Town Council Approves Shift of Half-Percent Sales Tax to General Fund

Council changes direction of sales tax revenue
Last week, the Oro Valley Town Council voted unanimously to move the half-percent sales tax revenue from the Community Center Fund into the General Fund, while maintaining the Community Center Fund through budgeted transfers from the General Fund. For years, these monies were dedicated to supporting municipal golf, the community center, and some other recreation assets.

Broadening its potential use to all town operations
While the decision may sound like a simple accounting move, it reflects a shift long in the making. The half-percent tax, enacted in 2015 to support early operational deficits at the golf course and community center, was projected to generate about $2 million annually. By 2021, revenues had already grown to more than $2.8 million, and in recent years annual collections have ranged from $2.9 million to $3.9 million, with FY 2025 projected near the high end of that range. Redirecting these funds into the General Fund means a substantial and growing revenue stream will now be available to support overall town priorities, not just recreation-related activities.

Fund will continue to need town financial support

Brings greater financial flexibility while retaining focus on golf and community center operations
Vice Mayor Barrett advanced the idea with the goal of giving the town greater financial flexibility while maintaining transparency about the costs of operating the golf courses and the community center. Barrett argued that this approach allows the Council to fund the community’s highest priorities—“whether that be parks, roads, or police facilities”—while also preserving transparency and historical continuity. “Residents want to know where the money is going, and this structure makes that clearer."

Only one resident spoke on this during the public hearing
This topic was a public meeting. In our June article on this we thought that there would be far more community spokespersons. Only one person spoke, however,  Matt Wood, who serves on the Parks and Recreation Advisory Board spoke in support of what was to be Council’s decision. Wood emphasized trust in the Council’s judgment to use the sales tax revenue wisely across the community. At the same time, Wood underscored that parks and recreation still deserve continued funding attention even under the new arrangement.

These sales tax dollars are pledged ("encumbered") to pay park bonds
Councilmember Mary Murphy floated the idea of “sunsetting the tax when the Naranja Park bond is paid off” so that revenues could eventually be returned to residents. This would be in about 15 years. Barrett noted that the town relies on these monies, pointing out that they not only cover bond payments but also pay for capital expenses, and operating deficits: “These funds are encumbered … they pay for the bond...and they support capital and deficit operations in parks and rec … that’s part of why it’s important that those funds remain.” 

Greene abstains with no comment or reason given
In the end, the Council approved Barrett’s motion by a 6–0 vote. Councilmember Green abstained from voting.  He did not speak on this matter nor did he explain why he abstained.  As a result of the vote, this year, all revenues from the half-percent sales tax will flow into the General Fund. The Community Center Fund will remain in place, with operations and capital needs supported by transfers approved during the annual budget process. This compromise preserves a record of past financial performance while giving the Council broader flexibility to direct revenues to the town’s most pressing needs.
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Guest View: Mike Zinkin ~ Is Oro Valley still a Town of Excellence?

 

Below is a timeline of how we went from a PROMISE to cut golf losses (with the possibility of closing at least one of the courses), to continuing to operate ALL of them on a pay-as-you-go basis (with no option for bonding), to the most recent decision of foregoing pay-as-you go in favor of bonding.

December 2014
On December 17, 2014, the Town Council, with a 4-3 vote, approved an increase of our sales tax from 2% to 2.5%. The ordinance (14-17) states that the purpose was to fund/supplement the needs of the newly purchased Community Center, with its 45 holes of golf, 2 swimming pools, tennis courts, and a 1980 style building. The ordinance clearly states that this new tax would generate “approximately $1.6 - $2 million dollars annually.”

November 2018
In November 2018, with over-development and golf losses being the two major issues, the Town’s voters decided to elect a new Mayor and Town Council. Mayor Winfield was elected with 9,242 votes and three new council members were elected with 8,000+ votes each. The newly elected Council majority pledged to do something about the golf losses.

