Council Appropriates $3.2 million More For Naranja Park Buildout

Council appropriated $3.2 million reserves for Naranja Park Buildout
On November 16, the Oro Valley town Council appropriated $3.2 million to “complete” the build out of Naranja park amenities. The approval is exactly what Town staff wanted and includes all of the value engineering changes town staff recommended.  In addition, the council earmarked $509,000 of development impact fees to cover the overrun.

Bond project items that will not be funded at the moment are detailed in our posting of November 16. These will be subject to “pay as you go” spending. 

Nicolson: Sports Tourism is "front and center"

One of the key areas considered by the Council was sports tourism. This concept was introduced to council by former Mayor Hiremath. Councilmembers Nicolson and Jones-Ivey want a world-class pump track that can be used for competition. They think that it will bring people from out of town who will stay in the hotels that have yet to be built. During the one hour discussion, Nicolson, focused only on the pump track. He spoke of nothing else. Clearly, Nicolson wants his pump track.

Musette Drive Connection from Tangerine

Barrett: Borrowing was a good deal when we did it

Vice mayor Barrett commented several times during the meeting to justify why borrowing money to finance the park was good idea. The town received a favorable interest rate on the $25 million in borrowing. The amount of funding to build out the amenities was estimated to be $33 million. Yes. The amount ballooned to well over $50 million, Barrett noted. 

Mayor Winfield claimed that there was no way to predict the overrun

According to Winfield, the original estimate was provided by an engineering firm. This is not the case. It was provided by a Parks Consultant. In addition, the council was advised on several occasion by Public Works Director Keesler that there were materials shortages and that costs were rapidly inflating. 

Solomon: Council ignored statistically valid survey regarding parks priorities

Councilmember Steve Solomon said the same thing that he has said every time this subject is on the agenda. His assertion is that the amenities that are being built don’t follow what people want because they don’t in any way sync with the statistically valid survey that the town did 18 months ago. No one asked for a skate park. Or a splash pad. Residents want trails. Solomon is correct. But that ship has sailed!

Bohen: Last election validates doing this

Councilmember Bohen pointed out that we had a recent election of four people. These are the same four people who proposed the bond. They were reelected. Obviously, the community felt they were doing the right thing.

Greene voted "no" but gave no reason

Councilmember Mo Greene did not vote for the measure. He did not state the reason why he voted “no” since he did not speak. Our guess is that he was caught off guard when Solomon voted in favor. Generally, Greene votes the way Solomon votes.

Winfield's "sleight-of-hand" succeeds

Mayor Winfield is giddy over the fact that Naranja Park is going to be completed. He achieved what former Mayors Paul Loomis and Satish Hiremath were not able to get done. Both Loomis and Hiremath proposed that the town issue bonds that would be paid via a secondary property tax.  Residents voted “no” on that. 

Winfield, on the other hand, circumvented the entire “property tax thing” by issuing a bond that will be serviced from the existing sales tax. A rather clever sleight-of-hand. Oh yes… Winfield and his council also abandoned the “pay as you go” funding for parks improvements. This is a policy that his council at one time affirmed and that all council’s have followed.  The reason that policy prevailed is that is unwise to borrow to fund “wants.”

The "thing in the punch bowl:" Town has no idea what it will cost to maintain Naranja Park

What is lost in all of this is what it is going to cost to maintain the new Naranja Park. Ongoing maintenance cost of the facility has never been considered by this Council  This despite the fact that town ordinances require estimating maintenance cost before committing to build any facility. That is simply smart fiscal management. It is important to know what it is going to cost to maintain a new facility because that cost is borne in future budgets.

Bits and Pieces

Oro Valley’s 21st annual State of the Town Address next week 

" ORO VALLEY, Ariz. (Oct. 19, 2022) – Oro Valley Mayor Joe Winfield will deliver his fourth State of the Town Address on Thursday, Oct. 27 at the El Conquistador Tucson, a Hilton Resort. The luncheon begins at 11:30 a.m. Mayor Joe Winfield will share a message based on the four pillars of local government: Economic Vitality and Fiscal responsibility; the Public Safety ecosystem; Public Works; and Parks and Recreation." (Source: Town of Oro Valley Media Release)

Town of Oro Valley publishes “Know Your Town’s Budget” for Fiscal Year 2022/23 

"ORO VALLEY, Ariz. (Oct. 18, 2022) – The Town of Oro Valley’s Adopted Fiscal Year 2022/23 Budget has been published and is now available to residents. On June 15, the Oro Valley Town Council adopted the FY 2022/23 budget of $147.7 million. This is a $14.3 million, or an 8.8% decrease from the adopted FY 2021/22 budget that totaled $162 million. This decrease is due primarily to the Town Council approved one-time payment of $27.6 million in FY 2021/22 to eliminate the Town’s Public Safety Pension Retirement System unfunded pension liability."  View the budget.

(Source: Town of Oro Valley Media Release)

"Rock 4 Heroes"-A Huge Success

This past Sunday, organizers held "Rockin' 4 Heroes"at Kreigh Park. The event featured music and drink. The goal is to raise funds for a heroes memorial that will be be at Naranja Park. The Quinns are the Oro Valley couple that started this because they wanted to thank the first responders for taking such good care of their son when he was battling cancer. Unfortunately their son lost this battle the year before last year's event, but his legacy lives one. There were about 2,000 in attendance.  Read more about this great event next Thursday.

Dave Perry To Retire

Dave Perry is the President and CEO of the Greater  Oro Valley Chamber of Commerce. He has been with the organization for 11 years. Dave and his wife Lisa live in Oro Valley.

Council agrees to move forward with negotiating for some properties for CDO to Greenock trail extension

The Oro Valley Town Council voted to move forward with discussions to acquire two small land parcels from an HOA and the Oro Valley Country Club. The cost, as reported in LOVE this past Wednesday, is $13,000 for these parcels. There are other parcels that need to be purchased from private land owners to complete the extension. The dollar amounts of these purchases have yet to be determined and will be brought before council when such is determined. 

