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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The Watchdog Report: And The Bleeding Continues

Should we believe Mayor Winfield when he tells us that golf is making money? We have heard this time and time again, yet the facts prove otherwise as seen in two October reports. One is the  profit and loss statement for the golf courses. The other is the report for the general fund report.

Highlights from July 1 through October 2022 (33% of the way through the fiscal year)
• Golf expenditures exceeded revenues by $605,000. (This is $61,000 more than last year’s loss for the same time period which was $544,000.)

• El Conquistador Golf had 310 less public rounds and $1,394 less in green fee revenues in October 2022 than in October of 2021. Golf had 450 fewer total rounds played this year than last year.

• Even more significant, for the fiscal year to date (July 1 – October 31) the public rounds are 2,536 less than this same time in 2021, and $50,740 less in collected green fees.

Losses have continued since the golf courses opened in May 2015
You might remember that our previous mayor (Hiremath) asserted that we would only lose major money in the first two years but that things would even out by year 3. He also said, “In year 4 or 5 or 6, are we going to project a profit? You’re darn right, we are.” [Source: December 17, 2014 Town Council Meeting]

Well, it’s now 7.5 years later and these losses have continued. We, the citizens, just invested $7 million in irrigation upgrades. The golf members are doing all they can, but it’s not enough.

Still waiting for ADA Compliance
Money still needs to be spent on making the Community Center ADA compliant, as well as the tennis courts at Pusch Ridge. The proposed capital outlay for the CCF still proposes to spend $2,666,700 of which only $312,105 has been spent. This means that the Town is expecting to dish out an additional $2,354,595. Where is this money coming from?

Draw your own conclusions

The Council has already spent over $28,000,000 for the Naranja Park amenities. They have done nothing to diminish the amount of potable/drinking water that we use to irrigate Town properties [panel left] and the mayor tells us golf is making money. Read the attachments we linked above. These are the town's numbers.  Draw your own conclusions.

On top of all this, the General Fund is forecasted to end the fiscal year with a decrease of $12 million. (Although the FY 2022/23 budget forecast showed an expected decrease of $13.8 million, so this is better than expected). This is the fund which pays for the operation of the Town. The ghost of former Town Manager Mary Jacobs is still haunting us. However, the Town Manager cannot do anything without the concurrence of Council.

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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.

Council Agrees It's a Priority: Improve Community Center Mobility Access Now

All agreed: Time to act is now

After much discussion last week, the Oro Valley Town Council unanimously agreed to do something now to improve mobility access to the Community Center.  Improving mobility access had been deferred by council for four years because it had become intertwined with a possible redesign of the Community Center.

Resurface.. .improve parking... add a conveyance

Vice Mayor Melanie Barrett  crafted a motion with the help of Councilmember Solomon to get something done now. 

The motion compels staff to make immediate improvements to the mobility accommodations. This includes resurfacing and cleaning up the ramp, repairing electric doors, adding handicap parking. The motion also directs staff to develop a proposal on how to get a "conveyance" into the existing building and to do without any other modifications to the facility. Solomon added, and it was agreed, that this become a funding priority from existing Community Center Funds.

This "fix" has been needed since 2015

Councilmember Solomon presented a timetable [panel right] starting in 2018 showing that there was intention, but not action, to make the Community Center more mobility accessible. He asserted that the current council "...decided to not make community center renovations and the ADA compliance a priority.”

Making the Community Center more mobility friendly was never a priority for any council

Councilmember Solomon's chart is misleading. It notes a date of July 2020. That is the first time that any specific improvement in mobility access was defined by any council. And that happened under the current council.  That improvement was an "elevator." However, the motion that the council passed at that time was to add the elevator only as part of a grand redesign of the Community Center. That redesign yet to happen.

Indeed, as Council Member Bohen noted, a fix for the mobility problem was never a priority of any council. "Something should have been done in 2015" when the town acquired the facility.

