Water and Parks Dominate $37 Million of TMRB Operations and Maintenance Spending

Operations and maintenance costs are one-quarter of TMRB spending

Spending on operations and maintenance (O&M) is 25% of the 2023-24 Town Manager’s Recommended Budget (TMRB). The total amount is $36.6 million.

O&M up 6%

The TMRB O&M budget is up 6% because of inflation, according to the TMRB document. “In FY 22/23, the Town experienced considerable cost inflation in areas such as gasoline, public safety equipment, field supplies, technology, professional services and more across the organization. The Town has yet to see any measurable relief of inflationary pressures.”

Looking at the O&M budget “areas of further increase include software and technology, medical claims costs and Central Arizona Project water costs. Revenue increases due to inflation have helped to relieve some of this pressure, but nonetheless, it does place strain on resource allocation during the budget process.”

TMRB department budgets reflect most, but not all O&M spending
Detail department operating budgets contained in the TMRB show a total of $31.5 million in O&M cost. That's about $5 million less of the total that is $36.6 million in TMRB O&M spendings. The largest portion of this is the estimated $4.3 million payment to the town’s Benefit Self Insurance Fund.

More than half of the spending is in two departments

The Water Department O&M budget is 35% of the total. 

The budget amount is an increase over prior year for three reasons: 

• Increases in the amount of money the town is charging the utility for providing support services
  The town has substantially increased the cost of providing administrative support services to the water utility. The "actual" charge for this fiscal year is $993,268, The TMRB amount is $1,605,500. Thus, that cost goes into computing water rates, so it is a way for the town to get added revenues for its other services. This is not an independently, market-based alternative so there is no way to determine if the charge is "fair"
• Increase of CAP water wheeling and water delivery charges 
• Increase of cost of equipment repair and maintenance 

Detailed line item spending plans are not included in the TMRB. These are provided in a report which is called: “MUNIS”.  That document shows O&M cost increases in most areas. Water customers will pay for these costs through ever increasing water rates.

Parks (including the Community Center) O&M budget is 22% of the total

The TMRB lists five major reasons for the Parks and Recreation O&M increase:

• Planned use of outside professionals to develop the trails master plan 
• Cost increase of field supplies, water, and sewage
• Increased cost of call maintenance services
• Cost increase of special events
• Increase cost of utilities, supplies and building maintenance 

The MUNIS for this department shows other increases. For example, there is a doubling of the cost of using outside professionals in the recreation and culture program; increased maintenance cost of the Aquatic Center; and increased water and sewage cost increases for Parks.

We have included the Community Center as part of Parks and Recreation because it is! Community Center O&M costs are $5.3 million. That is more than three quarters of the Parks total O&M budget. Much of this spending is for the third-party management of the golf courses.

All other

The largest items of spending in all other departments is for fleet management (Public Works), telecommunications (Innovation and Technology), and advertising and marketing (Town Manager).

- - -