2027 TMRB: Where $130 Million Is Going To Be Spent...$74 Million On Essential Operations

This is the second of LOVE’s articles on the Town Manager’s Recommended Budget. Last week, we focused on six key revenue and forecasting variables that could determine whether the budget succeeds financially during the coming year. This week, we focus on spending: Where does the Town plan to spend the approximately $130 million budget next year?

Capital spending is the largest budget item: $26.6 million
The Town plans to spend about $26.6 million on capital projects next year, about 20% of the total budget. Finance Director David Gephart told Council the focus this year is on “established needs for the community… not a list of wants.” Much of the spending reflects projects already approved and underway. The capital plan is significantly smaller than in recent years because several major projects have already been completed.

Most capital spending is focused on water and roads
According to Finance Director Gephart, about 31% ($8.2 million) of the Town’s $26.6 million capital budget is planned for water infrastructure and another 31% ($8.2 million) for streets and roads. Parks and Recreation accounts for about 13% ($3.5 million) of planned capital spending, public facilities another 13% ($3.5 million), public safety projects about 9% ($2.4 million), and stormwater projects about 3% ($800,000).

Public safety functions total about $23.3 million

The Police Department, Town Court, and Town Attorney’s Office report directly to Council. Together, they account for about 18% of the budget. Police spending alone totals about $21.2 million. Police Chief Kara Riley told Council the proposed budget maintains current service levels and was prepared with a fiscally conservative approach. Chief Magistrate Hazel stated confidence that the court can continue operating within its proposed funding. The Town Attorney’s approximately $1 million budget was not reviewed during the study session.

The water utility represents another 13% of spending
The Water Utility operating budget totals about $17 million, roughly 13% of total spending. Unlike most Town operations, the utility is financially separate and supported through water rates and fees rather than general taxes. Water debt, including borrowing for the Northwest Recharge Recovery Delivery System project (NWRRDS), is repaid through water revenues. Those costs are not included in the operating budget. Instead, debt payments are included in Debt Service and NWRRDS construction spending is included in the CIP budget.

Public Works and Highway Operations account for about 12% of spending
Public Works and Highway Operations total about $15 million and include streets, drainage, transit, fleet maintenance, and related operations.

👉

Most residents consider public safety, water, and roads to be high priority essentials. This year's budget reflects that. Together, these three areas represent about 71% ($18.8 million) of the Town’s capital program and about 43% ($55.4 million) of the Town’s total planned spending next year. Combined, spending on essential services in this year's budget is $74.2 million. That's 57% of the budget.

Parks and Recreation accounts for about 13% of spending
One of the things that stands out in this budget, and in reviewing earlier Town budgets, is how much Parks and Recreation spending has grown over the past decade. Ten years ago, Parks and Recreation spending was about $2 million, accounting for roughly 2% of the Town’s approximately $92 million budget. Today, Parks and Recreation operating expenditures total about $16 million. This includes parks maintenance, recreation programming, aquatics, the Community Center, and tennis and golf operations. About $9 million of these costs are offset by user fees and related revenue, much of it from golf operations. That leaves net spending of roughly $7 million. Compared to ten years ago, that represents an increase of about 350%, equal to a compound annual growth rate of approximately 16%. (Note: Ten years ago, some park maintenance functions and related expenses were budgeted in Community Development and Public Works rather than Parks and Recreation.)

Other departments account for about 11% of spending
The remaining spending is spread among other Town functions. Information Technology totals about $5.9 million, Community and Economic Development about $4.2 million, and Town administration and other departments about $4.2 million. The balance includes Finance, Human Resources, Town Clerk functions, elections, insurance, and other support activities needed to operate the Town.

Debt service and contingency total more than $16 million
The Town plans approximately $8.7 million in debt service payments next year, along with about $7.7 million in contingency funding. Combined, those two items total more than $16 million, or approximately 13% of the total budget.  

Budget categories overlap in some areas

Exact budget by department is are is challenging because the Town budget includes fourteen separate funds. Transfers among those funds, totaling more than $14 million, make the budget difficult to follow. However, the departmental spending categories as we have presented them appear to be reasonable approximations of where the Town plans to spend its money next year. As a result, our analysis could not identify $3.3 million in spending of the $130 million total.

