February Community Center FinancialsLate on Tuesday, April 18th, the Town finally published the financials for February…one day prior to the April 19th council meeting. Historically, the Town publishes these numbers one week prior to the council meeting.
The Community and Recreation Center Fund (CRC Fund) ended January $514,403 in the red. The good news is that the balance at the end of February was only $477,986 in the red. So although the fund remains in a negative balance, the difference from January to February was a positive $36,417. Of course it will take a lot of $36,417 gains to completely wipe out the $477,000 negative balance.
As an aside, the CRC Fund still owes the General Fund $120,000 from last year (when the council decided not to make the scheduled reimbursement payment). They will owe an additional $120,000 back to the General Fund before the end of this fiscal year (June 30th).
Dedicated sales tax still not covering the losses (currently at $1.7 million)
The Town's portion of the CRC (fitness, swimming, tennis, etc.) show a loss of $122,704 through February. This is acceptable as there was never an issue with the Community Center concept.
However, Troon's losses (golf, some tennis, food, beverage, and merchandise) continues to be unacceptable. Through February, Troon's losses total $1,731,948. The dedicated sales tax revenues through February are $1,452,073. This hardly covers the losses.
Additionally, Troon continues to be off on their forecasts. They forecasted $32,158 in golf losses in February, but actually lost $110,264 (a $78,106 miscalculation). Troon forecasted to make $12,354 in food and beverage (primarily the Overlook), but actually made only $5,533 (a $6,821 miscalculation). The total losses for food and beverage are now $90,501.
How is golf trending?
Although February has been the best month of the fiscal year which began on July 1st, the fact remains that without the golf and restaurant losses, Oro Valley could start putting money into ball fields and other improvements at Naranja Park without looking for a secondary property tax to fund it.
Bed Tax Revenues are under budget
The Bed Tax Fund is now estimated to come in under budget by $45,000. We are in the prime time of year for bed tax (hotel) revenues. Is it that the HSL property (Hilton) is not performing as forecasted, or is it that the revenues that were expected from golf, swimming, and tennis tournaments have not come to fruition?
Why is this important? On June 20, 2012, town staff requested that Council allow for a withdrawal of $1,169,000 from the General Fund Contingency to allow the Aquatic Center facility to function as intended for both competition and recreational purposes. If the needed elements were not added at that time, they couldn’t be added later without incurring significant costs and operational down-time.
Of this additional $1 million withdrawal, $524,000 was to be paid back from the Bed Tax Fund over a 15 year period. In other words, we need $35,000 per year from the Bed Tax Fund in order to meet the obligation to reimburse the General Fund Contingency.
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 in 1969. He worked as an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley after retiring in 1998. Mike 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. During his time on council, he was named as one of 23 Leadership Fellows 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.