What followed were numerous contentious meetings that included approximately 400 citizens who were passionately opposed to closing any of the existing 36 holes.

November 2019
In an attempt to soothe the pro-golf-courses crowd, Mayor Winfield moved on 11/20/2019 that:

“All golf course repairs and improvements to be funded on a pay as you go basis from the Community Center Fund. No bonding will be undertaken for community center improvements.”

In addition, the motion stated that, “Oro Valley will retain a $100,000 minimum reserve in the Community Center fund.”

How approximately 400 citizens were able to overturn the will of over 9,000 citizens is beyond me.

Fast-forward to 2021
The half cent increase in the sales tax is now producing about $2.7 million. This is $700,000 more than what was initially stipulated in the 2014 ordinance. So, what does our “fiscally responsible, citizen-centric” Town Council do? Instead of lowering the sales tax to continue to meet the original needs of $1.6 - $2 million, they decide to use the additional revenues (your tax dollars) to consider bonding.

In May 2021, Mayor Winfield motioned that the additional monies be utilized to BOND for all park improvements including exterior community center and golf course improvements.

So, in the 18 months from November 2019 to May 2021, our Mayor/Council switched gears and decided that now we are going to BOND for Community Center and Golf improvements. This is in direct opposition to what the same Mayor/Council mandated in November 2019. Where did the bonding idea come from?

The code of ethics for the International City/County Managers Association (ICMA), of which our Town Manager is a member , states in Tenet #6 to: “Recognize that elected representatives are accountable to their community for the decisions they make; [ICMA] members are responsible for implementing those decisions.”

Remember that the additional $700,000 currently being generated from the half-cent sales tax is your money. This tax could have been reduced and still continue to be utilized for its original purpose…to supplement the Community Center Fund. Now YOUR money is going to be used to make golf course improvements. Why? Because without additional bond monies, the Community Center debacle that came to us in December 2014 was bound to fail. Without bonding, the money is not there for building and golf improvements despite all of the past assertions that the half cent sales tax would cover all costs.

Time to retire the Town motto
As a result, Oro Valley should retire their motto that we are a “Community of Excellence.” Oro Valley is being run by the staff (who are not accountable to any Citizen). The staff originates and organizes all proposals and is not carrying out Council decisions. It seems that Oro Valley has become just like any other community, taking every cent possible from its Citizens and spending it irresponsibility.

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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 Planning To Add $43Million In Debt To Oro Valley In 2022

Two measures: $43 million

The Oro Valley Town Council has passed two measures in the past month that, if approved in the 202-22 budget, will add $43 million in debt to the town. One is the previously reported issuance of $17million in debt to pay down the town's police pension (“PSPRS”) unfunded liability. The other is the incurrence of up to $25million in debt to finance what was to be a ten-year parks and recreation master plan.This is a plan that council has not publicly heard or approved.

“Pay as you go” is out… debt is in

Approval of bonding for the parks plan will abandon this council’s stated position to use “pay as you go” for parks and recreation facilities. This is the position the council affirmed last year when it approved a five year plan to reduce the annual subsidy of municipal golf to no more than $750,000 within five years. Currently, improvements to that facility as to all facilities was to be paid from current fund proceeds. This has been the town’s practice since its inception in 1974.

Cheap interest rates drive both debt decisions

One stated justification for doing this measure is the same was used for supporting the PSPRS debt: “Interest rates are cheap.” The town has estimated that it will be able to issue bonds with a less than 3% interest rate. They may well be able to do so as there is currently a dearth of new municipal bond issues in the market. But, this level of borrowing is a lot for a town of our size. It could reduce the town’s credit rating unless it pledges the sales tax money as collateral on the loan.

Recent reduced golf losses and increased sales tax revenues also drove decision to borrow to fund parks and recreation facilities

In addition to cheap interest rates, there was added rationale given for borrowing to fund the parks: Losses on municipal golf are down because the new golf operator has done a better job of operating the course than the last golf operator; and half-percent sales tax receipts are up. The council expects that both of these events will continue indefinitely.

