availability… [lack of ] contractor availability: That's another battle that we've been fighting… many times we're only getting one bid and sometimes that it's not even in earnest."

2022: We've done a lot in a very difficult market. 

Keesler pointed to a number of accomplishments this year. “The biggie that Oro Valley is known for is that we're able to keep our street condition in its usual great shape… we treated approximately one-fifth of our streets this past year, which is per our schedule. Every street gets retreated depending on his condition roughly every 5 to 7 years so we we shoot for that roughly 20% every year.” Keesler noted this may not be the case going forward because of a shortage of one of the materials used in pavement preservation.

The town has also faced the inability to get replacement vehicles, whether they be for public works projects or police department vehicles. Keesler sees no end to this particular challenge for at least two more years.

Town is plunging forward with an aggressive fifty-project program for 2023
The TMRB for public works this year is $20.9million dollars. That is just for "normal" public works projects like road building and maintenance, building maintenance, and purchasing and maintaining vehicles.

Major "normal" public works projects planned for this year include rebuilding a portion of Shannon Road. This represents a shift in road funding because it is a replacement of an aging road. The town will be paying for this rebuilding from its own funds as opposed to getting funds from other governments sources as they have in the past.

One of the challenges Keesler noted was the need to do “cosmetic work” on the town’s bridges. This will not happen this year because the bid price for doing this was patently ridiculous. What should cost $400,000 was bid at $2 million.

...that includes managing the capital spending of some other departments

The Public Works Department also administers the capital spending of some other departments. This includes the capital spending on the town's parks that is included int he Parks and Recreation Department budget. The Parks and Recreation Department pays for the parks. But it's Keesler's department that actually gets the parks built!

This year this includes building some portion of Naranja Park, replacing the irrigation on one of the golf courses, and building additional multi-use paths. All of these three items are being paid for by the Towns $25million Parks Bond that was issued last September.

But there’s more. The town is replacing the tennis courts at the Community Center. That is another Parks and Recreation project. These courts require concrete. Keesler observed that contractors can only buy a specific amount of concrete. In order for there to be enough concrete for the town's project, the contractor has to use material from other projects on the Oro Valley tennis courts.

Keesler: A reorganize focus for 2023

Keesler has fifty projects on tap for the year and he has reorganized the department to get the job done. He has assigned projects to ten individuals who will be the project managers. There is one full-time project manager for Naranja Park. The other project managers will have four or perhaps five projects they will oversee.

Clearly, it will be a challenging 2023 for the Oro Valley Public Works Department.

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Chief Riley: TMRB Has Everything We Need

Request of $19. 1 million is "everything I asked for"

“Mr. Mayor and Council. Thank you for allowing me the opportunity to proudly present to you the Police Department's 2023 budget recommendations.” Thus began the remarks of Chief Kara Riley at last week’s 2023 Town Manager Recommended Budget study session. 

The budget request is $19.1 million [Panel below-right] for the Police Department. The request includes funding for every item that Chief Riley requested. In response to a question asked by Council Member Solomon, Chief stated that "I got everything I asked for."

Bottom-up budget involves "rank and file" and more

Riley built the budget request involving many of the personnel in the department. “Back in November 2021, we begin the process and discussion of what … police department men and women think we need in order to continue to be the best police agency in Arizona.” That means keeping Oro Valley the safest city in Arizona.

Requests adds two police officers.. frees up another for field work... focusses on recruiting

One of the key focal points of the budget is adding four positions: Two police officers, a dispatcher, and a civilian public information officer (PIO).  Staffing the PIO position releases an officer who is the current PIO for patrol work.

The goal of the PIO position “is to really focus on marketing and recruiting with diversity; so we want to make sure that we continue to have the best person to tell our story as a profession… We are focusing on marketing and campaigning to hire more police officers and get people in the door sooner” by working to increase interest in the profession.

Having the ability to recruit and develop officers is going to increase in importance. Some officers on the force are moving toward retirement. Future leaders need to be ready to assume new roles. Recruits will be needed to fill patrol openings. 

Inflation and availability play a major role in the budget. 