This section of the trail will eventually be joined by other sections to complete a connection to Kreigh Park and to the Linda Vista Trailead.

Town To Consider Small Acquisition That Provides Big Benefit To Community

$13,000 to begin to create CDO Multi-Use Path connectivity
Tonight, the Town of Oro Valley Town Council will consider a small land acquisition. The acquisition is needed so that the town can connect the CDO multi-use path to Greenock Drive. Eventually, from there. the plan is to create a path to Kreigh Park. It is part of the town’s $25 million (now $43 million) Parks Bond Project. The amount of the land acquisition is $13,000. The land to be purchased is not the entire land needed across the wash, but it is a start.

 This trail connection is the only bond project that directly benefits those who live south of the CDO wash. Because of geography, they have no direct trail connectivity to the multi-use path or to any town amenity north of the CDO Wash. They gain no direct benefit from the golf courses’ irrigation replacement and the community center tennis court replacements unless they are paid members of the Community Center. Most of these residents are not.

They will get no benefit from Naranja Park, because they are far from it. They will get no benefit from an anticipated entertainment center in Oro Valley Village Center (formerly known as the Oro Valley Marketplace.) They are far from that. They get no benefit from the now town-owned Vistoso Preserve. They are far from that.

Should be a slam dunk but…

One would hope that authorizing Town staff to move forward with this purchase would be a slam dunk. But given the disastrous bond spending overrun on the golf courses, the tennis courts and the Naranja Park projects, one wonders if the council will flinch and not approve this modest amount; instead, choosing to defer it to “who knows when.”

The reason we say this is that Mayor Winfield stated two weeks ago that the town could delay doing anything on the trail extension to Kreigh Park. Last year, he “nixed” a Parks and Recreation plan concept to connect the multi-use path to Riverfront Park. The council has also ignored an opportunity to expand Kreigh Park. The town owns land that was given to it by the Amphi School District that it can use to expand the park; but it’s chosen not to do so even though it is detailed in the 2021 Parks and Recreation Master Plan.

Neither the mayor nor any council member lives south of the CDO Wash. They don’t live in the original section of Oro Valley. They probably don’t recognize that the town has invested little in this area since rebuilding the aquatic center ten years ago.

At the same time, they seem to not be paying attention to the rapid development in this area of town. There is an Avilla Homes rental property being built in the area. There is the hill ordinance exception being requested to build 45 high density residential homes as we reported Monday. There is a recently completed storage facility. There is the Oro Valley Church of the Nazarene (“OVCN”) mega sports complex request that is going to be heard at some point. All of these projects are turning this section of Oro Valley into a mini-city, something that was never intended when Oro Valley was founded.

There is only one connection to the multi use path for those who live in this area’ and that is at the very end of a small residential section that is hardly accessible to anyone. It would really be nice for the town to step up and show that they have some interest in helping the residents of our community who likely will never benefit from the $43 million is being spent in Parks and Recreation funding.

Bits and Pieces

OVCN rezoning meeting, Monday, October 24

You will most certainly want to attend or as a minimum listen to this meeting. As LOVE has covered extensively, it is a request of the Oro Valley Church of the Nazarene ("OVCN") to build a mega sports complex in Oro Valley's oldest, and most natural neighborhood.

"You are invited to attend and participate in a Focus Area neighborhood meeting, either in-person or online, regarding the property owner’s proposed rezoning to Planned Area Development to build new athletic facilities at the Oro Valley Church of the Nazarene located on the northeast corner of the Calle Concordia and Calle Buena Vista intersection (project number: 2002978). 

This meeting is open to the general public and anyone may attend, but the purpose is to provide an opportunity for a focused issue discussion between the immediate neighbors and the applicant. Immediate neighbors may ask questions directly to the applicant and Town staff, share concerns in greater detail and explore potential resolution of issues."

“Rockin’4Heroes”, Sunday,  2PM, at Kreigh Park

Don't forget the "Rockin' for Heroes Event" this Sunday at Kreigh Park. “Rocking 4 Heroes is a community musical event that pays tribute to those who serve our communities and country. It's FREE, but leave the coolers at home and bring some spending money for the fabulous food trucks and beer/wine tent. This event is rain or shine and is sure to be a blast...especially if you like the band, Chicago! Make sure to bring a chair or picnic blanket. 

Gate opens at 1pm with the opening ceremony beginning at 2pm sharp. Overflow parking at CDO (there will be a golf cart to help transport those with mobility issues from the lot to the park). All net proceeds from this event will go toward building the Arizona Heroes Memorial at Naranja Park." (Source: rockin4heroes.org, resident email, Press Release)

Town of Oro Valley named “Triple Crown” winner for financial reporting

ORO VALLEY, Ariz. (Oct. 11, 2022) – The Town of Oro Valley has been named a Triple Crown Winner for fiscal year 2020 by the Government Finance Officers Association (GFOA). The Triple Crown designation recognizes governments that have received GFOA’s Certificate of Achievement for Excellence in Financial Reporting, Popular Annual Financial Reporting Award and the Distinguished Budget Presentation in a single fiscal year. The Town of Oro Valley is one of just 317 governments that received the Triple Crown for fiscal year 2020. (Source: Town of Oro Valley Media Release)

Town of Oro Valley to celebrate completing golf irrigation replacement project, and tennis and pickleball court reconstruction

"YOU ARE INVITED! RIBBON CUTTING CEREMONY ON OCTOBER 26 The Town of Oro Valley invites the community to a ribbon cutting ceremony to celebrate the completion of the Conquistador Golf Irrigation Project and Tennis and Pickleball Court Reconstruction and Expansion Project on Wednesday, October 26, at 10 a.m. at the Oro Valley Community and Recreation Center (10555 N. La Cañada Drive). The projects are part of the Town’s Park Improvement Bond." (Source)

Eleven Reasons For The Parks and Recreation Bond Project Spending Disaster

A disaster of their own making

We have identified eleven reasons why the spending for the park bond amenities got so far "out of wack" from reality. Most certainly, planning to spend $53 million when there is only $33 million available to spend is a disaster.

