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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The Watchdog Report: Methods for financing the Community Center keep changing

 

A recent political ad
In a political ad in a recent publication, Mayor Winfield states: “The Town’s two golf courses are now projected to require no Town tax subsidy for operations in 2021/2022 fiscal year.”

However, the most recent financial report covers the current fiscal year through February, which is 66% of the way through the year. The statement shows that the contracted expenses overshadowed the revenues by $1,079,143. Mr. Mayor this is a loss. The fiscal year ends on June 30, 2022. The Town closed the Pusch Ridge and Conquistador courses in May so that should limit the losses, BUT the golf courses will still see a loss and will require the tax subsidy.

NOTE: LOVE reached out to Mayor Winfield who informed us that the Town updated the golf subsidy projection after he submitted his political ad, and that, “The most recent golf subsidy projection for this fiscal year is now $78,000.”

The Golf Courses: How does FY 2022/23 look?
Page 7 of the Town Manager’s Recommended Budget shows that the 2023 Community Center Fund (CCF) budget is forecasted to lose over $2.1 million. The Council borrowed/bonded for $25 million, half of which is to go to the Community Center. This bond has indebted the Town for 20 years for over $2 million/year.

The Town’s two golf courses are going to cost us over $8 million for irrigation improvements, $276,000 for cart path improvements, $105,000 for bunker and turf reduction, and $159,000 for golf maintenance equipment replacement all in FY 2022/23.

If the tax subsidy is no longer required, just where is all this money going to come from?

Answer: The Capital Fund is picking up the slack
The mayor tells us that the money is coming from the Capital Fund. However, the CCF was set up to support all the needs of the community center (golf/tennis/fitness/Overlook restaurant, recreation). Because there is not enough money in the CCF to support these needs, the money is now coming from a different fund.

NOTE: The mayor provided the following information to LOVE regarding the $8 million in golf irrigation improvements that will be taken from the Capital Fund rather than the Community Center Fund:

FY 2022/23
Golf Course Irrigation (Conquistador Course) - $4,630,000
Golf Course Irrigation (La Canada Course) - $2,350,000

FY 2023/24
Golf Course Irrigation (La Canada Course) - $2,000,000

The Bottom Line
The half-cent sales tax subsidy ($2 million annually), the HOA subsidies ($125,000 annually), and the $25 million bond are not enough, so additional money is needed which is now coming out of the Capital Fund.

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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.

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.

Guest View Mike Zinkin: The Ongoing Saga of the FY 2020/21 Budget

This article continues my review of the 126-page 2020-21 Town Manager’s Recommended Budget (TMRB). The “onion skin”, comparative line item detail by expense category, that I mentioned in that article was not in the submission. It will be forthcoming due to the action of some of our more responsible Council members. Until that happens, there are many more stories to be told with the information we have already.
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Town Manager Jacobs wants to remove restrictions on Bed Tax Revenues
On page iii of the Town Manager’s Recommended Budget (TMRB), Town Manager Mary Jacobs states that she will be asking the council to remove the restrictions on the Bed Tax revenues. Since bed tax is derived from hotel/motel stays, a certain percentage of the revenue is restricted to be spent on tourism projects (e.g. Visit Tucson). Bed tax should not be spent on general fund expenditures. It is a specific tax used for specific purposes.

Jacobs states: “This change results in the availability of $1.6 million of additional unassigned fund balance (above the $3 million mentioned earlier) that will strengthen even further the availability of reserves the Town can use to get through this crisis.”

Here’s an idea. How about responsible spending and reduced expenditures to get us through this “crisis?”

Paid employee health insurance for all town employees
On page iv of the TMRB, Jacobs recommends that since Town employees are not getting step/merit increases this year, that the Town should pay 100% of the premium for those employees who choose the high deductible health insurance plan. Page 18 of the TMRB shows that the plan is for the Town’s contribution to be $3.2 million and the employee’s share to be only $571,059. Question: How many employers in today’s world pay 85% of the employee’s health care? Answer: Very few.

Community Center upgrades take a backseat
On page 112 of the TMRB, she plans to spend $400,000 on the multi-use path around OV Marketplace. On page 114 she plans to spend $550,000 to restore the garage at Steam Pump ranch to be used as an employee office for the Recreation and Culture division. All this while not one penny is being spent to make the Community Center (a building we have owned for over 5 years) ADA compliant. Is it really more important to have more employee office space than it is to assist our handicapped citizens?