Next week, LOVE will take a closer look at 2027 TMRB personnel spending and staffing levels.

- - -

Note: A Town budget chart included in the staff presentation to Council and LOVE’s chart categorize debt repayment differently. LOVE shows total debt service as a single category. The Town, however, allocated some debt repayment to the operations that incurred the debt, such as the Water Utility and Parks and Recreation. While that may be technically correct from an accounting standpoint, we believe it understates the amount being spent on debt repayment and overstates the amount that will be spent on Town operations.

- - -

Town Council Approves "Town Center" Amendment...Limited Housing...Lots Of Open Space

Council approves two related actions
The Oro Valley Town Council voted Wednesday to approve two related actions for the Town-owned portions of the Oro Valley Town Center property near Oracle Road and Pushview Lane. Council approved a general plan amendment for part of Area 4 and a PAD rezoning amendment for portions of the former Rooney Ranch property. 

Provides for significant opens space...
According to Town staff, the approved plan increases permanent open space from 69 acres to about 88 acres, about 78 percent of the subject area. It also eliminates 77 previously approved single-family lots in Area 4 and increases the buffer to nearby El Conquistador patio homes from about 100 feet to 350 feet. Staff also said the plan reduces building heights on the Town-owned portions of the property, including removal of a previously allowed 75-foot hotel entitlement.

... and a more restricted residential housing plan
The general plan amendment was approved unanimously as presented. The PAD rezoning amendment, however, was changed during the Council meeting. It was passed 5-1. Mayor Joe Winfield amended the motion to restrict Area 3 to one- and two-story ownership townhomes. That removed the apartment option from the plan. The motion also limited linear commercial height in Area 2B to 30 feet, including architectural features.

...which means that the council left "money on the table" in order to accommodate residents
That change highlighted an issue also raised the previous night during Planning and Zoning Commission discussion. They discussed this. It was their conclusion that limiting the residential use to just town homes  could reduce the future value or marketability of the property. They also felt it was too restrictive of future council options.  Council Member Josh Nicholson echoed their thoughts regarding reducing market value. Nicolson, who owns and operates apartments, said apartments could potentially generate greater land-sale value for the Town than townhomes. He said an apartment project could produce about $5 million in taxpayer revenue, compared with “just a couple million” from townhomes.  Council Member Nicolson, however, did not agree. He was the lone no vote.

Mayor Winfield felt that trade-off was a good one...
Winfield, however, said staff had spoken with developers who expressed support for ownership townhomes. He did not address the value issue. He also said he believed that type of housing would be supported by a majority of residents. His motion made clear that he wanted a more limited residential product than the one staff had brought forward; that he placed more value on lower intensity development. 

...as most on council agreed
Though there was disagreement on this, council, nevertheless, voted unanimously to approve the motion. One member told us that "The only reason I did not push back (on Winfield's motion) what that it was a reasonable compromise. I was very happy with the fact that we were able to get almost 80% open space." 

Residents got what they wanted...lots of open space... restricted residential housing
Residents who spoke at the public hearing offered differing views. Some urged the Town to preserve the property as open space because of its scenic location and importance to the character of the area. Others supported the revised concept because it increases open space, reduces building heights, and removes the previously approved single-family lots. In the end, their views were clearly considered. Council moved the project forward, but with a more restrictive residential limit than originally proposed.
- - -
Want to learn more? Read previously LOVE reports.

Bits and Pieces

Catalina Foothills group opposes Oro Valley annexation efforts

During the public hearing on Oro Valley’s Path Forward General Plan, this past Wednesday, Tom Pugh, speaking on behalf of the Catalina Foothills Association, urged Oro Valley officials to stop pursuing annexation efforts involving nearby unincorporated areas. Pugh said the association represents more than 1,700 homes and does not want to become part of Oro Valley. He stated that letters expressing those concerns had previously been sent to the Town and asked Council to respect the wishes of residents living in the Catalina Foothills area.

Unused Preserve funds redirected to pond irrigation and ADA trails
The Oro Valley Town Council voted Wednesday to use about $150,000 in unspent fiscal 2025-26 Vistoso Trails Nature Preserve funds, plus $50,000 from next year’s allotment, for plant and turf irrigation in the pond area as part of the pond restoration project. Council also approved use of a $136,210 Arizona State Parks grant for ADA trails in the same area. Supporters said doing the irrigation work now, while the pond is being built, would be more cost effective and would make it easier to complete other improvements later. 