Winfield "takes the bullet"

Mayor Winfield observed that the current situation reflects badly on us as a community and on him as the Mayor. “I support universal access. Access for all of us.” Recently, Winfield traveled around the community with a resident who has disability challenges. They toured many of our facilities. Winfield wanted to see our facilities through the eyes of someone else. “I will freely admit that I’ve let the community down in this regard. I could have done a better job.”

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Community Center Complies With ADA Requirements. But Is That Good Enough?

Town is ADA Compliant
The Town of Oro Valley asserts that all of its actions comply with ADA requirements. That includes the accommodations for handicap individuals at the Community Center and the Pusch Ridge Golf Course. 

This, according to an email we received from Town Manager Mary Jacobs. In addition, the town prepared a memo to the town council on March 16 that discussed the town’s ADA compliance.

The Community Center is not subject to ADA accessibility legislation 

The reason that the Community Center is ADA compliant is because the bar of compliance is extraordinarily low. According to the town, the facility does not have to comply with ADA regulations because it was built prior to 1992.

“The CRC was constructed before January 26, 1992, and therefore was not subject to ADA accessibility legislation. As the new owner of the building since 2015, the Town is provided with the latitude under ADA … to gradually make the facility fully compliant with current accessibility codes.” So, in the case of the Community Center, doing nothing complies with the law. And doing nothing is exactly what the town has done. ADA compliance does not “Mobility Friendly”

The Community Center may be ADA compliant but it is not “mobility friendly.”

We demonstrated this in our posting last Wednesday. That posting included a video of how difficult it is for a mobility challenged individual to access the Community Center.

Town Manager Jacobs believes that the current access is good enough
Apparently, the video did not have an impact on the thinking of the Town Manager Jacobs. 

“Currently, the paths a person with a disability takes to enter the facility are long, with involved inclines. However, the routes are at least three feet wide, accessible, and without barriers for both the first and second floors. While not ideal, the structure and design comply with ADA access regulations.”

According to Town Manager Jacobs, “long, inclined routes” are ok for an individual with a walking disability to use; or for someone in a wheelchair that they push themselves; or have their 80 year old spouse push. This, after driving around the parking lot looking for a handicap parking space that doesn’t exist.

Council discussion on April 6

It is our understanding that the council will consider this matter at the council meeting of April 6. 

It is our hope that they will focus on why the elevator has not been installed. We think it has something to do with the Town Manager's "grand plan" to remodel the community center at substantial cost.

 

The Community Center Is Still Not "Mobility Challenged Friendly" After Seven Years... and It's A Problem

A seven year problem that has yet to be fixed

In June 2019, Mike Zinkin in a Watchdog Report in LOVE observed that funds had been approved in the budget for an elevator at the Community Center... an elevator that would have substantially improved accessibility for the mobility challenged. Zinkin, at that time, also observed that that money had yet been spent: 

“We have owned this property since May 2015 and it is still not mobility challenged compliant. Why isn’t the Town Manager funding an elevator for the Community Center? Does anyone care about our citizens who are disabled and currently have to enter the building through the loading dock?” 

Yesterday, in his guest view, Zinkin once again noted that that money had yet to be spent.  Zinkin has been championing getting the facility mobility challenged friendly since 2015.

It is March 2022, almost seven years since the town acquired the building and nothing has been done at the community center to make it mobility challenged friendly.

"Walk the Walk"... Access is terrible today

Several weeks ago in his Oro Valley Podcast, Jim Horn took us on a walk on what is now the only way mobility challenged individuals can access to the Community Center. He included it in his podcast (right).

Horn brought this to the attention of the Town Council during the "Call To Audience segment" of the March 16 meeting (See video below-left). He referred to several messages that he had received in response to his podcast, messages that disparaged the Council for not acting to make the Center mobility challenged friendly.

Others spoke on the same matter at the meeting

Former council member and now council candidate Bill Rodman reviewed the history of the matter, reflecting on the fact that $750,000 have been appropriated by this council. He observed, as others had, that that money was never spent. He said that it was a matter of the current council’s priority.