This is YOUR money. Shouldn’t your money be spent helping YOU?
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Bits and Pieces

Daily public access to Steam Pump Ranch in the offing
Town Manager Mary Jacobs is hopeful that the Steam Pump Ranch will be daily Oro Valley attraction. This after the town renovates once renovation of the garage on the property is done. She has included $550,000 for that. Once completed, staff will work from the facility. You can read more about this and other items in the TMRB here.

July 4th fireworks at Community Center
The town has cancelled its July 4 celebration but not the fireworks. “The good news is that we are still planning an epic fireworks show from the Community and Recreation Center. We will be using larger shells that will soar higher into the night sky,” said Parks and Recreation Director Kristy Diaz-Trahan. “We really wanted to host a July 4th celebration this year. This community needs it, but ultimately the decision is about public safety.” (Source)

Need sandbags for the monsoon?
"Beginning Monday, June 15, the Town of Oro Valley will provide free sandbags to residents who may need to protect areas of their homes from storm runoff during monsoon. Sandbags can be picked up [at Naranja Park] beginning Monday June 15, through the duration of the 2020 monsoon. Due to a limited number of supplies, only Town of Oro Valley residents are eligible, and there is a limit of 10 sandbags per vehicle. Sandbags are self-service; you will need to bag and load your own sand." (source)

Community Center and Aquatic Centers open Monday
"The Oro Valley Community & Recreation Center and Oro Valley Aquatic Center will be reopening on Monday, June 1, 2020." Doing this safely will be of primary importance. The town will be following county reopening rules.

The bad guys are back
One of things Chief Riley told us in our interview a few weeks back was that she expected shoplifting to be center state as retailers re-opened. KGUN9 showed a video of bad guys doing just that at Walmart this week. Take a look. Call the cops if you know these guys. Crime never takes a break.

Ben Coronado, Oro Valley resident, appointed Civilian Aid to the US Secretary of the Army
He was appointed on May 14 at Ft. Huachuca. "CASAs, a vital part of the Army, promote good relations between the Army and the public and advise the secretary on regional issues." Read about him here.

Guest View- Mike Zinkin: The "Devil Is In The Lack of Detail" in Town Manager's Recommended Budget

TMRB is incomplete and misleading
The Town Manager's Recommended Budget ("TMRB") is out for FY 2020/21. This document is incomplete and hardly gives enough information for the Council to make an informed decision.

I suspect that there are sitting Council members (the Hiremath holdovers) who have no idea that a lot of information is missing. The unfortunate thing is they probably don’t care or couldn’t be bothered with such details. After all, consider how many times we’ve heard them say that the staff gets paid to do this, they’re the experts, and we don’t need to get into the weeds.

The council needs to get into the weeds to understand this budget
In my years on council, I spent countless hours pouring through budget information. It was my job to do that for the people. You have to get into the weeds when it comes to understanding a budget, otherwise some spending will get a perpetual life. Some of these spending items were given life in the Hiremath years and really do need a hard look by the council majority.

Partial information
It's important that all areas be discussed completely. An example is the budget for amounts the town plans to contribute to other organizations.  "Page v" the TMRB states that the Town is budgeting $30,000 to give the UA for recruitment and support of new businesses, $275,000 (down from last year’s $300,000) to Visit Tucson, and $40,000 to the Greater Oro Valley Chamber of Commerce. All of this spending was ramped up under Hiremath.

But that is not the whole story. Because the town is actually planning to give away more.

It was only after I communicated with Town Manager Jacobs did I find out that: “The town manager message preface of the TMRB is intended to hit highlights and does not specify all expenditures. Additional details will be covered in the study session presentations."

So the TMRB didn't mention that a continued Children’s Museum contribution of $75K is included (General Admin), that continued membership in Sun Corridor for $10K is included (CED) or that  $25K is planned for the Southern Arizona Arts Council.

Why wouldn’t this be in writing in the document?  Was it an oversight, or was it that the Town Manager did not want the Council know about these additional expenditures?

 Detail Included In Prior TMRB Documents

"The devil is in the detail"
The TMRB has no pages indicating how each department is allocating their expenditures. In recent memory, all TMRB’s have included this kind of information; what I like to call “onion skin.” Onion skin details how much is spent on line items like travel, training, supplies, overtime, and vehicles.