Council approves Stonegarden Grant funds for police night vision equipment
Wednesday, the Oro Valley Town Council unanimously approved participation in the Operation Stonegarden grant program, authorizing the Police Chief to enter into an agreement with the Arizona Department of Homeland Security to receive up to $38,808 for equipment. The funding will be used by the Oro Valley Police Department to purchase night vision goggles to support regional law enforcement efforts, including coordinated deployments with U.S. Border Patrol aimed at reducing human trafficking, smuggling, and related criminal activity. The grant is reimbursable and tied to specific federal requirements, with the equipment intended to enhance officer effectiveness in targeted operations.

Town extends agreement with Pima County for animal control services

Also Wednesday, the Oro Valley Town Council approved a one year extension of its intergovernmental agreement with Pima County for animal control services, continuing the current arrangement from July 1, 2026 through June 30, 2027. The agreement does not include a direct contract payment amount. The service model is based on Pima County retaining licensing fee revenues and covering remaining costs through its own general fund, with no change to the existing terms. The extension allows Pima County to continue enforcing local animal control ordinances and providing sheltering and care services within Oro Valley. During public comment, one resident urged the Town to seek stronger enforcement response provisions for neighborhood complaints involving pet waste and animal control issues.

Town terminates contract legal services to consolidate under Town Attorney 

The Oro Valley Town Council approved termination of its contract with Mesch Clark Rothschild for Town Attorney services, following the establishment of an in house Town Attorney position, currently held by Steven Zraick. The change reflects a shift to consolidate legal services under a single office that reports directly to Council. According to the staff report, maintaining both a contract attorney and an in house Town Attorney created potential confusion over roles, raised ethical concerns about who provides legal advice, and could result in unnecessary costs. The contract termination was made by mutual consent and allows the Town to streamline how legal services are delivered going forward.

- - -

What Council's Approval Of The Trails Connect Study Means To You

Eighteen months in the making
On April 22, the Town Council voted 7–0 to adopt the OV Trails Connect Trails and Paths Master Plan, completing a year and a half planning effort. The plan reflects input from residents, trail users, and stakeholder groups gathered through surveys, trailside meetings, and workshops. The Council’s action adopts the plan as a guide for trails improvement and development for the next ten years. Funding will be considered over time as part of the town's annual budget process. (See LOVE previous reports)

Focuses on improving what residents already use
The plan covers a system that includes more than 100 miles of paved and unpaved routes. It focuses on maintaining these trails, not on building new ones. For example, it addresses pavement issues on multi use paths along roads like Tangerine, La Cañada, and Naranja, improves safety at crossings, and fixes problem areas such as erosion, washouts, and blind corners on both paved and unpaved routes. It also introduces better ways for users to report issues so they can be tracked and resolved more consistently.

Closes gaps and extending key routes
The plan identifies several connectivity improvements. These include extending multi use paths along major corridors, most notably a continuous path along Rancho Vistoso Boulevard, and working with regional partners on a new northern extension of The Loop. The previous route was found not viable, so a new alignment will need to be determined. The goal is to make it easier to travel across Town by bike or on foot without using streets.

Changes include Vistoso Trails Nature Preserve
At the Vistoso Trails Nature Preserve, the plan calls for improving the existing paved path system, increasing access for users of all abilities, and adding clearer wayfinding and etiquette signage. These are the types of changes that would affect how residents move through and use one of the Town’s most heavily used trail areas.

Recognizes and manages well used dirt trails
The plan specifically addresses unpaved trails in areas such as Big Wash, Honey Bee Canyon, and Panorama Trails. Many of these routes have been used for years but are not formally designated. The plan proposes formally recognizing these routes, improving access, and adding signage to define trailheads and connections, while coordinating with State Land and regional partners where they extend beyond Town boundaries.

Creates better signage and navigation throughout town
Residents will see more consistent signage across the system, including directional signs, trailhead markers, and maps. The plan also calls for digital maps and tools that allow users to locate routes, understand connections, and even report maintenance issues. These changes are intended to make the entire system easier to use, especially for new or occasional users.