For example, there is a large increase in the cost of outfitting and operating vehicles. “Our biggest expense is vehicles. Right now we are starting to see the cost of the equipment for the vehicles go from $50,000 almost up to $70,000.” Availability is also an issue. “I have vehicles sitting right now that are not being outfitted because we can't get the stuff.” Other cost increase include the cost of gasoline cost.

Technology use increasing... drives up cost... but improves quality

The Oro Valley Police Department has been implementing technology to improve policing. "Every time we go to a crime scene there is technology involved. We must be able to gather information that is evidence. It is an expensive process of software that we have to be able to have in order to be the voice of victims.”

Chief Riley thanks the community

Chief Riley thanked the community for it's commitment to law enforcement [see panel above-left]. She also thanked her team.

Chief Riley thanks her colleagues on the Police Force

"Men and women in the law enforcement profession still come to work they serve every day through the structures of this job, through the pandemic and all the other calls for service that they may take. For that, I want you to know how grateful I am for the men and women of this agency. I want to publicly recognize all of them for their hard work and dedication to this community. I'm humbled and grateful and honored to be their Police Chief."

LOVE Opinion: TMRB Spending and Resident Strategic Needs Are Not In Balance

TMRB Spending and Resident Strategic Needs Are Not In Balance

This is LOVE’s fourth article on the Town Managers Recommended Budget (“TMRB”) for fiscal 2023. Our first article was an overview of the TMRB. Our second article was an overview of TMRB recommended spending on town day-to-day operations. The third article was our overview of TMRB recommended spending on facilities and infrastructure. This article focuses on the relationship between TMRB recommending spending of $159 million in fiscal 2023 and the strategic importance of each area spending to the residents of Oro Valley. 

Based on our analysis, there is an imbalance between the two. That is, there are some areas that are strategically critical to residents that are receiving far less funding than other areas that are less critical and of less strategic importance.

We define an area to be strategically important if it is absolutely essential

In other words, the residents of the town could not exist without it. There are two, perhaps three of these. One is the Police Department. The other is the Water Department. Residents could not survive for long without these two operations running at peak efficiency. The third is Public Works. Public Works keeps our roads in top condition but are not quite as strategically important as making sure we have water to drink.

There are other areas that are nice to have and certainly make living in Oro Valley attractive but are not critical to making sure that the residents of this town have the essential services they need. These are Parks and Culture and General Administration. This is not to say that is not nice to have these non essential operations. It means that investment in these ought to be done with great consideration and thought if, in any way, spending on them does or could impinge on insuring that Oro Valley has sufficient funds and borrowing capacity for the critical operations we need today and in the future.

There should be alignment between Oro Valley spending and strategic needs

The panel [above right] shows total spending as recommended by the town manager. Total spending includes spending on operations plus one time spending on facilities. Water is planned to receive the largest share of total spending. This makes sense. Water is strategically important to the residents of Oro Valley because they cannot survive without it. Police protection is also strategically critical to the residents of the town; but recommended police spending is a very small share of total spending. Parks and Culture, on the other hand, are receiving a substantial share of total spending. Yes. Parks are nice to have in a community. But they are not essential. 

Bringing it together

The chart at left depicts the relationship between the essential nature of a program and the amount of money proposed to be spent on that program in the TMRB. 

Spending in areas inside of the green rectangle are in balance.  Areas outside these rectangles are out of balance either because they receiving far more or far less in spending given their strategic importance to the residents.

It's a matter of opinion

Our analysis is subjective. It’s our opinion. That is why we labeled this article an "opinion." You may have a different opinion and you are welcome to share it with us on our Facebook page.

LOVE will report about the TMRB as it moves through the review process. Next: The Oro Valley Town Council will study it on May 11 and 12th.

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The Town's Planned Park's Projects For 2023

Investment summarized by facility

Yesterday, we posted regarding Town Manager Mary Jacobs recommended capital spending for fiscal 2023. We noted then that spending on Parks and Recreation is the centerpiece.

The $25million bond the town issued last September is the "driver" of the spending. That bond requires spending on Naranja Park, Municipal Golf and the Mult-Use Path system.

There are other projects, not included in that funding. This include refurbishing tennis courts and updating/correcting facilities at Steam Pump Ranch.