When I questioned why this TMRB had no onion skin, the Town Manager replied: "We have a new CFO who is bringing new ideas, approaches and best practices to the budget development.  We look forward to hearing feedback from the Council on the new format.”

Ms. Jacobs, need I remind you that your new CFO works for you. Could it be you that does not want the decision makers (Council) to have all the information? Without this information, the Council cannot make an educated decision.

I could go on forever, regarding this TMRB
For example, Page 26 of the TMRB shows that there is a $3,000,000 bonding source for the Community Center. It wasn't even mentioned in the Town Manager's statement. Its just buried in a schedule. Seems to me that $3million in bonding for Community Center is something that should have been highlighted. Didn’t the Council mandate Community Center improvements were to be on a pay as you go basis. If so, just what is this for?

I have not completed my review of this 126-page document, but from what I have reviewed so far, this document is severely lacking. It appears to contain only the information that staff wants to present, but NOT the information needed for the Town Council to make an educated informed decision.

Update: 2019 Town Staff Salary Analysis

Last week, LOVE ran an article about the Town Manager’s Recommended Budget for FY 2019/20. The budget recommended salary increases for town staff based on a salary and benefit analysis that the Town recently conducted analyzing “comparable” jurisdictions across Arizona. If you missed it, you can read it HERE

Today we are presenting the list of cities and towns from the 2019 salary analysis along with population figures from the 2017 U.S. Census. The Town analyzed 13 cities/towns in the 2019 study. (They analyzed 11 cities/towns in the 2013 study.)

City/Town/County ------ Population 2017

Cities shown in blue were included in both studies.

Apache Junction. . . . . . . . . . 40,500
Avondale. . . . . . . . . . . . . . . . 84,000
Chandler. . . . . . . . . . . . . .  . 253,000
Flagstaff. . . . . . . . . . . . . .  . . 72,000
Marana. . . . . . . . . . . . . . . . . 44,800
Mesa. . . . . . . . . . . . . . . . . . 496,400
Peoria. . . . . . . . . . . . . . . . . .168,000
Pima County. . . . . . . . . . . 1,000,000
Queen Creek. . . . . . . . . . . . . 39,000
Scottsdale. . . . . . . . . . . . . . 250,000
Surprise . . . . . . . . . . . . . . . .134,000
Tolleson. . . . . . . . . . . . . . . . . . 7,200
Tucson. . . . . . . . . . . . . . . . . 530,000

Our Analysis
The 2019 salary analysis relies heavily on cities/towns in the Phoenix area.

The only towns with a population comparable to Oro Valley are Apache Junction, Marana, and Queen Creek.

Oro Valley does not have a property tax. The following cities/towns used in the 2019 study all have a property tax:

Avondale, Chandler, Flagstaff, Peoria, Queen Creek, Scottsdale, Surprise, Tolleson, and Tucson.

Therefore, the only towns in the 2019 study that are actually “comparable” to Oro Valley (similar population and no property tax) are Apache Junction and Marana.

The reason employees leave the Town of Oro Valley is not because of the pay and benefits. It is because of the working conditions. Former Town Manager, Greg Caton, eliminated the “360 Evaluation” which was a confidential way that employees could rate and discuss their superiors.  Of note is that Raytheon Missile Systems in Tucson, with over 10,000 employees, utilizes the "360 Evaluation."  They apparently understand that there is more to employee satisfaction than what’s in their paycheck.

Town Manager’s Recommended Budget (TMRB) for FY 2019/20 recommends salary increases for town staff

It’s déjà vu all over again
The Town recently conducted a salary and benefit analysis comparing Oro Valley town staff salaries with “comparable” jurisdictions across Arizona. How scientific was this 2019 study? Well, let’s take a look at the salary analysis that the Town performed six years ago.

In 2013, former Town Manager, Greg Caton, “contracted” a study of salary comparisons. The study compared Oro Valley to towns three times our size and all but one had a property tax.

Although Sahuarita and Marana were included in that study, they made up only two of the 11 communities considered. Eight of the 11 cities in the study were in Maricopa County and all have substantially larger populations than Oro Valley.

At that time, former Councilmember Mike Zinkin noted:

“Our employees are well paid and they deserve it [but] do they deserve to get paid as much as an employee in Avondale [or other Phoenix Communities]? The cost of living is much more up there."

