Resident participation in July’s community outreach meetings on proposed taxes and fee changes was limited. According to Finance Director David Gephart, about 30 residents attended across three online sessions focused on parks and recreation fees (July 9), new taxes (July 10), and the stormwater utility fee (July 15).
Gephart: Fee increases and new revenue sources needed because of rising cost of public safety and roads
Gephart told residents at the July meetings and the Budget and Finance Commission in August that new revenues are needed because costs are rising faster than revenues. Police services have grown 23% since 2021, absorbing 80% of General Fund growth. Road maintenance costs have more than doubled in the same period, increasing 107%. Meanwhile, sales tax revenues have been flat for three years, and a retail leakage study showed Oro Valley loses about $1.8 billion annually in taxable sales to surrounding communities, equal to $45 million in foregone revenue.
Gephart added that the stormwater utility fee currently covers only operations and not capital projects, while parks and recreation fees are being adjusted to better reflect costs. The goal of the proposed changes, he said, is to diversify revenues, reduce reliance on debt, and direct new funding toward capital projects such as police facilities, vehicle replacement, and road maintenance.
Resident outreach met with low attendance
Approximately thirty residents participated in the three sessions. Attendance was low and may not reflect the views of the broader community. Vice Mayor Barrett noted at a June study session that scheduling three meetings close together in July, a peak holiday and vacation period, may have limited participation.
Gephart: Fee increases and new revenue sources needed because of rising cost of public safety and roads
Gephart told residents at the July meetings and the Budget and Finance Commission in August that new revenues are needed because costs are rising faster than revenues. Police services have grown 23% since 2021, absorbing 80% of General Fund growth. Road maintenance costs have more than doubled in the same period, increasing 107%. Meanwhile, sales tax revenues have been flat for three years, and a retail leakage study showed Oro Valley loses about $1.8 billion annually in taxable sales to surrounding communities, equal to $45 million in foregone revenue.
Gephart added that the stormwater utility fee currently covers only operations and not capital projects, while parks and recreation fees are being adjusted to better reflect costs. The goal of the proposed changes, he said, is to diversify revenues, reduce reliance on debt, and direct new funding toward capital projects such as police facilities, vehicle replacement, and road maintenance.
Resident outreach met with low attendance
Approximately thirty residents participated in the three sessions. Attendance was low and may not reflect the views of the broader community. Vice Mayor Barrett noted at a June study session that scheduling three meetings close together in July, a peak holiday and vacation period, may have limited participation.
Residents who participated raised concerns about fairness, timing, and process more than about the size of the increases. Parks and recreation questions focused on whether fee changes treated age groups and activities equally. At the new taxes session, participants questioned the need for new revenues now, discussed the possibility of a property tax, and cautioned against rushing decisions before full engagement. At the stormwater meeting, comments focused on development practices near washes and a preference for smaller, steady increases.
Gephart also reported on business outreach
Gephart has met with the Oro Valley Chamber Board, Roche, and other representatives. A Chamber-hosted forum is scheduled for September 11. The Chamber suggested a property tax would be fairer, questioned whether the proposed revenues would be sufficient, and urged more business-friendly policies. Roche’s main concern was the telecom tax, while small businesses and residents expressed worry about the commercial rental tax and its impact on already high rents. Gephart said these discussions have been helpful in identifying concerns.
Budget and Finance Commissioners’ question the rental tax
Commissioners asked Gephart several questions during the August meeting. Gephart said a commercial rental tax would be difficult to pass, and noted that Council had previously advised staff to avoid relying on this tax. Commissioners also noted that higher rents in Oro Valley compared to Tucson and Marana could make such a tax unfair. Gephart acknowledged Oro Valley rents are higher but said the tax would create equity since the Town currently collects nothing from many services such as medical offices and storage facilities.
Commissioners shifted their attention to a tax change not on the agenda: a small sales tax increase. Gephart said that might be considered later as a “step two,” but the first step is to adopt the three tax categories used in neighboring towns. Commissioners also asked about the reliability of revenue estimates. Gephart noted the use tax could generate between $900,000 and $1.8 million annually but is volatile. He acknowledged that if revenues came in low, the Town might need to consider additional measures in the future, but said possible relief could come if required police pension contributions decline.
Gephart: Revenues intended for capital items
Gephart emphasized that revenues from new taxes are intended for capital needs such as improvements at the newly purchased police facility, police vehicle replacement, and continued road maintenance. At present, only stormwater utility fee revenues are legally dedicated to the Stormwater Utility Fund. All other new revenues would go into the General Fund, and Council would need to act if it wished to dedicate them specifically to capital purposes.
Gephart targets October for council vote
Gephart hopes to present a firm vetted proposal to Council in October. This would follow the planned September Chamber forum and review by relevant commissions (the Budget and Finance Commission, the Parks and Recreation Advisory Board, and the Stormwater Utility Commission). Council is expected to discuss the proposals at an October 1 study session, with a possible vote on October 15.
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