The following chart shows spending by facility:

Town Manager Recommends $56.1 million In Capital Spending in 2023

"A conservative projection"

Oro Valley Town Manager Mary Jacobs is recommending capital spending in 2023 of $56.1 million. Jacobs says that this is a conservative projection of spending. Two programs dominate this spending: Almost half is for Parks and Recreation facilities; while one quarter is for water facilities.(See panel below, right)

Parks and Recreation: $26.1 Million
Spending for Oro Valley Parks and Recreation facilities is the centerpiece of this year’s capital budget portion of the Town Manager's Recommended Budget ("TMRB").

$10 million is budgeted for spending on the buildout of Naranja Park. 

We’ve noted in a previous article that the specifics of exactly what amenities are going to be built at the park have yet to be defined. The town is moving forward with grading the remaining undeveloped portions of the land and installing needed infrastructure.

Spending on municipal golf is almost $7.8 million. 

That includes spending of $7 million on golf course irrigation for the town’s two 18-hole golf courses. There is also money planned for golf path repaving, for turf replacement, and for equipment replacement.  $142,000 is set planned for reconfiguring the Pusch Ridge facility parking and pedestrian approach to meet ADA code requirements, resurfacing of roof and replacing roof drains.

From what we can tell, no money is targeted for improving the Pusch Ridge golf course. As we noted recently, the group Friends of Pusch Ridge believe that more needs to be done at their course.

The TMRB calls for spending approximately $1.9 million on the Community Center

Almost 80% of this relates to mobility access. That has two components. One is spending $750,000 on “Various accessibility modifications and improvements to the Community Center.” The other is a "placeholder" for an elevator that also costs $750,000. We call it a "placeholder" because it has been included in the past three town capital budgets. 

Water Department: $15.1 Million
There are two components to the Water Department capital funding amount. Approximately one third is planned to be spent to maintain the existing water system. This includes a host of projects. The remainder is a continuation of a project to bring water directly from one of the Avra Valley reservoirs that hold CAP water to Oro Valley. (Currently, Oro Valley gets CAP water through connection to the City of Tucson water system.) The project is called NWRRDS. It is a project in which the town is partnering with the Town of Marana and Metro Water.  We think that some of the cost included in the budget are partially reimbursed from those entities. NWRRDS spending is planned at $10.4 million this year.

Public Works: $8.0 Million
The town's Public Works Department takes care of the roads on which we travel, the facilities the town uses, the vehicles it uses, and the town’s public transportation interface. There are seventeen public works projects planned. The largest proposed projects include pavement preservation ($1.9m), two road repaving projects, ($1.2m) and vehicle replacement ($.5m).

General Administration: $5.8 Million

Approximately 60% of TMRB general administrative capital spending is a project that will establish a fiber optic network for expanded broadband services. This will provide a faster internet network. The town believes that having such is"... critical to Oro Valley's ability to attract, grow and retain primary employers and expand job opportunities. (TMRB, p 114). Most of this project is funded by a grant.

Police: $1.2Million

We identified two capital projects that relate to the police department. One is to replace police vehicles ($1.1m). The other is for a traffic camera video recording system. 

Whats' Missing?

The TMRB's schedule of capital projects includes spending for all projects anticipated over the next ten years. Two items which LOVE has been following are not included in this schedule. One is funding for a new police facility. According to our discussion with Chief Riley, one will be needed within five or six years.  The other is funding for bringing reclaimed water to the southern section of the town. Such would save millions of gallons of drinking water by converting the Pusch Ridge Golf Course, Kreigh Park, and CDO High School to its use.

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About The TMRB: "Capital spending conservatively projected"
"Costs for capital projects have been projected conservatively and are higher than predicted just a year ago. The Town’s experience, as well as that of our regional and state counterparts, is that availability of contractors and subcontractors is unpredictable and continues to significantly impact the cost of capital investments. The Recommended Budget includes additional project contingency funds budgeted in the Capital Fund, Water Utility Fund, and Community Center Fund to ensure capital projects can still move forward if the Town’s updated estimates do not align with future market conditions." (Source: TMRB 2023, P.iii).

