$10.75 million of remaining ARPA funds yet to be designated for use
The Town of Oro Valley has $10.75 million in federal ARPA funds to designate for use. The town received these funds last fiscal year. The town has until the end of 2024 to assign these funds, obligate them to specific projects. The town must spend these funds by the end of calendar 2026.
The town received a total of $15.4 million of ARPA funds
The town received a total of $15.4 million of ARPA funds
This is truly a windfall. The town didn’t need this money. The Town of Oro Valley thrived financially during the pandemic. Many communities like Oro Valley are struggling to figure out how to spend all of the ARPA funds by the 2026 deadline. The panel [below right] shows the total funds received and how they have been used to date.
The use of $10 million of these fund is mostly unrestricted, It can be used for replacing town revenues lost during the pandemic
The use of $10 million of these fund is mostly unrestricted, It can be used for replacing town revenues lost during the pandemic
$10 million of these funds can be used on a broader basis to replace “revenue losses” caused by the pandemic. This money can be spent on a broad range of general government expenses. For example, some communities are spending the money on what one would call welfare payments. Others are using it to replace shortfalls in capital spending.
Town staff designated $4.65 million of these unrestricted funds to pay for replacing the town's El Conquistador and Canada Golf Courses' Irrigation
The total cost of the irrigation replacement on the town's two 18-hole golf courses is estimated to be $9.15 million. $4.5 million of this is being paid for from the $25million Parks Bond; the rest, $4.65 million, from the ARPA funds.
Town Council did not approve, by resolution, the use of the ARPA funds for that purpose
Nor has the Town Council designated the use of the remaining $5.35 million of unrestricted funds.
According to town staff, these funds are sitting in the capital improvement fund, waiting to be used to fund future capital projects. Town staff, without a formal council resolution, used $4.65 million to pay for golf course irrigation replacement.
The use of $5.4 million in ARPA in funds is restricted
These funds can be used to improve drinking water and wastewater infrastructure.
The town budget does not define the specific use of these funds. Thus, the town council must decide this. It is then the responsibility of the town staff to spend it as directed.
Until the town Council meeting of December 7, this council has not focused on fulfilling their responsibility. Thus, Council Member Tim Bohen, prior to and at that meeting, requested that staff to respond to eight questions that he asked regarding these funds. Town staff responded.
None of the restricted funds have been obligated by the Council
Town Council has not directed staff on how to spend the $5.4 million in restricted funds. LOVE has advocated that the town use theses funds to extend the reclaim water system to the south part of town, thus saving millions of acre feet of drinking water from being used on town parks. The town council rejected this at the last meeting, preferring to wait for the answers to the eight questions asked by Bohen. The answers given by staff don't tell the council how to spend these funds; but their response did clarify one thing.
Town Outside accountant confirms that restricted funds can’t be laundered through the water utility... so that they could be used for another purpose
The Town Council has been terribly misinformed regarding the use of the unrestricted funds for water. Town staff, under the leadership of former town manager Mary Jacobs, current town finance director David Gephart and with some misinformation provided by the town’s independent auditor, suggested laundering these funds through the water utility so that the town can use the funds for non approved purposes. The scheme was to lend money to the water utility, have the utility use it for an intended purpose and then to pay the loan back to the town. Then, the town could use the funds paid back for a non approved use. This is called money laundering. It is illegal. It is chicanery.
As it turns out, LOVE was correct when we identified this as a laundering scheme when Jacobs proposed it to Council in September. In one of the responses to Bohen’s request, the independent accountant recognized that the funds must always be used for the intended purpose, even if they are paid back. The independent accountant concluded this after consulting with a third party organization with which they have recently become affiliated. Frankly, we question the competence of the independent accountant.
The Town Council has been terribly misinformed regarding the use of the unrestricted funds for water. Town staff, under the leadership of former town manager Mary Jacobs, current town finance director David Gephart and with some misinformation provided by the town’s independent auditor, suggested laundering these funds through the water utility so that the town can use the funds for non approved purposes. The scheme was to lend money to the water utility, have the utility use it for an intended purpose and then to pay the loan back to the town. Then, the town could use the funds paid back for a non approved use. This is called money laundering. It is illegal. It is chicanery.
As it turns out, LOVE was correct when we identified this as a laundering scheme when Jacobs proposed it to Council in September. In one of the responses to Bohen’s request, the independent accountant recognized that the funds must always be used for the intended purpose, even if they are paid back. The independent accountant concluded this after consulting with a third party organization with which they have recently become affiliated. Frankly, we question the competence of the independent accountant.
Big question still remains: How to spend $10.75 million in remaining ARPA funds?
The clock is ticking. At some point, the council will have to obligate these funds or return them to the federal government.