1.  Naranja Park costs a lot more to build than "guestimated"

As we detailed in our article Monday, the key spending problem is the anticipated cost of Naranja Park. That cost has doubled from what was "guestimated" in the Parks and Recreation Master Plan. It was that number, $17million, that the Council relied upon when the bonds were issued a year ago.

2.  No Naranja Park design in place to start

The Oro Valley Town Council agreed to move forward with the Naranja Park extension at a time when  there was no agreed upon design of what it was going to be. As a result, Council had no engineered cost estimate of what it would cost to build "it'. 

3.  Council ignored experienced advice

The Council ignored the advice of the only person on Council who has ever built anything of any significant magnitude. Council Member Solomon told them that they were going about this the wrong way. First, you design. Then you raise the funds. The Council voted to do the process backwards.

4. Cheap borrowing cost came at a price... Pressure to spend and build now!... "Haste Makes Waste"

Council Member Nicolson championed the concept that the town must borrow now because interest rates were cheap. He was right. Rates are higher today than they were in May, 2021. 

The price of borrowing was a commitment that 85% of the funds had to be spent within three years of the bond issuance. That is $21.25 million. That requirement put a "gun to the Council" to spend the money quickly.  It also meant that the town had to adopt a "construction manager is a risk" approach. This is a more costly process than the traditional building process. 

5. Inflation...shortages.. contingencies... design

According to Paul Keesler, Town of Oro Valley Director of Public Works, three items have worked together to increase cost 65%. [See panel right] The biggest culprit is an inflationary 30-40% increase in construction material cost. Timing has also hampered getting materials.

6. Naranja Park amenity scope creep

The scope of what is planned to be built has changed. The pump track is now an "all wheel space". The splash-pad is larger in size and includes shade sails, a ramada, and a bathroom. The cost of grading the land to which the dog park is being relocated is more than $1million.

7. Huge Naranja Park infrastructure cost of $11million

It is going to cost almost $11million to level the land and put in the utilities for the park. Certainly, someone should have known this when the original $17million total cost of the park was included as part of the Parks and Recreation Master Plan. Simply put: The cost of getting the land ready for the amenities was vastly more than guessed by the study's consultant.

8. Council never adopted the Parks and Recreation Master Plan

The Council decided not to approve the Parks and Recreation Master Plan. This is a 10 year plan. The plan was developed by a consulting firm. There was ample resident input. This plan included a statistically valid set of resident wants. Instead of approving the plan, the Council voted unanimously (Solomon absent) to instruct town staff to use it as a guide for future planning.  Thus, there was no plan in place and Council was free to do as it wished. Which it did!

9.  Pet Projects

It is not possible to piece together a coherent, financially sound plan based on the wants of Council members, each of whom have their own pet projects. The splash pad, golf course irrigation replacement, and the "pump track" are examples of special projects that one Council member wanted that really were not the priorities of the community. Trails, on the other hand, are a major stated desire of the residents as shown in the Master Plan Survey. Trail development, however, has taken a "back seat" to all these other projects.

10.  No early warning of outrageous cost

Keesler asserted at the Council meeting that the first time he had a glimpse of what it would cost to "do" Naranja Park was on September 23. That's when all the designs were (sort of) "complete." But, the cost of doing the grading was known some time earlier because it was an ongoing activity for many months and contracts have been in place.  Former Town Manager Jacobs should have reported to Council that site preparation was going to be far more than the consultant "guestimated". 

11.  Locking in the use of the half of the half-percent sales tax for non golf purposes

The Council voted to apply one half of the half-percent community center/golf sales tax to non golf purposes. The noble goal was to let the 99% of the community who never use those facilities get some benefit from the tax. The town pledged this tax to pay back the Park Bonds. That's a 20 year commitment that can not be changed. 

So...what can be done

It is now up to the Council do something.  They only need to build what they are legally required to do in the bond indenture: Spend 85% of the funds in the manner as noted in the bond indenture and continue to pledge the quarter percent sales tax to repay the bonds. Otherwise, they can do as they wish regarding what to build and when to build it.

Some of the amenity building on Naranja Park can be deferred to future years' spending.  As a minimum, the current plan for relocating the dog park... building pristine roads... adding all four new fields can wait.  The Council can defer building the trails but that would  punish residents who actually want to walk or bike to our parks without getting hit by a car on Oracle Road.

Tough Council decisions, decisions of their own making.

They need to fix the problem.

Whatever they decide, the vote needs to be unanimous. No more blaming each other. Partisanship has to go.

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The Naranja Park Spending Disaster

Town of Oro Valley Faces Huge Funding Shortfall On Parks Bond Projects

Parks Bond estimated spending far exceeds funding

Last week, for the first time almost a year, the Oro Valley Town Council got a glimpse of what it is really going to cost to build the projects funded by the $25 million parks bond. It was a real eye opener for them.

The news is so bad that it is hard to know where to start. Here's what the Council learned.

There's an $18.2 million shortfall [see panel]. 

Spending is estimated at more than $51.4 million to fund the five Park Bond areas. Funding sources, which include the Park Bond money, are $33.1 million. The shortfall is $18.2 million.

Spending on golf course irrigation replacement and tennis course replacement assured

Spending on golf course irrigation and tennis court replacement at the Community Center is well underway. These projects will be completed in November and December, respectively. Their total cost is $12 million. All but $900,000 has been contracted. These projects are going to be built.