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About the numbers

The numbers we have presented by program are based on the detail information by department presented in the TMRB.  This detail does not tie to the summary presented by the town manager. The summary for capital spending per the town manager is $59.5 million. The detail provided by program is $56.1 million. We have not identified why there is this difference. However, regardless of the reason, the data we have presented in accurate at the program level.

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Town Manager Recommends Spending $90 Million For Town Operations In Fiscal 2023

$90 million, for all day-to-day town operations

The fiscal 2023 Town Manager Recommended Budget (“TMRB”) includes $90 million in spending for operating the town. That provides for the essential and non essential town services, activities and programs. A few weeks ago, we summarized the approved budget for 2022, segmenting spending in six major categories. We’ve done the same with this TMRB. You can see this summary on the panel below, right.

There are two departments that comprise more 50% of the budget These are the Police Department and the Water Department. Both are similar in that they do not require the supervision of the town manager. The police department reports directly to Town Council. The Water Department is a freestanding business. It should report directly to Town Council because it is such and because water sourcing is going to be the most significant challenge Oro Valley will face over the next two decades.

Water Department: $28.5 million
The Water Utility is expected to spend $28.5 million this year. That is an increase of $4.4 million from last years budget, It is far more than the $18.7 million in revenue sources for the utility. The Utility continues to make investments in this distribution system. Some of this is investment is reflected in this operating budget. As you will read in our posting next Monday, there is also a portion that is in the capital budget.

Police spending: $19.1 million
Proposed police department spending is proposed to be $400,000 more than last year. “The Police Chief continues to make minor organizational changes to increase efficiencies and focus policing resources on data-driven needs” (TMRM, vii).  The department is budgeted to add 4.5 positions, bringing the total complement of the department to almost 139 personnel. That represents almost one-third of the towns total recommended staffing

Parks and Recreation: $15.3 million
The Parks and Recreation budget of $15.2 million is 16% of the total budget of the year. That spending is a substantial increase over prior years, reflecting the growth of program scope fostered by the Winfield Council. it simply cost more money to operate a bigger park system. The spending is a 61% increase from spending projected in fiscal 2022.

“The Recommended Budget continues to focus on (1) investing and maintaining high quality parks, recreation, and trail facilities, and (2) providing residents with multigenerational recreation and cultural programs and events. Of note is the robust investment in Naranja Park to begin implementation of the updated master plan, which includes additional multi-purpose fields, a splash pad, pickleball courts, a basketball court, skate park and pump track.” (“TMRB, p vii) 

As you will see in our posting next Monday, investment in the parks system is the largest driver of increased capital spending 2023.

Public Works: $13 million
The town continues to invest in its roads and other public facilities through its public works program. This year, spending is proposed to be about $1.2 million more than last year’s budget. Public Works includes more than just roads. The stormwater program and the transit program are part of the public works department. In addition the department is responsible for fleet and facility management.

General Administration: $11.2 Million
There is no general administration department. We grouped a bunch of general administration type things in this category. Our categorization includes spending for community development, human resources information technology and, the town manager. The largest spending in this category is for innovation and technology. Technology spending grown substantially over the years because technology has become the forefront of improving efficiency and reducing cost.

“The Innovation & Tech the town Council expenses) is committed to providing secure, proven, innovative technologies that enhance operational efficiencies while providing convenient access to government information and services.” (TMRB, p 50)

All Other: $2.3 million
This category includes the cost of the town Council, cost of the legal department, and the cost of operating the magistrate court.

Next Monday: LOVE’s summary of TMRB capital spending of $56 Million

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About the numbers:  The numbers we have presented by program are based on the detail information by department presented in the TMRB.  This detail does not tie to the summary presented by the town manager. The summary for town operations per the town manager is $90.4 million. The detail provided by program $89.3 million. We have not identified why there is this difference. However, regardless of the reason, the data we have presented in accurate.

Town Manager Jacobs Unveils $159.2 Million Budget Proposed For Fiscal 2023

The process begins 
"It is my privilege to present the Town of Oro Valley balanced budget for Fiscal Year (FY) 2022/2023. This budget totals $159.2 million." Thus begins the process of developing the the Town of Oro Valley's budget for 2023.  That budget takes effect July 1. The budget includes spending for every service the town provides to the community.