Former Councilmember Bill Garner noted that:

“The salary study was flawed from the outset with much of the results suspect as many comparisons were done using cities and Towns much larger than Oro Valley.”

Nonetheless, in 2014, the Hiremath council approved a budget that allowed for an across-the-board increase in salaries that fell below the compared cities/towns. This, along with annual raises of 3.5 to 4% is what Oro Valley town employees have received. This does not take into effect other employee benefits such as health insurance and an on-site health clinic.

Below is a direct quote from the FY 2019/20 TMRB
“The Human Resources Director conducted a salary and benefit analysis recently among comparable jurisdictions across the state and the data show that Town pay ranges are below those in comparable communities and positions by an average of 9% overall. It is not financially feasible to adjust ranges by the full amount in one year. Ensuring the Town remains competitive as an employer will require a multi-year approach. Therefore, the Recommended Budget includes funding for a 4% adjustment to all Town salary ranges not covered by a negotiated agreement. Actual salary adjustments will only be given to employees whose current salary falls below the new range minimum, a cost of approximately $50,000. Town staff will continue to evaluate the plan and economic conditions in the coming fiscal year to determine next steps for FY 2020/21.

In addition, the salary and benefit analysis also revealed that the Town’s current annual merit increases are slightly above the average compared to our comparable communities. Over the past seven years, following three years of no raises for employees, the Town has offered merit increases of 3.5% for a successful annual evaluation and 4% for an outstanding annual evaluation. The Recommended Budget reduces those increases 25%, to 2.5% for a successful evaluation and 3% for an outstanding evaluation.”

It’s curious
In her narrative, Town Manager, Mary Jacobs admits that the Town’s annual merit raises have been above the norm. Therefore, if we brought the employee salaries up to “acceptable” standards in 2013, and their annual merit raises have been above the norm, how is it that we need to re-adjust the employee salaries again?

Adding it up
When you take the proposed one-time salary adjustment of 4% for FY 2019/20 plus the proposed 2.5% to 3% annual merit increase, the increases will average about 6.5%. Keep in mind that every time an employee’s pay goes up (whether by the annual cost-of-living raise or via a merit raise) the Town’s contribution into the Arizona State Retirement System also goes up.

The current Town contribution per employee is 11.8% of the employee’s salary. [Source: Arizona State Retirement System website – www.azasrs.gov]

Example: If an employee makes $100,000 a year, the Town contributes $11,800 a year into ASRS. When that employee gets a 6.5% raise ($6,500), he/she now earns $106,500 per year and the Town’s contribution into ASRS increases to $12,567 a year.

Guest View: Mike Zinkin ~ Combining the Community Center Fund Into The General Fund Is A Bad Idea

Town Archives, June 2012
In June 2012, the Oro Valley Town Council approved a withdrawal from the General Fund of $524,000 to help pay for cost overrides at the Aquatic Center. This money was to be paid back with annual installments of $35,000 from the Bed Tax Fund.

Fast-forward to 2018. Town Manager, Mary Jacobs (with Council approval) combined the Bed Tax Fund into the General Fund. Doing this eliminated the accountability of staff to ensure that the annual $35,000 reimbursement commitment is completed.

Town Archives, March 2015
On March 4, 2015, the Town Council approved a sales tax increase with this increase dedicated to the new Community Center and Golf Fund. (The name was later changed to the Community Center Fund). The Council Report reads, “… staff recommends Council consideration and approval of a budget amendment to establish a new, separate fund to account for the operations of these facilities. This new fund, called the Community Center and Golf Fund, will account for all revenues and expenses generated by the operations of these facilities.”

Fast-forward to 2019. In the Town Manager’s Recommended Budget for FY 2019/20, Jacobs is proposing to abolish the CCF and combine it into the General Fund. Doing this will eliminate all accountability regarding the expenditures of the “dedicated” half-cent sales tax. It will eliminate the monthly report which shows the revenues and expenditures regarding the Golf/Community Center. The Council should not allow this. The CCF allows for transparency and shows us exactly what it going on.

Examples of why combining funds is a bad idea
Do you think we would have discovered that the Town pays nothing for utilities, the extent of the golf losses, the lease contracts, etc. if this was all combined within the General Fund? The CCF owes the General Fund $120,000 a year (for 10 years) to pay back the $1.2 million loan that was used to start the Community Center Fund in 2015. Will this payback happen if they are combined into one fund? How would we know?