Naranja Park spending far more than "guestimated" by Parks and Recreation Study Consultant

The park that Council imagined when Council approved the bond is in jeopardy. The cost of that park has grown from a guestimated total spending of $17 million to an engineered estimated $33.7million.

Why the difference? According to Town Public Works Director Paul Keesler "The creation of the $17M estimate within the [Parks and Recreation Master Plan] study was completely generated by the consultant in 2018, using their historical data and their design assumptions. But at the end of the day, it’s only a study and actual engineering was not designed at that point."

Community Center Parking and Multi-Use Paths in jeopardy of not happening

The Parks Bond also included spending on the Community Center parking and some key additions to the town's multi-use system. Nothing has been done on these. Detailed construction design is not completed. It's anyone's guess as to what these will cost.

Town Staff recommends stripping back Naranja and cutting Multi-Use Path projects. Then, funding remaining shortfall through town's capital improvement funds

Staff recommended stripping back funding of $8.2 million from the Naranja Park Project and from the multi-use path projects. Then, they recommend using the $9.4 million from various town funds to cover the difference. The total of the two measures still results in a $2million shortfall [panel left]

Town Council requests revisit with staff

After a lengthy discussion, the Council asked staff to come back with more recommendations on what to do. 

This rather simple request came after various Council members blamed various other council members, town staff, the economy and anything else they could think to blame for this problem. Frankly, there is plenty of blame to share. 

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Tomorrow: The Naranja Park Spending Disaster

Wednesday: Eleven Reasons For The Parks and Recreation Bond Project Spending Disaster 

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Some links that might be of interest

5/10/21 Parks Bond Resolution (Panel)

7/21/21 Park Bond Amenities (Panel)

11/15/ 21 LOVE article: Town of Oro Valley Embarks on Ambitious Parks Projects

11/17/21 LOVE article Naranja Park Buildout Presents Huge Challenge

Another Season Begins

Another season begins

September starts a new season for Oro Valley. The election is over. The council is returning to work after a month’s hiatus (like LOVE). A new council, which is the same as the current council, was ratified in a three minute special council meeting on August 24. They will be seated in November. They’re rested. We’re rested. So, let’s get going!

. 

Some pressing business in the queue

There are zoning changes and one general plan amendment pending. Public hearings have occurred on all of these. Some have occurred in recent weeks. Here’s a quick update of what is to come.

General Plan amendment and zoning change requests

• A rezoning  project and general plan amendment and for 85 to 90 rental homes of one or two stories to be located at the southeast corner of LaCholla and Tangerine. This property is currently in the general plan for neighborhood commercial and low density residential use. The change to high density residential use will require a five person council member approval, if it comes before council.  There’s lots that will happen before that. Lots of neighborhood opposition to this one.
• Avila Rancho Vistoso East is a rezoning project that would allow tiny rental homes located just north of Safeway on Rancho Vistoso Blvd.  Lots of neighborhood opposition to this one too. And there’s another of these, Avila Rancho Vistoso West, in the queue also. This would add 125 tiny rental homes. The property is located at the west corner of Tangerine and Rancho Vistoso Blvd.
• Oro Valley Church of the Nazarene wants to build a sports complex next to its Concordia and Linda Vista location. Yes. Lots of opposition to this one too. This is a rezoning project.
• Town West has yet to submit a revise plan for the Oro Valley Market Place rezoning. We expect this to be filed in the not too distant future. We don’t expect a lot of opposition to this as long as the applicant keeps the building height within a reasonable limit and maintains a reasonable building setback.

Conditional Use Permits

There are also conditional use permits being requested for…

• A storage and RV Storage facility in the mostly vacant, shovel-ready Mercardo Del Rio “Plaza”. This is behind the Rooney Ranch Shopping Center
• Another storage facility at the southeast corner of LaCholla and Lambert Lane
• And yet another one at La Canada and Tangerine
• A car wash in the Oro Valley Marketplace

Zoning code amendments

There are town staff recommended zoning code amendments that are working through the process and will eventually find their way to town council. Last night, for example, the Planning and Zoning Commission considered changes to the development review process; and, as a separate discussion,  changes to recreational requirements for residential and multi-family units.

New regulations

Tonight, the council will consider regulations regarding vacation and short term rentals. Among other things, the regulations may include a licensing requirement.

Water: “The Elephant In The Room”

Most of these projects have two things in common: When completed, they will use lots of water. They will add to traffic congestion. 

Town assurances aside, residents are concerned about their ability to get the water they want at a reasonable price to do the things they moved to Oro Valley to do; like have a pool or a nicely landscaped property. They should not be asked to squash their dreams so others can move here. 

The council’s position appears to be one one of ignoring the water issue entirely, relying on water conservation penalties and assurances by the town water administrator that the town has an assured water supply of 100 years. 

Congestion: “The Other Elephant In The Room” 

The council has never addressed traffic congestion. Oracle Road, from Tangerine south, will be a higher traffic corridor than it is today once the apartments planned along that road are built.  The Rancho Vistoso Blvd-Tangerine intersection will become much more congested. Residents who use Woodburne Avenue will be negatively impacted.

The future holds even more

Add to all of this, the continued buildout of the town’s park system… the golf courses’ irrigation… a possible community center rebuild… use of drinking water to water public parks… the need for a new police station… use of reclaimed water… A 2025 General Plan.

All of this is yet ahead.

LOVE will report as it sorts out.

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The Rush To Complete Naranja Park Is On

The rush is on

The Town of Oro Valley at the urging of the the Oro Valley Town Council is rushing to complete Naranja Park. The goal is to complete the buildout of the park by 2024.  The town is moving forward without a council approved conceptual design. They are doing so without knowing what the cost of the buildout is going to be. They are doing so without knowing what the cost of maintaining whatever it is they are building will be. 

They are pressing forward with this massive undertaking at rapid pace. They are doing so that at a time of extraordinary high inflation, significant material shortages, and labor shortages. 