Watch for changes over time
The impact of this plan depends on what the Council funds each year. Early changes are likely to be smaller, such as improved signage, better trail access, and maintenance of existing paths. Larger projects, like extending multi use paths or adding connections to The Loop, will take more time and coordination with other agencies. Many improvements, especially on unpaved trails, will depend on partnerships and volunteer support. Over time, the plan provides a way to make steady improvements, with each year’s budget determining what residents see next.

- - -

2027 TMRB: Six Key Variables To Watch

Six key variables will determine whether the budget is met
Last night, Town Manager Jeff Wilkins’ reviewed his recommended budget for fiscal year 2026/27 with the Town Council. It was the first of two study sessions. The second will be tomorrow.  According to Wilkins, the budget is balanced and reflects a  conservative outlook. The plan maintains current service levels and aligns spending with revised revenue expectations. Based on our review of the budget,  success will depend on six variables, items should be followed throughout the year. 

1. Sales tax performance will be the primary driver
Sales tax remains the Town’s largest revenue source. The budget assumes a low growth rate based on recent collections. Because of its size, even small changes in sales tax performance can have a significant impact on total revenue. If collections fall below the budget, the budget will face pressure. If collections meet or exceed expectations, the Town will remain on track. 

2.  Construction-related revenue needs to be tracked
The budget assumes reduced residential permit activity and lower construction-related sales tax. This year’s estimate is significantly more conservative than last year’s projection, which, according to recent staff reports, is expected to fall short by about $4 million. This category has historically been one of the most variable sources of revenue and is difficult to predict. As a result, it should be closely monitored throughout the year.

3. Capital spending discipline...watching project specific contingencies
Capital spending is a key factor because of its size and flexibility. In this budget, capital and other expenditures total about $26 million, making it a significant portion of overall spending. Unlike operating costs, which are relatively fixed, capital projects can be changed, delayed, or expanded based on circumstances after the budget is adopted. Most capital projects include contingency funding to address unforeseen conditions, sometimes up to 20% of the project cost. As a result, it is important for the Council to monitor not only total spending, but also whether contingencies are used. Unused contingencies will increase fund balances.

4. And also keep track of the "general' contingency budget... its a big number

The budget includes a general contingency appropriation of about $7.7 million to address unanticipated costs and needs that may arise during the year. These funds are not project specific. They can only be used with Town Council approval, making them a direct policy decision rather than an automatic spend. How much of this contingency is used will have a meaningful impact on year-end results. 

5. Operating costs control imperative
Departments are expected to manage spending within current levels, with no new full-time staff added. The budget plans to control operating costs, Staying within these limits will be necessary to maintain balance.

6. State-shared revenue... an uncontrollable external factor
The budget also assumes modest growth in state-shared revenue, reflecting broader statewide changes. While this source is more predictable than local sales tax, it remains outside the Town’s control and should be monitored as part of overall revenue performance.

Monitoring these variables during the year will be a must
These six variables can be tracked throughout the year through regular financial reporting. Monthly revenue and expenditure reports, along with clear dashboard-style summaries, would allow the Town Council and residents to see how actual results compare to budget assumptions. Ongoing monitoring will help council identify emerging gaps early so that the town will have the time to make corrections if needed.

Next week: 2027 TMRB: Where $130million Is Going To Be Spent

- - -

Bits and Pieces

Town Manager to present $130 million recommended budget for next year
Town Manager Jeff Wilkins will present his recommended budget for fiscal year 2026/27 to the Town Council Monday. His request is for $130 million, about $21 million less than the current year. Of the total, about $22.7 million is for the Water Utility, which operates as a separate enterprise fund with its own revenue stream. The remaining spending is for all other Town operations, about $81 million, with capital and other expenditures making up the balance of about $26 million. The Town’s press release describes the budget as a “conservative” response to revenue and cost pressures, while maintaining core services. (Town of Oro Valley Media Release, April 30, 2026 and Town of Oro Valley, Town Manager’s Recommended Budget, April 24, 2026)

Stormwater fee increase begins July 1

The Town of Oro Valley will begin a phased increase to its stormwater utility fee on July 1, the first adjustment in ten years. The three-year plan raises the monthly rate from $4.50 to $6.50 per Equivalent Residential Unit, with residents expected to see an increase of about $0.67 per month in each of the next three years. Town materials state the increase is intended to support long-term maintenance and improvement of stormwater infrastructure and to maintain compliance with regional, state, and federal requirements. (Town of Oro Valley Vista Newsletter, April/May 2026)