Recommended capital spending record high
The town manager proposes spending more than $56 million on capital items this year. There are eighty-three projects. These projects include spending $10m on the Naranja Park buildout and almost $7m in the replacement of the golf course irrigation on the community center two 18 hole golf courses.

Town operations to cost $90.4 million
Operations includes public safety ($19.1m), water($28.5m), parks and recreation ($15.2m) and public works ($13.0m).  Spending on town operations has grown over the years, indicative of the expanded scope of town services. Oro Valley requires more infrastructure to serve the substantial population growth that has happened in the community. 

Staffing up to 416 personnel

The town manager is requesting increased staffing in virtually all areas to a total of 416 employees. This is up from 400 employees in last year's budget.  In addition, the budget includes more than a $1.3 million in pay increases anticipated based on a competitive wage study that the town is now undertaking. That study will be presented to council in a month or so.

Inflation a major budget factor
According to Jacobs, inflation plays an important role in her recommended budget. On the revenue side, sales tax revenues are inflated because the cost of the things we buy are inflated.  "Sales taxes for FY 22/23 are 19 percent higher than the current fiscal year budget, largely reflecting the results inflation is having on local purchases." Inflation is running at about this same rate.

On the expense side: "inflation, supply chain delays, and the impact of overall supply/demand issues have been reflected in the Recommended Budget... Departmental budgets include higher-than-usual annual increases in areas such as gasoline, public safety equipment, field supplies, technology, professional services and more across the organization."

Key dates for budget review and approval
There is plenty of opportunity for residents to learn about and opine on this proposed budget.

• May 11 at 5 p.m. – Council Budget Study Session #1 
• May 12 at 5 p.m. – Council Budget Study Session #2 
• June 1 at 6 p.m. – Public Hearing and tentative budget adoption 
• June 15 at 6 p.m. – Public Hearing and final budget adoption

At some point, we suspect, the town's Budget and Finance Commission will review and opine on the budget. However, that timing has not been published.

Upcoming LOVE articles on proposed budget

There is much to the Town Manager's recommendations. Wednesday we will discuss spending on town operations. Next Monday we will discuss spending on capital projects.

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Bits and Pieces

Concert Campaign Kickoff for Incumbent Candidates on April 30
Friends and neighbors of incumbent Mayor Winfield and Council Members Barrett, Joyce-Ivey, and Nicolson are hosting a campaign kickoff event on April 30. It is at Steam Pump Ranch from 6pm to 9pm. There will be music by the "Final Approach Band." Food, wine and non-alcoholic beverage will be available for purchase.

Today, Town staff celebrates Earth Day
"Town of Oro Valley employees will roll up their sleeves this Friday, April 22, and participate in an Earth Day beautification event from 8:30 to 10:30 a.m. Employees who volunteer to participate will be picking up litter and debris along sections of La Cañada Drive and Lambert Lane. The invitation to help beautify the community was extended by Oro Valley Mayor Joe Winfield, with the support of Town Manager Mary Jacobs, as part of the statewide #EarthDayAZ effort. The OV Public Works Department will be handling event logistics." (Oro Valley Press Release)

Town reports improved golf financial results through February
The town reported the financial results of golf operations at this past Wednesday's town council meeting. For the eight months ended this February, the 47-holes of Town owned golf courses are operating at close to break even, a vast improvement from the same time last year (See panel right). 

We think there are four factors at play here. First, the pandemic caused a resurgence in the sport of golf. Second, baby boomers are retiring and many have not returned to their jobs. Third, the town changed golf course managers. Finally, the homeowner associations around the courses stepped up to increase course memberships and use.  

The financial results do not include the capital spending needed to keep the courses operating. The town will spend $8 million in the next to years to replace the irrigation on the two 18-hole courses. In addition, the town will have to do something to eliminate the use of drinking water on the Pusch Ridge Course. The most logical solution is switching to reclaimed water. The town "guesses" that this might cost up to $8milion.