No approved conceptual design… and a council “in the weeds” 

Town staff presented the latest design to council at its April 6 study session.  The design is different from the design presented in the 2020-21 Parks and Recreation Master Plan. That is the plan that kicked off this rush to complete the facility. 

At the study session, Councilmembers presented their views on such items as where the dog park should be located, whether or not the “pump track” was big enough, and why the four new multipurpose fields could not be located a bit closer to the existing fields. Mayor Winfield suggested that staff could reduce one planned restroom if money needed to be saved on the project.

Barrett questions "all-at-once" site preparation cost

The first construction step is to prepare the site. That requires mass grading the site and building the underground utility infrastructure. Site preparation is costly. It does not result in any immediate benefit to the community. This concerns Vice Mayor Barrett.  At the meeting, she asked asked if the cost of this "all at once" site preparation approach would consume a large portion of the $15 million in bond funds that were earmarked for building the park.

Barrett did not receive a direct answer from Town Public Works Director Paul Keesler, who is in charge of the project. Rather, Keesler explained that preparing the entire site was necessary because of the various grades of the existing land. One simply could not grade one area without impacting the other areas.

Barrett then observed: “If we are in a situation where the grading is going to eat most of [the bond money], and we’re still not able to put in at least a significant portion of the amenities, then I think we would need to come back and take a look at it."

Cost of the buildout  is unknown.. Our guess: $21 million

The cost of building the facility is unknown because the town does not know what the facility is going to look like. “Staff is putting in motion plans to get the final maximum bid price of our Construction Manager at Risk (CMAR) contractor, Haydon, so plans can be made to start the mobilization and then grading phase.” (Source).

The Parks and Recreation Master Plan estimated estimated a buildout cost $17 million. That estimate is a year old. In today’s dollars that would be $21 million, assuming a construction inflation rate of 20%. $15 million of that will come from the bond that was issued last summer. The remainder will come from town reserves. (Source)

Keesler confirmed that the Naranja Park buildout cost will be significantly more than anticipated even a year ago. "“I can guarantee you that Naranja Park will take the majority of the $25 million in park bond money.” According to Town Manager Jacobs. the cost is expected to be at least $5 million more than the allocated amount of $15 million.

According to Keesler, the biggest risk is the availability and cost of materials. "Everything is crystal ball…” at this point.

Cost of ongoing maintenance unknown

Since the town does not know what the site is going to look like, it does not know the cost of maintaining this extraordinarily large, amenity rich facility in a manner consistent with Oro Valley’s vision as a “Town of Excellence.”

We believe that there is a town requirement that the cost of maintaining major proposed public works projects be estimated before that project is approved by Council. And if there is not a requirement, then it most certainly should be one!

The only certainty: Town's communication outreach plan in place

About the only thing that is certain is the town's communication plan. “Once construction begins, the Hayden [CMAR Contractor] team will be providing weekly project reports to Town staff. The OV Communications team will summarize those reports into reader-friendly updates that will be posted to the project web page located here. Updates will also be included in the Parks and Recreation email blast as needed, and photos will occasionally be posted to social media to keep the community engaged and mindful of the project web page and the progress on this exciting amenity. Site signs will include a QR code to lead residents to the project page as well. To kick off the project and communication efforts, staff is planning a press release, an Explorer article and a podcast episode ahead of the May 31 groundbreaking ceremony.” (Source)

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2021-22 Parks and Recs Investment Is 62% Of Total Spend

 

Naranja Park Buildout Presents Huge Challenge

Three major sets of bond projects... Naranja buildout is the most challenging

The buildout of Naranja Park is the most challenging of the three sets of bond projects that the town will undertake, This is because it is the most complicated and the most time consuming.

According to town Public Works Director, Paul Keesler, a three year time horizon for Naranja Park build out is not possible if the town uses the normal “Design-bid-build“ approach to building facilities. The town plans to use the “Design-bid-build“ approach for the Community Center Improvements and Multi-use Path Connection projects.

The "Design-bid-build“ process is time consuming. First, a conceptual design is created; then a project design is prepared; next, a request for quotation to build is solicited. A bidder's conference occurs. Bids are obtained. A contractor is selected for negotiation. Negotiations occur. Finally, after many months of effort, a contract is signed after terms have been agreed upon by the town and the contractor.

Using a "Design-Build-Design" approach for Naranja Park

The town will use a different process for the Naranja Park build out. This is because there are many parts to the Naranja Park build out and only three years to get at least 85% of the work done.  Instead the Town is going to use a “construction management at risk” (CMAR) approach. The town used this approach in building the town’s aquatic center.

Addressing town council at as study session on November 3, Keesler described the CMAR approach: "We hire a designer at the onset of the project; also hire a contractor based on qualifications...They work as a team 'designing, constructing, designing and constructing' so that we get to start a whole lot sooner."

“We’re well on our way, but we have a lot going on in the next three years.”

Keesler presented a three year schedule for these project. Some work has already started.

Naranja Park built out schedule

Regarding Naranja Park, the town has hired an individual to be the construction manager. The individual has experience in CMAR projects. The town has hired McGann and Associates as the designer firm. The town will select the CMAR contractor by the end of this year. The plan for Naranja Park is to start the three plus year project next May and to keep the park open throughout the three year build out.

Golf course irrigation replacement schedule

The timetable for the golf course irrigation project is dictated by the golfing season. Summer is the lowest use period. Next summer the town will complete the irrigation for the El Conquistador Course. It will complete the irrigation for the Canada Course in the summer of 2023. The town has already bid this work and the council approved a contract of $7.8 million at the November 3 council meeting.

Multi-use path connection project schedule

The three multi-use path projects will be one over the three year period. The path connecting the CDO Multi-Use path to Kreigh Park will be the last of the three path projects because the town has no idea, at the moment if what will be the route of the path.