Next up, combining the Highway Fund into the General Fund
Jacobs also wants to combine the Highway Fund into the General Fund. Will this allow for highway money to be spent for soccer fields? Keeping these funds separate makes staff accountable and allows for transparency in town spending. We can see where the revenues are generated and where the money is spent.

We are not like most cities
Jacobs tells us that this is the way most cities do business. Oro Valley is not like most cities. We desire to keep an eye on our money…where it comes from and where it goes. Combining these funds into the less restrictive General Fund would be a huge mistake.

Guest View: Mike Zinkin ~ The $6 Million Dollar Bond

The “turn-key” Community Center needs another $6 MM in taxpayer funds
In December 2014, Town Manager, Greg Caton, plus Mayor Hiremath, and Councilmembers Hornat, Snider, and Waters insisted that the Community Center and Golf course purchase was a great deal because it was a “turn-key” operation costing only $1 million dollars and that no debt service would be required. Turns out that this has become just another one of their lies/broken promises.

Through a series of email exchanges with the Town, I recently learned that Town Manager, Mary Jacobs is recommending a $6 MM bond for Community Center expenses, with half to be spent in FY 2018/19 and half in FY 2019/20.

According to Finance Director, Stacey Lemos, the actual cost for this bond, assuming an interest rate of 5% over 20 years will total an estimated $8.7 million dollars.

A Budget Study session will be held on Wednesday, May 2nd at 3 PM in Town Council Chambers. Will the mayor and council consider approving a $6 million bond in order to save golf? We expect that they will since none of their previous efforts to finance the Community Center and Golf Courses have been successful.

The Repeated Lies and Broken Promises of the Town Council

• They promised that the half-cent sales tax increase would cover ALL Community Center costs. It hasn’t.

• They asserted that there would be no debt service. Yet, here we are, three years later, discussing a $6 MM bond for Community Center/Golf expenses.

• They lied when they said that only $1.2 MM would be taken from the General Fund Contingency to jump-start the Community Center Fund. As you will recall, they had to transfer another $350,000 from the General Fund last year to meet Community Center expenses.

• They lied when they promised they would pay back the $1.2 MM to the General Fund with $120,000 a year for the next 10 years.

• They spent $50,000 of taxpayer money on a Golf Study and then completely ignored the recommendations.

Mary Jacobs email stated the following:

“I point you to page iv of the Town Manager’s budget message that outlines how the recommended capital expenditure is being budgeted in FY 18/19.

In addition, the Recommended Budget includes half of the projected $6 million in total planned funding for capital improvements at the Community Center building as well as irrigation system replacement, turf reduction and other improvements on the Canada and Conquistador 18-hole golf courses. The expenditure will be financed via the issuance of a 20 year bond, and debt service will be repaid through the Capital Fund…..it’s a $6 million bond with HALF of it expected to be expended in 18/19, and HALF expended in 19/20.” (emphasis added)

Page 228 of the TMRB
Town Manager Jacobs has requested $3.6 MM for golf course repairs and $2.4 MM in Community Center improvements (TOTAL $6 MM) spread over two years and financed with a 20-year bond

The following information was obtained from Page 228 of the Town Manager’s Recommended Budget (TMRB).

COMMUNITY CENTER (CC) BOND FUNDED IMPROVEMENTS

                                                                     FY18/19                FY19/20                  TOTAL
Community Center Improvements              $1,200,000            $1,200,000              $2,400,000
Golf Course Irrigation Replacement           $1,800,000            $1,800,000              $3,600,000
TOTAL CC BOND IMPROVEMENTS         $3,000,000            $3,000,000              $6,000,000

The Town Council’s Community Center financing plan did not work
The additional half cent sales tax was supposed to offset ALL expenses for the Community Center, including golf, tennis, and the Community Center building. Instead, all of the sales tax revenue is going down the drain for golf. As such, there have been limited funds for capital improvements which is why the Town now wants to bond $3M in the 2018/19 budget and another $3M in the 2019/2020 budget.

How many more millions of taxpayer dollars are they going to spend on this endeavor before they admit that they made a mistake in purchasing the El Con Community Center and Golf Courses?
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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.