Proposed 64 homes requires rezoning
On April 21, Town staff held the first of two neighborhood meetings regarding a proposed rezoning of a 15-acre site on the northwest corner of North Rancho Vistoso Boulevard and Vistoso Commerce Loop. The property is owned by Tom Warren, who purchased it in 2021. He is represented by Brian Underwood of The Planning Center, and the proposed builder is Meritage Homes. The applicant needs the town to rezone the property from campus park industrial to medium-density residential, consistent with its Town’s General Plan designation, so that he can develop up to 64 single-family homes. There will be a mix of one- and two-story units and access from both Vistoso Commerce Loop and Vistoso Village Drive. Neighbors attending the meeting voiced concerns including increased traffic and safety, loss of mountain views, building height and density, impacts to wildlife and neighborhood character, and whether the land should remain available for commercial use that could generate Town revenue. Next steps include submission of a formal application. Learn more about this project here.

Sun City Mayoral forum added local detail to mayoral race

Wednesday’s Sun City mayoral forum covered several topics not discussed at last week’s Chamber event. On improving paths and connectivity along Rancho Vistoso Boulevard, candidate and current Vice Mayor Melanie Barrett pointed to the Town’s adopted Trails Connect plan and identified funding sources. Candidate Mark Napier said he would gather resident input, evaluate needs, and then consider costs in deciding on any request in this area. Both candidates addressed a question on speeding in Sun City, citing enforcement as a key tool. Regarding Town staffing levels, Napier called for a staffing review, while Barrett noted that no new positions are planned in the current five-year forecast. Both candidates said they oppose data centers in Oro Valley.

Historical Society launches digitization project

The Oro Valley Historical Society is moving forward with a project to digitize its collection of artifacts, documents, and photographs. The effort is expected to take place over the coming months, with a new scanner recently purchased to support the work. The organization is seeking volunteers to assist with the project and plans to continue preparing new exhibits and programs for the fall season. If you are interested in helping, email info@ovhistory.org (Oro Valley Historical Society Board Meeting Minutes, April 23, 2026)

- - -

Guest View-Tony D'Angelo: Facts About Golf

Guest view: Facts about golf
I appreciate your post today regarding “pay to play.” There is no problem with a town subsidizing recreational amenities for its residents and to encourage economic activity from them. What we need to get past is this obsession with golf being some sort of bad thing for a community that enjoys the sport.

Resident survey shows interest
The statistically valid survey in 2020 documented that 20% of the residents value golf. That is significant when you compare it to the published national benchmark of 12%.

Early challenges noted
There is no question there were extraordinary costs in the early years after the purchase. The Town had no expertise in managing golf, we were in a recession, and the property had been neglected for years before the sale.

Rounds and revenue under Indigo
During the five plus years under Indigo Golf management, almost 583,000 rounds were played. When including revenues from the Overlook, the average round sold for $52.17. That is consistent with a municipal course.

Operating performance improved
After all operating expenses, the gross profit is $2.79 per round. Indigo’s first year showed a loss of $4.44 per round. Through February of this year, operations are generating $7.24 of gross profit per round. This reflects improved operating efficiency.

Capital investment explained
More than 80% of the capital spent was for the new irrigation systems on the 36 holes. Actual golf-related capital since the acquisition has been just over $11 million, not $25–30 million as has been suggested. The new system replaced a 40-year-old system and is expected to last decades while improving water use efficiency.

Capital treatment matters
Capital should be viewed as an investment and not as an operating expense. If capital is amortized over 30 years using a depreciation model, golf would be in the black by over $1.8 million during the Indigo period. The average allocation of a green fee to cover capital would be about $2.23, or roughly 4%.

Overall conclusion
This is a good example of how the Town confronted a challenge and is now managing it more effectively. Like any recreational business, there will be up and down cycles. The question is whether other pay-for-play amenities should be managed and marketed in ways that produce similar results.
- - -
Tony D'Angelo is a long-time Oro Valley resident and President of the Friends of Pusch Ridge Golf. He is Chairman of the town's Tourism Advisory Commission. The content is an email sent to us. We have published it with his permission.