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The Town of Oro Valley Embarks On An Extraordinarily Ambitious Set of Parks Projects

Investment will result in massive change to the town's parks and recreation system over the next three years

Based on town council direction in July, and funding secured in September, Town of Oro Valley staff has embarked on a set of major parks projects. Over the next three plus years the town will build, upgrade and improve the town’s Parks and Recreation system. 

$25 million in spending from the parks bond...

The town will spend tens of millions of dollars in doing so. $25 million of this is from a bond that the town issued on September 22. Those monies are specifically to be used for three facilities: Naranja Park; Golf and the Community Center; and multi-use paths. The council has defined specific projects. (See panel) These projects can be changed by a future council as long as the funds are used to improve the facilities. The town is required to spend 85% of the $25 million within three years per bond requirements.

Plus another $6.9 million in non bond related projects this year

The town will also spend money from the annual parks and recreation budget for parks and recreation facilities. These are annual appropriations, subject to the discretion of the current and future councils. 

This year’s budget for parks and recreation capital improvements is $29.2 million. That includes spending of $22.3 million dollars from the bond funds. Thus, there is additional $6.9 million on projects this year that are not related to the projects reported in this article. (Source: 2021-22 Town of Oro Valley Final Budget, pages 225 and 230).

These non bond related projects are either lifecycle replacement projects or park improvement projects. This year's lifecycle replacement projects are the rehabilitation of the garage at Steam Pump Ranch, the rehabilitation of the BBQ and bunkhouses at Steam Pump Ranch, a playground upgrade at Kreigh Park, and an upgraded sanitation unit at the Aquatic Center. The sole parks improvement project is a hardscape walkway at Naranja Park.  (Source: 9/21/21 Town Council Agenda item 3)

Financial impact of the Vistoso Preserve is on the horizon

The operating cost and investment impact of adding the former Vistoso Golf Course to the town's parks and recreation system won't be known to the public until after the purchase occurs, hopefully early in 2022. There is work that the town will need to do there as the course has been abandoned for four years.  This will add to the complexity of what is already a very ambitious set of Oro Valley parks projects. 

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Wednesday, we explore the complexity of actually spending the $25 million bond funds and building the projects within a three year horizon.

Winfield "Doubles Down" On His Support Of Municipal Golf

"No on wants our public courses to succeed more than I do"

“In October 2019, I approved the 36-holes of golf. No one wants our public golf courses to succeed more than I do.” 

Thus began Mayor Joe Winfield’s 8 minute explanation of why he supported spending almost $7.8 million to replace golf course irrigation. The council approved this expenditure by a 6-1 vote last week. 

“I also supported broadening the half percent sales tax, broadening to all parks and recreation, including the golf course irrigation. Delaying repairs will just cost more in the future.”

Reason: "Golf is the most popular sport in our community"

Referring to the public outreach that was on for the 2020 Parks and Recreation Master Plan: “It does identify that golf is the most popular sport in our community.” It also identified many other resident needs parks and recreation items that are important to the community. “We did have a good response to each of these outreach efforts.”

Basis: As validated they the towns "statistically valid survey"

Winfield relies on the a resident survey that was done in the development of the town's Parks and Recreation Master Plan. 

“When I looked at the statistically valid survey, the thing that really stood out to me was that half our community doesn’t use any of these amenities.” Winfield noted that despite this 93% of the community (users and non users) indicated that the “Parks and Recreation System Program makes Oro Valley a more desirable place to live.” 

"Nothing I like to see more than people on our golf courses"

Winfield noted that he doesn’t use many of the town’s parks and recreation facilities but “I know that it is important to our community and I want to invest in all these parks and recreation facilities and amenities, including golf because I know that golf is important to our community. There’s nothing I like to see more than people on our golf courses.”

Winfield stated that 22% of the respondents to the survey use the golf facilities.”I get a little weary of hearing that it is only 300 people. That’s nonsense.” According the Winfield, the national statistic for that is 9%. “And our facility is 22%.”

“I wish this bond was 50 million"

Winfield would like to build every part of the master plan now. “I wish this bond was 50 million.”

Winfield applauded town staff for recommending that $4.5 million of the golf irrigation replacement come from the $25 million parks and recreation bond, with the remaining $4.3 million coming from available reserves.

Mayor Winfield is confident in town staff's ability to get the irrigation rebuilt. “If we leave it to our staff to get the job done, they’ll make it happen.”

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Municipal Golf Operations Exceeding Financial Targets But Challenges Remain

Results for July and August better than budget
Oro Valley Municipal Golf exceeded budget targets in the first two months of fiscal year 2022. Golf operations lost $156K less than budget. Total losses were $166K. Key revenue drives, total rounds played, greens fees and monthly dues were comparable to budget; while food and beverage revenue far exceeded budget. Spending was under budget primarily due to lower utilities maintenance cost. According to Wendy Gomez of the town’s finance department, it is too soon in the fiscal year to project any change from annual budgeted financial result.

Challenge ahead regarding high cost of irrigation replacement

The town has committed to replacing the irrigation on its two 18-hole courses. The initial town estimate of this cost was $4 million. The latest bid for this is now almost $7.8 million. This doubling of cost is indicative of a national economy of shortages and rampant inflation.

The funding for the irrigation improvement is designated to come from the $25 million bond the council approved last month. Half of that bond money is committed to completing Naranja Park. This leaves $12.5 million for other projects identified for bond funds use by council in July. The golf course irrigation replacement is one of these.

If indeed, the council commits $7.8 million of bond funds for golf course irrigation, only about $4.2 million remain for two council designated bond fund projects:  A community center parking lot improvement and a replacement of tennis and pickleball courts. These are costly projects, perhaps in excess of the $ 4 million that would be available.

Is there a "One Course" irrigation replacement option?

