As 2023 Budget Is Being Developed, Here's What To Look For (Part 1)

2023 Budget underway
The Town of Oro Valley is preparing the 2022-23 budget. The process started in February with a strategic planning session with town council. The process ends in June when the town council approves the budget. In between, the town manager will submit a recommended budget. There will also be opportunities for residents to opine on the proposed budget

Record setting spending expected
We suspect that the 2022-23 budget will be "record setting" in terms of spending for two reasons:

• The town will be spending some of the $25 Million in Parks Bond money borrowed last fall.
  Tonight, Town Council will be briefed on the status of that spending. The timing of that spending will have a one-time impact on increasing the capital projects spending for the next two years.
• Spending on town operations will increase.
  This is because of added spending to maintain the existing and the new parks the town will operate. This includes the added cost of maintaining the "to be named" Vistoso Nature Preserve. In addition, the town has engaged a consultant to do a "Comparative Wage and Beneifits Study." This study will be completed in time for the results to be included in the recommended budget. The town conducted a similar study in 2014 that resulted in large increases in wages and extended benefits for town staff.  Add to this the fact that extreme inflation has ballooned the cost of everything.

Total pending is $153.7 million this year
According to a town created chart, the budget for this year, which ends June 30, is $163 million. The town published budget is $153.7 million. We think that the difference relates to spending on capital projects ($5.1 million less) and contingency reserves ($5 million less).

Spending on town operations is $91.1 million this year
Town spending has three major components. Each one has very different characteristics in terms of the level of control a council can have over the spending:

• Spending to pay the cost and retirement of debt ("Debt Service") incurred by the town is fixed. The debt must be paid or retired per borrowing terms. The only control the council has on this spending is their authorization to incur the debt. This year, the council approved more than $50million in debt issuance. The cost of debt service will likely increase in 2022-23.
• Spending to pay for capital projects is almost entirely discretionary.  For example, this year the current council authorized millions in spending on the town's parks facilities.
• Spending for town operations is primarily under the control of the town manager. OroValley Town Manger Mary Jacobs has said that it is the town council's job to set policy. It is Jacobs' job to implement that policy. The town operations budget is town manager's implementation of that policy. 

We will continue our discussion of the budget in future articles. Next up: A look at spending on town operations.

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