Council Member Bohen: "Improvement should have happened long ago"

Council Member Tim Bohen has been on council for more than a year. "I have no idea why compatibility features were not immediately done" once the town purchased the property in 2016. 

Bohen asserts that the town manager has simply not done her job. After all, she did not get the elevator built though the budget included 750,000 last year. "My support for splitting the golf half percent dedicated sales tax was because I did not trust the town manager's ability to manage projects. She did nothing with these sales tax funds other than to pay for keeping the golf courses operating." 

What is the current plan? 

Bohen is not aware of a plan to do any infrastructure project at the Community Center, let alone improving access for the mobility challenged. 

We asked Town Manager Jacobs what will be done, when it will be done, and what is the cost.  

Next Wednesday: The town's response

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Guest View: Mike Zinkin – Where did all the allocated money go?

Something is amiss in Oro Valley governance

The type of Government we have in Oro Valley is based on the Town Council (elected officials) making the Town’s policies, and the Town staff (unelected officials led by the Town Manager), carrying out those policies. 

 However, in Oro Valley something is amiss.

Council sets policy. Staff implements. 

The Council has study sessions and public meetings to ensure that the budget is fully vetted by both the policy makers and the public. The budget process is somewhat lengthy and detailed, and the vote to amend and approve is the most important vote the Council makes every year.

The Council should feel confident that their policies, as reflected in the annual budget, come to fruition

However, there is a real problem in Oro Valley in that the adopted spending policy has not been carried out.

We have heard how the Council allocated $750,000 to make the Community Center ADA compliant. What happened? Where did the allocated money go? The Council has enough on their plate without having to worry about their policies coming to fruition.

The State of Arizona requires that all budgets be balanced
If the Town Manager submits in the budget that an expenditure is $X, then there must be $X in revenues. For example, if there was $750,000 allocated for Community Center ADA compliance issues, then there has to be $750,000 in revenues.

Town Council’s adopted budgets are not being implemented
On page 244 of the adopted budget for FY 19/20, there is a Capital Improvement allocation for a $3,000,000 bond for golf course irrigation improvements. What happened? Was there a bond, and, if so, where are the improvements? On page 227 of the adopted budget for FY 20/21, there is a Capital Improvement allocation for $1,100,000 for golf course irrigation. What happened? Where are the improvements?

On page 230 on the adopted budget for FY 21/22, there is a Capital Improvement allocation for $90,000 for tennis court resurfacing. However, the Council just passed a bond where some of the money is going to resurface tennis courts. What happened to the allocated $90,000?

On page 110 of the adopted budget for FY 21/22, there is a breakdown of the personnel allocated to the Town Manager’s office. In this breakdown there is no allocation for the position of CIP Director. However, there was a recent Facebook posting advertising a position for a CIP Director. This is a position that is not budgeted. 

Where did the Federal Cares Act money go?
During the Call to Audience at the March 16th Town Council meeting, Town Council Candidate Bill Rodman stated that the Town received $5.3 million in Federal Cares Act money. Who authorized the spending of this money and where did it go? Did the Town even consider spending this money on piping reclaimed water to Jim Kriegh Park or Riverfront Park or to the Pusch Ridge Golf Course?

Town Policies are being ignored
There are adopted Town Policies which have been ignored by this Council and Town Manager. Town Policy 6, adopted on 3/5/97, and reaffirmed on 4/20/05 is titled “Unbudgeted Expenses”. It directs the Town Manager to go to Council for approval for any unbudgeted expenses. Where was the Council approval for the above-mentioned unbudgeted position?

The Council needs to fix this problem
It is unfortunate that our underpaid part-time Council members cannot rely on the Town Manager, who makes over $184,000/year to carry out adopted policies and procedures. The Council must ensure that their policies are carried out.

The Council must ask: What happened to the $750,000 for ADA compliance? What happened to the previously approved expenditure totaling $4,100,000 for golf course irrigation? Where did the allocation for a position in the Town Manager’s office come from?