It may well be that the “wisest course” is to complete the irrigation on 18 holes of golf using bond funds, freeing $4 million for these other planned uses. Then, complete the irrigation on the other 18 holes using pay-as-you-go. One of our readers pointed this out to Mayor Winfield in an email: “The Town does not own the property south of Lambert (5 holes) yet the Town is watering and maintaining the property.” This is part of the Canada course. Why invest in changing the irrigation of these these holes?

Is there a "wait till inflation abates" option?

There is an option of waiting to do any of these improvements until prices "come down".  At some point the world will get back to normal. There will be surpluses rather than shortages. Businesses will once again become competitive. Prices will come down in businesses such as those that install irrigation because competition will increase. The problem is that this may be 3-5 years from now, beyond the spending horizon of the bond funds. The town is required to spend the bond funds within three years of the issuance of the bond, per the bond indenture.

Challenge regarding the financial impact of the Pusch Course opening and its use of drinking water for irrigation

The 9-hole Pusch Ridge Course is opening on November 1. This course has always presented an economic challenge to the town. How it will fare and its impact on golf economics is yet to be seen. Fortunately, that course has a resident group, "Friends of Pusch Ridge Golf", who are committed to its financial success; and who understand that use of drinking water for irrigating the course must be alleviated in the near term and eliminated in the long term.

Nothing is simple when it comes to Oro Valley municipal golf financing and operations. In terms of challenges, it is “The gift that keeps giving.”

Bits and Pieces

Will council reconsider parks and recreation bond?

Monday, we wrote that Town staff failed to include in the bond documents the specific uses the funds from the recently approved $25 million parks and recreation bond issue are to be used. Tuesday, we wrote five reasons why it’s entirely possible that the funds will be spent on items different from those approved by council in July. 

There is no motion to reconsider the parks and recreation bond vote.  It may be that this town council wants the use of these funds to be subject to change.  This will leave a rather large sum of funds available for the next council to spend.

Big Wash Trail Head to remain open during construction

"Big Wash Trailhead users will start seeing construction equipment and activity as crews begin to clear vegetation adjacent to the trailhead for future bank protection. But rest assured, the trail and parking lot will remain open, with no detours or closures...The Tranquilo development will include future improvements to the trailhead. New bank protection will protect the trailhead from future flooding and erosion. Eventually, once bank protection is finished, the Big Wash Trail will be extended south to Tangerine Road. ." (Source: Town of Oro Valley Press Release) 

Tranquilo is the project where homes are being built down towards the wash.  Learn more here.

Steam Pump Ranch Concert Tonight

Friday night concerts are back at steam pump ranch. The time is 7-9:30 pm. "This is a FREE event, no registration required DETAILS: Friday Night Concerts are back on the lawn at Steam Pump Ranch! The music on October 1 will be performed by Good Trouble (classic rock/Motown). A food truck and a smoothie vendor will have treats available for purchase. Beer and wine will be available thanks to the Oro Valley Lions Club and Hensley Beverage Company. We recommend coming early and bringing your own chairs and blankets." (Town of Oro Valley Parks and Recreation email)

Five Reasons Parks and Rec Bond Project Priorities Could Change

Yesterday, we discussed the fact the council approved $25 million bond for parks and recreation improvements does not include a specific list of projects that are being funded. As a result, there is no enforceable promise that guarantees that the projects approved for bonding in July will happen.  

Today, we present five reasons why priorities could change.

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The "next council" might have a different set of priorities

The term of the two members of council who voted "no"on the bonding ends in 2024. Thus, they will be in office through the completion of most of the work. All they need are two new members of council who agree with their thinking to change the direction of the use of these bond funds.

Some of the items on the list of projects do not reflect the wishes of the residents

Council Member Solomon is focussed on what residents want. He bases his thinking on a town conducted statistically valid needs assessment that was done by an independent consultant for the town's 2020 Parks and Recreation Master Plan. That survey classified facility needs into three categories (See panel right). Many of the items on the July approved priority list are either low or no priority. "My big objection is that this does not follow the statistically valid survey that was touted 'time and time and time again' through this council. Yet, after all of that, that is not the way priorities were set," according to Solomon speaking a last week’s town council meeting.

The town does not know what each project will cost yet they are raising money to fund the projects now

The town has "put the cart before the horse". The town has no true financial picture of what projects it can and can not afford.  This is because it is just now preparing revised estimates of construction costs, costs that may be much greater because of inflation. Council Member Solomon asked Town Finance Director Gephart last week what these estimates were. Gephart  stated that “I do not have a cost estimate...” of these items “… because we are still working through what this final project list is going to be.”  According to Gephart, the project list cost could well be more than originally estimated.

The town may need even more than $25 million for these projects. Funds may have to come from added sources.

$25 million may not be sufficient to pay for all of the cost of the projects because of inflation. According to Gephart, inflation may stay in the 5-7% range for the foreseeable future because government stimulus money has flooded the market.  “There is concern that with inflation, we are not going to complete all of the projects, amenities that have been approved.”

What happens if the town finds itself short of funds for these projects? According to Town Manager Mary Jacobs: “If we are not able to get everything done on the list, I will come back to council. We also have the opportunity for...” adding funds to complete these projects through future budgets. “Because these projects are going to go on over multiple years… We’ll have to budget the bond monies…and look for supplemental monies."

The town has no idea of what will be the cost of maintaining these facilities

The projects that will be funded by the bond are not fully defined nor have they been fully vetted per town policy.  Policy 1 of the town’s financial and budgetary policies states that all proposed projects should have “…all operations, maintenance and replacement costs shall be fully costed.” Town Finance Director Gephart stated that he had no idea of what these costs would be.

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Council Members Solomon and Green voted against the bond measure. Solomon summed up his reasoning.  "This is a pretty big wish list and we are not going to be able to afford all of this especially considering the operating cost.” After reminding the council that voters have always rejected bonding for parks projects at the ballot box, Solomon noted; "This is not what the community asked for. This bond is rushed through and no real financial analysis." If new council members next year agree with Council Members Solomon and Greene, then the allocation of the bond money will change.