Measure “shares the wealth” generated by the half-percent sales tax 

The measure was proposed by Mayor Winfield and Vice Mayor Barrett. One of their stated objectives is to bring unity to the town by “sharing the wealth” through use of the half-percent golf sales tax. Barrett observed in her remarks during the meeting that the sales tax is paid by everyone and that, therefore, it should be used for the benefit of everyone. The language of the resolution (included in the panel above) does just that, proposing that bond funds be used to complete Naranja Park and improving other key parks facilities.  You can watch the Vice Mayor’s comments here.

Pending 2021-22 Budget Adoption

The bonding and the use of bond proceeds are included in the town’s tentative budget. Town residents will have the opportunity to opine on any item in the tentative budget in two upcoming town hearings. The bondings will happen in the late summer if they are included in the final budget.

Council To Consider Three Items Tonight That Matter To You

There are three items on tonight’s Oro Valley Town Council meeting agenda that are of particular importance to residents. We have previously reported on the three. Click the links if you want to learn more about each.

Broadening the use of the half percent sales tax

The council will consider broadening the use of the half percent “municipal golf- community center” sales tax subsidy. The resolution if approved, would free dollars from the Community Center Fund to be used to support other parks and recreation uses. This is important to you because it will allow the council to use these funds for activities like the build-out of Naranja Park, improvements at Steam Pump Ranch, and completion of the town’s trails system. These are all top priorities of Oro Valley residents per the survey conducted by the town last year. 

This is not a public hearing. That hearing was held at the last council session. The item had been listed on this agenda as a “hearing”; however, that word is now lined-out in the agenda. It may have been the intention of the town to hold a public hearing; however, it could not provide proper 15-day public notice in the “Daily Territorial” for this to happen.

The council conversation on this should be lively.

Study session on the “Town Manager Recommended Budget”
A study session occurs after the regular meeting adjourns. The session is the council’s first look at the 2021-22 Town Manager Recommended Budget. This session is important to you because it involves how your money will be spent next year. There are two big budget non recurring items. One is a decision on funding a $27million plan to pay down the towns public safety pension liability. The other is a decision on funding $26.7million in parks improvements. This includes municipal golf and community center improvements. Decisions on these and other items will be forthcoming in future meetings. Tonight and continuing tomorrow night, the council will hear about the entire budget. We expect department heads to present their request.

The presentations tonight should be informative.

Expansion of Oro Vista apartments
The expansion of the Oro Vista apartments is for building two two-story buildings built on the dirt lot next to Noble Hops Restaurant, facing Lambert Lane. The lot is currently planned for restaurant use. The request is for council to approve a change to the Master Development Plan for the site area and to approve the conceptual site plan.

The council will only discuss this proposal item if one of them pulls it off the consent agenda. Otherwise, it will get blanket approval. Some, perhaps all of the council members visited the site this past Monday. We will learn what they think tonight.

You can view the full agenda for the meeting here. That also provides a link to the zoom meeting.

Hornet’s Nest

 

Use of Half Percent Sales Tax Levy In Limbo

Solomon illness causes decision delay

Last week, the Oro Valley town Council discussed, but did not vote on broadening the use of the half cent sales tax. This tax is dedicated to the town’s golf and community center operation. It amounts to more than $2.6 million annually and its growing.

Winfield wants to broaden use of funds and issue bonds to pay for parks and recreation wants

Winfield’s intent is to used these funds together with potential bond financing “...for construction of parks and recreation, golf, and community center capital projects, and/or other uses as determined by council.”  

The specific measure would continue to dedicate about $2 million to golf and the community center; and use the remainder of sales tax revenues, about $800,000 for other facilities.

Statement of Mayor Winfield in support of measure

“I support broadening the use of half-percent sales tax to support priority town parks and recreation facilities, such as our town golf courses, the community center, Naranja Park, Steam Pump Ranch, Amphitheater School District Partnership, multi-use paths and, potentially, other priorities through bond financing. 