Town releases 2023 Town Manager Recommended Budget
"ORO VALLEY, Ariz. (April 21, 2022) ––The Town of Oro Valley has released the Town Manager’s Recommended Budget for fiscal year 2022/23 in the amount of $159.2 million. Click here to view the budget document in its entirety. The balanced recommended budget is $2.8 million, or 1.7% lower than the adopted FY 2021/22 budget that totaled $162 million. The General Fund budget totals $51.6 million, a 12% decrease from the FY 2021/22 budget of $58.9 million. 

Some overarching themes reflected in the budget include addressing notable cost increases in supplies, operations and maintenance across all departments, adding new employee positions to meet growing service demands, and implementing a robust capital investment strategy utilizing Parks and Recreation $25 million bond proceeds and other one-time revenues." (Source: Town of Oro Valley Press Release)

Read a more about this budget starting Monday In LOVE.
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As 2023 Budget Is Being Developed, Here's What To Look For (Part 2)

Last week, we presented a view of overall town budgeted spending for fiscal 2022 (which ends in June) and our quick thoughts on why the budget will likely be bigger for fiscal 2023. We identified three key components that comprise town operations. Today, we look at one of the three keep element: Spending on Town Operations

It costs $91 million to operate the town in 2022
The total cost of operating the town in 2022 in budgeted at $91million. This includes has fourteen operating budget programs. Two of these, the Police Department and the Water Utility, are essential services. The rest are discretionary services, though some are less discretionary than others.

Essential programs-Police and Water- $32.8 million
The Police Department and the Water Utility budgets combine for 36% of the town operating budget. These two departments employ 44% of the town's 400 employees. They are both "life preserving" programs. 

From a financial perspective, however, they are quite different.  The water department gets its funding directly from customers. The Police Department gets its funding from the General Fund, which is the primary fund that your sales taxes and state shared revenues fund go into.

The two departments also differ in the level of scrutiny they get from the council during the budget process. The water utility gets no look at all. On the other hand, the funding for the police department has been a "political football" in past years, with some council members trying to paint their council opposites as "anti-cop." 

One final difference. The Police Chief and the Department report to Town Council. The Water Utility reports to the Town Manager. Consequently, the Town Council has primary responsibility for the police department budget.

Non essential programs: $58.3 million
We've classified everything else the town does as "non essential." That doesn't mean that the programs are not important. It means that these programs can be more easily scaled and adjusted because without impact on life. All of these departments, though, are important to the community. Two are public works, which maintains the town's road's and oversees public building projects (such as the Naranja Park expansion) and Parks and Recreations. We expect the Parks and Recreation budget to increase substantially because the program is rapidly expanding.

One large pool of spending is classified as "General Administration." The amount is about $20m. It is a collection of items that are discretionary. Half of budget dollars was a one-time payment to reduce the underfunding of the police pension. Much of the rest is to fund town operations and maintenance. The rest is spending on discretionary items, such as contributions to Visit Tucson.

2022-23 Town Manager Recommended Budget unveiled next week
The FY 2022/23 Town Manager Recommended Budget is in final development and will be distributed to the Town Council in the days following the Easter weekend.  It will also be posted to the Town’s website. Budget study sessions are scheduled for May 11 and 12 at 5 p.m., with tentative adoption on June 1 and final adoption on June 15. (Source: Town Manager's April "Executive Report To Council")

As 2023 Budget Is Being Developed, Here's What To Look For (Part 1)

2023 Budget underway
The Town of Oro Valley is preparing the 2022-23 budget. The process started in February with a strategic planning session with town council. The process ends in June when the town council approves the budget. In between, the town manager will submit a recommended budget. There will also be opportunities for residents to opine on the proposed budget

Record setting spending expected
We suspect that the 2022-23 budget will be "record setting" in terms of spending for two reasons:

• The town will be spending some of the $25 Million in Parks Bond money borrowed last fall.
  Tonight, Town Council will be briefed on the status of that spending. The timing of that spending will have a one-time impact on increasing the capital projects spending for the next two years.
• Spending on town operations will increase.
  This is because of added spending to maintain the existing and the new parks the town will operate. This includes the added cost of maintaining the "to be named" Vistoso Nature Preserve. In addition, the town has engaged a consultant to do a "Comparative Wage and Beneifits Study." This study will be completed in time for the results to be included in the recommended budget. The town conducted a similar study in 2014 that resulted in large increases in wages and extended benefits for town staff.  Add to this the fact that extreme inflation has ballooned the cost of everything.