It is too bad that our Town Council cannot expect their decisions to be carried out. Unfortunately, this delinquency is costing Oro Valley a lot of money.

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You can watch Zinkin's remarks to council on this matter above.

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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.

Guest View: Mike Zinkin ~ More General Fund money for the “Turn-Key” operation

The budget for FY 2020/21 has passed and the stench of the Hiremath regime still permeates the air. The Chamber of Commerce still gets $40,000, Sun Corridor still gets $10,000, Visit Tucson still gets over $200,000, there is $10,000 for employee service awards (an average of $300/employee), the Children’s Museum still gets $75,000, and there is over $2.9 million for outside services. All this in a period when our revenue stream is uncertain due to the pandemic.

Pay-as-you-go?
There is $1.1 million budgeted for golf course irrigation improvements. Awhile back, the Council voted that all improvements to the golf courses would proceed on a “pay as you go” model. We have over 5 years of history on the performance of the Community Center Fund (CCF) and it has never had a positive balance of $1 million. In fact, according to page 6 of the Town Manager’s Recommended Budget, the CCF is forecasted to end the 2021 budget with a deficit of $214,212.

The approved budget also allows for $750,000 to be spent toward ADA compliance of the Community Center. (ADA upgrades were supposed to have been completed by FY 2018/19 according to the rosy projections and promises of the Hiremath council.  See below.) 

From the Town's December 2014 Power Point Presentation

I asked the Town where all this money was coming from. The Town confirmed to me that the $1.1 million for the irrigation project was coming from the CCF. But can we be confident that the Town Manager will respect the Council wishes of pay-as-you-go and not spend the $1.1 million unless and until the CCF has the money as a positive balance? Are you confident that this will happen?

A Capital Fund Smokescreen
When I inquired where the funding was coming from for the $750,000 to correct ADA issues, the Town replied that it was coming from the Capital Fund. I believed this response to be a smokescreen so I continued the conversation and inquired, “What is the difference between the Capital Fund and the General Fund?” The Town responded: “Generally speaking, in most instances projects budgeted in the Capital Fund can be assumed to be funded with General Fund resources. Exceptions would be projects that have associated grant or intergovernmental funding or outside contributions associated with them.”

$3.3 million in General Fund withdrawals for a “turn-key” operation
Remember, we have already withdrawn $1 million from the General Fund in 2014 to purchase the property, another $1.2 million in 2015 to initiate the CCF, another $350,000 in 2017 to supplement the CCF, and now an additional $750,000 in 2020 for ADA upgrades for the Hiremath “turn-key” Community Center.. This adds up to $3.3 million in General Fund withdrawals for this purchase (of which only $360,000 has been returned back to the General Fund -- despite a promise from the Hiremath council to have paid back $600,000 by May 2020).

And don’t forget that between 2015-2020, you have also donated over $10 million of your sales tax dollars towards this “turn-key” operation.

And the Hiremath stench continues.

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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.

Contributor Opinion: Council Needs To Own The “Big Decisions"

After all these years, the Community Center is not ADA compliant 
But, we do have a traffic light  that cost $1 million, a monument sign ($85K), improvements to the driving range ($75K) and some information technology fixes ($50K).

The decision to spend on all of these things was made by town staff; not by town council.

Apparently, in the minds of town staff, ADA accessibility at the Oro Valley Community center is much less important to our residents than any of those things.

Look back to 2015

Click to enlarge

The town budget included a $1.1 million allotment in the Capital Improvement Program for the Community Center (See right panel). Approximately half of this allotment was to be used to address ADA and code compliance safety issues. Upon a request from then Councilmember Burns, the $1.1 million was broken down as to how exactly it was to be spent (See panel below).

Click to enlarge

On many occasions, the council at that time stated that Town Manager Caton and town staff were top notch professionals. Therefore, there was no need for the council to get involved in the details.

That council did not get involved in the details.

Staff was left to make the decisions.