Incredibly, 93% of our community agreed that Oro Valley’s parks and recreation system makes our town a more desirable place to live, although not all residents use priority parks facilities. 

Even though the community is unified about the importance of our parks and recreation system, I believe the creation of the community center fund and the dedicated half percent sales tax, has created in effect “winners and losers,” fueling community division and hampering flexibility to fund the town’s parks and recreation assets, including the golf courses and community center.

For example, the town has owned Naranja Park for twenty years and it is only partially developed. Steam Pump Ranch was purchased by the town in 2004. Several of the structures are on the national register of historic places and urgently need restoration work. 

I believe it is good public policy to broaden the use of the half-percent sales tax to spread investment across multiple parks and recreation facilities. This includes the town’s golf courses, the community center, Naranja Park, Steam Pump Ranch and potentially other priorities.I believe this action will ultimately benefit the greatest number of our residents and help to unify our town. That’s why I support this policy decision.”

Other Parks and Recreation Needs

The town has completed its 2021 Parks and Recreation Ten Year Master Plan. The plan will be reviewed and, after some change, approved by council. The priorities of this plan are shown the panel above.

Public Reaction Mixed
This council item was a public hearing. Reactions of the twenty people who spoke were mixed. Those in favor felt that the town had many other important parks and recreation needs that were long ignored. Those against either did not understand the proposal, since it was not explained to them until after the public hearing; or felt that the golf courses and community center had needs that were supposed to have been met long ago. For example, replacing irrigation and making the community center ADA compliant.

Next step
The council will discuss and vote upon the broadening of use of the half percent sales tax at the May 5 council meeting.

Proposal To Be Heard On Broadening The Use Of The Half Percent Sales Tax Levy

Enacted in 2015, revenues support municipal golf losses

The Oro Valley Town Council will hold a public hearing on the half percent Community Center/Municipal Golf sales tax. That tax was enacted by the Hiremath Council in 2015 to pay for the substantial losses that were projected from operating the community center on the golf courses. The estimated amount of the half percent sales tax was $2million.

Sales tax revenues more than anticipated

As LOVE has reported over time, golf and community center losses have been huge; but, recently the losses have narrowed because the pandemic has increased golf course use. In addition, sales tax revenues have increased over the six years to an estimated $2.5million. 

Municipal golf’s exclusive use of revenues at stake

The public hearing will be held at next week’s council meeting. The proposal is to broaden the use of these funds to pay for other parks and recreation facilities, amenities and operations.

What is at stake here is what appears to be in the minds of some members of council and residents a belief that the half percent revenue stream belongs to the golf courses. For example, during one council meeting Council Member Solomon said something like: “We have the money from the sales tax, so let’s just open the Pusch Ridge course.” Some residents in favor of the measure wondered why the course wasn't getting its "share" of the revenues. 

Expect a large turnout at the hearing

There are some who will be upset about any change in the use of this money. These are people who live along the golf course. They lobbied successfully last year to keep 36-holes of golf operating. They wore “green T-shirts” to the Council meetings, spoke in great numbers. It appeared to some that this high level of participation intimidated the some members of council.

Council set target subsidy levels

The council decided, in 2020, to retain 36-holes of golf and to lease the Pusch Ridge facility. In doing so, they set a subsidy target level of $750,000 within four years. That would be beyond the sunset of Winfield council majority. If that subsidy level is achieved, $1.8 million in sales tax revenue from the half-cent levy would be available for other uses. So, it makes sense to either rescind these sales tax dollars or direct them to other use.

Change in use requires council resolution

The original resolution for the sales tax levy earmarked the funds specifically for the golf course community center. Thus any change in the use of those funds has to be approved through another revenue resolution of counsel. That’s the reason for the meeting.

The Town of Oro Valley: Municipal Golf's "Eternal Flame"

Sales Tax Golf Subsidy Promotes Irrational Decision on Golf and Tonight “They” Want More!