LOVE's OVPathForward Primer... A Three Minute Read

Here's a quick look at the town’s proposed 10-year plan

Most residents are not likely to read the full OV Path Forward 10-year General Plan. It is a well-prepared detailed document intended to guide decisions on growth, development, services, and quality of life. Voters will have the opportunity to approve it in November. For those who want a quick overview, we are providing a brief summary of what the plan contains so you can decide whether to explore it in more detail.

Six Priorities

This is the vision of our town presented in a plan: “Oro Valley is a community where all residents have access to valued amenities, activities, services, and opportunities to live, work, shop, dine, and play. The Town maintains its strong sense of community by prioritizing public safety, natural beauty, scenic views, outdoor recreation, arts, and culture.” Items related to each of these priorities are threaded throughout the plan’s four major sections: Community, Sustainability, Economy, and Development. For example, public safety appears in the Community section through actions such as coordination with emergency service providers, while scenic views are addressed in the Development section through policies limiting building height and requiring design transitions. 

Here's a look at how the plan supports these priorities

Public Safety (Community Section)
Maintain police and emergency services, coordinate with regional providers
The plan places strong emphasis on maintaining community safety and emergency preparedness. It includes actions to maintain effective public safety services, support school safety, improve traffic and pedestrian safety, and coordinate with emergency service providers, including a specific action calling for partnership with local emergency providers to help ensure adequate fire and EMT services.

Natural Beauty (Sustainability Section)
Preserve open space, desert environment, and water resources
The plan prioritizes conservation of the desert environment and the natural features that define Oro Valley. It includes goals and actions related to wildlife habitats, environmental resources, dark skies, water conservation, and open space. It also supports protecting native vegetation, maintaining wildlife corridors, and expanding conservation areas.

Scenic Views: (Development Section)
Limit most development to three stories, protect view corridors
The plan includes specific policies intended to conserve highly valued community views. It honors the community’s preference for one- and two-story buildings and acceptance of three-story buildings on appropriate sites. It also limits most residential uses and certain common commercial service uses to no more than three stories, while requiring transitions and design measures to reduce the appearance of larger buildings.

Outdoor Recreation: (Community Section)
Expand trails, parks, and access to open space
The plan supports Oro Valley’s identity as an active, outdoor community. It includes actions to maintain and improve trails, parks, and recreational facilities, expand trail access and connectivity, provide accessible parking and access to trails and paths, and carry out long-term restoration work at the Vistoso Trails Nature Preserve. It also calls for continued assessment of park and recreation needs as the community changes.

Arts and Culture: (Community Section)
Support arts programs and potential cultural facilities
The plan calls for expanding and promoting arts and culture as part of Oro Valley’s identity and economic vitality. It includes support for arts programming, public art, historical and cultural education, and community events. It also includes an action to provide informational support to a nonprofit or other entity interested in establishing an arts, performing, humanities, or cultural center, with the expectation that such a center be financially self-sustaining and independent from the Town.

Access to amenities, services, and businesses: (Economy and Development sections)
Support business growth and places to live, work, shop, and dine
The plan aims to improve access to the things residents say matter most in everyday life. It includes goals related to business attraction and retention, tourism, housing variety, mixed-use development, gathering spaces, transportation connections, and parks and recreation. Together, these actions are intended to support more opportunities for residents to live, work, shop, dine, and play in Oro Valley.

And some other items
While most items in the plan align with these six priorities, some items address broader operational areas such as infrastructure, sustainability practices, and community programs that support how those priorities are implemented. Examples include transportation system planning and roadway design, land use mapping and zoning, air quality and waste reduction initiatives, and community programs such as intergenerational activities and senior-focused efforts. These items do not fit neatly into a single priority but provide the underlying framework needed to carry out the plan.

This plan is different than the last plan...Focuses on managing growth and enhancing quality of life, rather than accommodating new growth
This plan follows  the Town’s 2016 General Plan, a plan focused more on guiding growth, This plan but reflects a maturing community one that wants to manage that growth, preserve community character, and enhance amenities such as parks, trails, and gathering spaces. It also includes more specific actions tied to current priorities.

Each week we plan to provide a snapshot of each of the six priorities plus a look at the other items.
- - -
Next Thursday: A "Three Minute Dive" into what the plan says about Public Safety