Now, we see the results of their thinking.


Forward to 2020
Ask yourself...
Should staff be trusted with being the sole decider of Code decisions? Because that is what will happen if town council approves the staff’s Community Economic Development Strategy. The strategy includes requested Code changes that will allow for staff approval on items that currently require Town Council approval. Some that even now require community involvement will be curtailed.

We have historical evidence of what happens when you put too much trust in staff to do the right thing. Staff is there to support the Council and to carry out the Council’s policy. The Town Council must ensure that staff is complying with the approved policies.

The mayor and town council need to regain the helm and take charge of the Oro Valley government. And they need to do it now! Because the Council needs to own the big decisions.

The Watchdog Report: April 2019 Community Center Financials

The Community Center Fund (CCF) ended April 2019 with a positive balance of $698,301. Although a positive balance of this magnitude is a good sign, there are a lot of promised obligations that need to be fulfilled…and they’re not being fulfilled.

What happened to ADA compliance?
We have owned this property since May 2015 and it is still not ADA compliant. Why isn’t the Town Manager funding an elevator for the Community Center? Does anyone care about our citizens who are disabled and currently have to enter the building through the loading dock? What happened to the funding for ADA and Code Compliance and Life Safety Issues that was shown during the Power Point presentation in December 2014?

ADA and Code Compliance Life Safety Issues

FY 2014/15         $381,000
FY 2015/16         $445,000
FY 2016/17         $69,000
FY 2017/18         $142,000
FY 2018/19         $106,000
TOTAL              $1,143,000

Greg Caton (Town Manager in 2014) promised that between FY 2014/15 and FY 2018/19 that the Town would spend $1,143,000 to remedy these issues. Fiscal year 2018/19 ends on June 30th and to-date the Town has spent ZERO on ADA compliance.

What happened to paying back the $1.2 million dollar loan?
In 2015 the Town Council borrowed $1.2M from the General Fund to start the Community Center Fund with a promise to pay back $120,000 per year for 10 years. There has been no transfer of the promised annual $120,000 from the CCF to the General Fund.

Gains and Losses
Troon lost $85,220 in April 2019, bringing their losses to date to $1,267,303.

The Overlook lost $2,232 in April bringing its total losses so far this fiscal year to $89,679. Since the Overlook opened in 2015 it has lost $556,141. Of interest is that four years into this endeavor they are still losing more than what they've budgeted to lose. Budgeted losses YTD were $58,712. Actual losses YTD are $89,679. (Difference of $30,967).

The Town part of the investment (fitness, recreation, swimming) made a little over $125,000 as of April 2019. There is nothing wrong with the Community Center part of the investment; it is golf that continues to be a financial drain on the Town. So far this fiscal year your sales tax revenues dedicated to the Community Center and Golf amount to $2,033,576 (as of April 2019).

Looking ahead
I recently submitted a Freedom of Information request asking for the number of employees assigned to maintain the golf courses, including supervisors and mechanics, and the total water usage for 36 holes (either in gallons or acre feet). The Town responded that they did not have the requested documents because these items are not broken down individually. I’m not sure if this is stonewalling or irresponsible management. How can the Town not know how much water is utilized or how many employees are utilized for golf maintenance? I am trying again with a revised submittal.

I am currently working on a plan for an 18-hole, strictly municipal model for golf. Town Manager, Mary Jacobs, seems to be leaning towards the 36-hole model if the adjacent HOA’s supplement the Town via increased HOA dues. The recently passed budget still includes the Overlook and the 36-hole model. One wonders what it will take to get the Town Manager to understand that the current model for golf is not working.
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Mike Zinkin 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. He was a commissioned ensign in the United States Navy Reserve. He was an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009 and the Board of Adjustment from 2011-2012. He served on the Town Council from 2012-2016 during which time he was named a Fellow for the National League of Cities University, he was a member of the National League of Cities Steering Committee for Community and Economic Development, and a member of the Arizona League of Cities Budget and Economic Development Committee.