Green shirts to storm council
Tonight, the Oro Valley Town Council will consider going beyond the half cent sales tax levy to fund golf course improvements. It is not a question of whether to fund these improvements. It is a question of how to fund these improvements, either through borrowing or through the existing revenue stream..

Tonight, however, you will see, in council, the town owned golf course community flood the council chamber to convince council to borrow money to fix their course. Rather than being content with a victory that saw the town keep 36-holes of golf, they’ve chosen to keep pressing for everything.

They are so passionate about this, that one of them took out recall papers on the Mayor and Vice Mayor because both have said that they don't think that the town should borrow money for the refurbishments.

Like spoiled children, they are tethered to their beliefs without any consideration or caring to what yet added funding does to the rest of Oro Valley’s recreation. They may be good neighbors to each other, but they are most certainly not good neighbors to the rest of the community.

Oro Valley residents pay a dedicated half cent sales tax for golf
Oro Valley increased its sales tax by a half cent in 2015 to pay to operate its now municipal golf courses. This amounts to approximately $2.2 million annually. It is 20% of the Oro Valley local sales tax. It is the only recreational facility that has its own dedicated stream of income.

Oro Valley got this tax increase because a property tax was not an option
In conversations with LOVE In 2015, former Mayor Hiremath told LOVE that he wanted to purchase a community center and that the town needed added funds to pay for its operation. He told us that the options were a sales tax or a property tax. He said that he felt that the sales tax was the best way to go because people living out of Oro Valley would also pay for it.

Hiremath knew that residents would never approve a property tax to pay for his adventurous purchase from his major campaign contributor. So he circumvented public involvement by a 4-3 council vote.

Current Council never considered sales tax reduction
Lost in any discussion of the town's ownership and operation of 36 holes of golf a months ago was the fact that residents pay this dedicated half cent sales tax to support it. Lost was any consideration of whether is was fair for them to do so.  Only one council member, Vice Mayor Barrett, mentioned it during the six months of what seemed like endless and sometimes mindless discussion.

We asked Mayor Winfield how he thought people viewed paying this added sales tax. “It’s hard to say. Some people feel good about it. Some people don’t feel good about it. My interest is to reduce the tax subsidy. I would hope that we could get to point where we could reduce the sale tax or eliminate it.”

Apparently, the current council felt no need to even consider this factor in their deliberations at this time. After all, the tax is in place so why bother with it.

We wonder...
If these funds had not been in place, would not their decision have been different? That is, no half cent sales tax... perhaps 18 holes of golf at best, or, perhaps, no golf all. 

Guest View: LOVE Contributor ~ The Monty Python Doctrine, Oro Valley Edition

LOVE often hears from former Oro Valley residents who, despite leaving Oro Valley, continue to follow Oro Valley news via the LOVE blog. One former Oro Valley resident sent us the following parody on the golf course saga. And we know that all satire contains a little bit of truth.
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Remember the comedy routines of Monty Python some years back? They pointed out that it was common logic for the government to “steal from the rich and give to the poor” but they proposed that it is equally logical to “steal from the poor and give to the rich.” It must follow that the “Greenies” are devoted to the Python Doctrine since they demanded and expected that the entire town should get robbed so they can enjoy the luxuries of Country Club living.

But perhaps there is a way to easily satisfy everyone…

Thinking ahead, what about all the poor unwashed “non-member” golfers. They deserve a break as well. So just raise the dedicated sales tax from a half-cent to a full one cent. Now they are also in the Rich Class and happy!

On further thought, what about all the poor souls in the fitness classes, or those who play tennis or pickleball, or those who enjoy archery or swimming. They deserve a break as well. So simply raise the dedicated tax to 5 cents. Problem solved. Now all the physical recreation in Oro Valley would be completely free for everyone to enjoy.

Now we have a town of perfect harmony and no neighborhood fights. Mission accomplished.