Total pending is $153.7 million this year
According to a town created chart, the budget for this year, which ends June 30, is $163 million. The town published budget is $153.7 million. We think that the difference relates to spending on capital projects ($5.1 million less) and contingency reserves ($5 million less).

Spending on town operations is $91.1 million this year
Town spending has three major components. Each one has very different characteristics in terms of the level of control a council can have over the spending:

• Spending to pay the cost and retirement of debt ("Debt Service") incurred by the town is fixed. The debt must be paid or retired per borrowing terms. The only control the council has on this spending is their authorization to incur the debt. This year, the council approved more than $50million in debt issuance. The cost of debt service will likely increase in 2022-23.
• Spending to pay for capital projects is almost entirely discretionary.  For example, this year the current council authorized millions in spending on the town's parks facilities.
• Spending for town operations is primarily under the control of the town manager. OroValley Town Manger Mary Jacobs has said that it is the town council's job to set policy. It is Jacobs' job to implement that policy. The town operations budget is town manager's implementation of that policy. 

We will continue our discussion of the budget in future articles. Next up: A look at spending on town operations.

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Bits and Pieces

What’s ahead for the Vistoso Preserve
”The Conservation Fund will hold the property until July 1, 2022.  They will provide some limited maintenance for the property until that time and can provide you with the scope of work. “The Town will open and maintain the restrooms beginning July 1, 2022 and will focus on addressing various public safety concerns in the short term.  We will involve the community in developing a plan for the property that conforms to the conservation easement sometime next fiscal year.” (source: Email from Mayor Winfield).

Friends of Pusch Ridge Ridge Golf: Why we care about water

"Climate change. Droughts. Changing weather patterns. Infrastructure needs. Bigger bills.   Water is a controversial topic, especially in dry climates like the Sonoran Desert. Yet our website includes water-related articles and we may from time to time share other information regarding water use.  

You might ask why? Friends of Pusch Ridge Golf is not a conservation group, we don’t have a political agenda, and we are not water experts.  Simply put, we are supporters of the Pusch Ridge Golf course, and as supporters we recognize that our “Fast, Fun, Affordable” golf course requires a certain amount of water.   Our job is to do our best to ensure that PRGC remains the thriving, valued town amenity and commercial enterprise it has proven to be - nothing more, nothing less." 

View their August 2021 article on Water Conservation here  and their  February 2022 article title “Water is Vital to Economic Vitality” here.  (Source: Friends of Pusch Ridge Golf, February 16 Newsletter)

2022-23 Budget process starts... Staff compensation will be one focus area
"Departments are fully engaged in the budget development process for next fiscal year, and my team and I are carefully reviewing local, regional and state data for trends that will impact revenues and expenditures." The town hired a consultant to perform a staff compensation study. The result of the study will be included in the budget. (Source: Town Manager's Executive Report To Council, February 2022). 

The last compensation study the town performed in 2014 resulted in significant across the board staff compensation increases, the creation of self-funded insurance, and an on site health and wellness clinic (Source).

2021 Popular Annual Report is available
Want to know what's going on financially with the town but don't want to dig through the traditional annual report? Then the Popular Annual Financial Report (PAFR) for the fiscal year ending June 30, 2021 is just for you!

"Each year, the Town of Oro Valley produces an Annual Comprehensive Financial Report (ACFR), which outlines the Town's financial position and operating activities, and includes audited financial statements; however, due to its length and scope, the ACFR is not very reader-friendly. In order to make the Town's financial information more accessible to the public, Oro Valley began producing the award-winning PAFR in 2012. The PAFR includes a summary of accomplishments, net assets, activities, revenues, expenditures, debt and financial ratings and a snapshot of historical trends in these areas. To view the PAFR online, click here or search for PAFR at www.orovalleyaz.gov." (Source: Oro Valley Vista, March 2022)