Oh wait. I almost forgot this one. What about the hundreds of soccer moms, baseball moms, and football families? Or families with children in other youth programs. Surely, they can’t be left out of this package. So, raise the dedicated sales tax to 8 cents so every recreational need is met in this wonderful and caring place called Oro Valley.

And who can forget the “Once Was” crowd -- every Oro Valley resident whose home once was surrounded by beautiful desert views and all the wildlife that lived there, but who have now lost their tranquility and property values to wealthy land speculators and developers. We can’t leave these poor souls out of the equation. So let’s raise the dedicated sales tax to 10 cents and use this revenue to subsidize their property taxes. It’s the least we can do.

Now we are all in the Rich Class. Everybody wins!

Guest View: Diane Peters ~ The Royalty vs. the Peasants. Part 2.

Part 1 was published yesterday. If you missed it, please scroll down beneath this article to read it.
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Below is the speech that I’ve been attempting to give since July 24th at a Town Council Public Hearing or during the Call to Audience.

Mr. Mayor and Council,

Although my husband and I don’t live near the golf courses, we understand the concerns of the people who do. They purchased their homes expecting that they would always have a golf course view. They are now understandably concerned about what will become of their views and property values if the courses are closed. But those residents aren’t the only ones affected by a change in their views.

We purchased a home with desert views. All the undeveloped land surrounding our home was zoned for low density rural residential. So, we expected that when that land was eventually developed, that it would be low density, one-story homes on very large lots…and our magnificent desert views, the peace and quiet, and all the wildlife would remain. That’s what we bought.

But over the years, developers got all that unspoiled desert rezoned down to much smaller lot sizes, including tiny mass graded lots with 2-story homes.

If that’s not enough, the road behind our house was a quiet 2-lane road with dirt shoulders. There were no traffic lights, streetlights, or sidewalks. Today, that road is being turned into a 4-6 lane main road with multiple traffic lights, a concrete median, and sidewalks. But wait…there’s more. We’re also getting the addition of twelve, count ‘em twelve streetlights at the intersection near our home.

Residents along the golf courses stated that they purchased their homes along the golf courses for the following reasons:

• the beautiful views
• the tranquility
• the serene neighborhood
• the abundant wildlife

And they’ve made the following arguments for what will happen if the golf courses are closed:

• the ambience they paid for will disappear
• digging up the courses could subject them to Valley Fever
• closing the golf courses would be a pretty dramatic hit both visually and financially
• it will transform an esthetically pleasing landscape into something far less desirable
• it will result in a dramatic reduction in their home values

Now replace the words “golf course views” with “unspoiled desert views” and you will understand our situation.

So, our question is, why should their property values be deemed more important than mine or anyone else’s?

Our neighborhood has changed drastically and yet we’re being asked to subsidize the views for residents living in another neighborhood. Where are the tax subsidies to maintain our views, our peace and tranquility, our property values?

Since 2015, residents who have lost their views and property values due to rezonings and unbridled development have been forced to pay an increased sales tax to maintain the views and property values of other residents, and in doing so, the former mayor and his majority council turned Oro Valley into what I call -- The Royalty vs. the Peasants. The Royalty has been given hours upon hours of time to present their case at numerous town meetings. Tonight, I’m speaking as one of the peasants.

It seems to me that an equitable compromise would be a combination of 18-holes of golf, natural open space, walking trails, and maybe a park. Then everyone gets something for their tax dollars. That’s a lot more palatable than caving in to the Royalty’s demands for special treatment and millions of dollars in public support to protect their lifestyle and their views.
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Diane Peters has lived in Oro Valley since 2003, moving here to escape the humidity of the East Coast. She’s been involved in OV politics and development issues since 2006. In 2014, she organized a citizens group, Citizen Advocates of the Oro Valley General Plan, who over a 9-month period, successfully negotiated a controversial 200-acre development project. In her past life, she worked in medical research at various University Hospitals in New England. Her interests include reading, writing, nature photography, travel, art galleries, museums, and politics.