Town Staff Fails To Include As Directed By Town Council Specific Uses In the $25M Parks and Recreation Bond

Council approves a $25 million parks and recreation bond...

Last week, The Oro Valley Town Council passed a measure to raise $25 million through bonding for parks and recreation improvements. Mayor Winfield framed the discussion of the bond as the culmination of efforts to add long neglected items to the town’s parks and recreation facilities.  After discussion, the measure passed 5-2, Council Members Greene and Solomon dissented.

But projects to be financed are not a "done deal"

Mayor Winfield framed it as a “done deal.” After all, in July, the council approved by a 5-2 vote the specific projects that are to be funded by the bonds. But that does not mean that all of those projects will actually happen.

 

Because the bond agreement does not restrict use of funds to specific projects

The only legal document that survives a change in council is the bond indenture document. That document does not restrict the use of these funds to the July approved specific purposes. The funds will be spent over a three or perhaps a four year period. This term of the current Mayor and three council members next year. There is no guarantee that the items this council approved this past July will survive a newly installed council.

Despite the fact that staff was directed in the July  town to include specific uses with the bond

The minutes of the July 2021 town council meeting reflect exactly how these funds are to be used.  The following motion was passed (5-2): "Motion by Mayor Joseph C. Winfield, seconded by councilmember Josh Nicolson to direct staff to include the following projects and amenities with the Parks and Recreation Bond."  The panel at right lists these. Not including these items specifically in the bond indenture violates this council directive

Thus, the use of these funds can be shifted because the funds are really just a "pool of funds"

The funds, thus, can be shifted to other projects because they projects are not identified specifically in the bond. The only way that the projects this council defined in July can survive a new council is if the  the specific projects are included in the "bond indenture."  That is because the bond indenture is the legal document that has been approved by the IRS and the SEC. It is the document upon which investors rely. It is the use of funds as described in that document to which the Trustee of the funds and the town must abide regardless of what any council wants to do.

In this case, however, there is nothing in the bond legal documents that defines the specific use of the funds.

85% of these funds must be expended within three years... beyond the term of current council

In effect, the bonding is creating a $25M fund that can be used for any future parks and recreation need as long as 85% of the funds are expended within three years. This leaves 2 years of spending beyond the term of the current council majority. 

Most of the projects won't even start for six to nine months.

Funds can not be spent in advance. Thus, it is highly likely that it will take at least a year before major projects building commences simply because of a shortage of contractors and materials for the work. 

Consequently, ample funds will remain in the bond fund well into the term of a new council. Indeed, the use of these funds will be their responsibility.

Tomorrow: 5 Reasons why the projects funded may differ from the originally intended projects if the council bond vote last week stands

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Tonight, Oro Valley Town Council Focuses On Bonding $25 Million in Parks and Recreation Spending

A $25 million borrowing

The focus of the town council tonight is financing Parks and Recreation spending of more than $25Million over the next three years. Last night, the town’s Parks and Recreation Commission discussed what will be done and when it will happen [See Panel]. Tonight, the town council will review and likely approve the details of a municipal bond issue to fund $25 million in spending on these items.

It will be a challenging meeting because of the detail nature of the discussion. What follows is our synopsis of the key elements of the financing.

The money will be repaid over 20 years in annual amounts of $1.7 million per year. 

This assumes that the face interest rate of the bonds is to be no more than 3.5%. The actual rate is determined on the date that the bonds are sold to the public. Town Finance Director David Gephart estimates that the effective rate on these bonds will be from 2% to 2.25%. According to him, this will be a bit less than the effective rate on the bonds the town issued to pay down it's public safety debt. Those bonds were taxable bonds with an effective rate of 2.39%.

The town anticipates issuing bonds in the amount of $20,990,000. It anticipates that the face interest rate on the bonds will be such that investors will a premium of $4.4 million to own the bonds. Thus, the bond issuance would raise $25.4 million of which $25 million will go into the project fund. The remaining amount will be used to pay fees.

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The actual borrowing will be more than $25 million

This is because of  fees paid to four third party participants: A special legal counsel, a financial advisor, a trustee, and an underwriter [those who actually sell the bonds].  The total of these costs is estimated to be $357,000.

In this case, the special council is Gust Rosenfeld P.L.C. The financial advisor is Stifel, Nicolaus & Company. The trustee is U.S. National Bank Association, a division of U.S. Bankcorp. The underwriter is Piper Sandler & Co.

These are revenue bonds

The funds to repay these bonds are pledged from the town's sales ["excise"] tax revenues. Thus, they are called excise tax revenue obligations. The town is pledging all not previously pledged sales tax revenues to pay for the bonds. This means that the sales tax revenues must be used first to pay back the bonds. What is left can be used for town operations.

Primary backing is the half cent parks and recreation sales tax

Though the town is pledging all of its sales taxes to pay bond service, the primary fund being pledged is the half cent sales "community center" tax fund. This is now to be called the "Parks and Recreation Excise Tax Fund"

The town believes that fund will have sufficient capital over the 20 year time frame.

"The Town forecasts that the 0.5% sales tax the Town Council identified as the fund source for this bond repayment will be sufficient for both the continuing operations of the Town's golf courses and community center as well as the repayment." (Source)

The interest on these bonds is "tax free"

These bonds are being issued for a civic purpose. Thus the interest on these bonds is tax free. That is, the bondholder will not pay interest on these bonds. This is unlike the $27 million in bonds the town issued in July to reduce the town's large public safety pension underfunding. The interest on these bonds is taxable because the use of the proceeds to pay previous debt is not a "non taxable" use, per IRS rules. The difference between the two types of bonds matters because taxable bonds are generally only purchased by investors who have no tax liability, such as a University's endowment fund.

The proceeds of the bond will be held by a trustee

The proceeds do not become part of the town's general fund. According to the trust agreement the trustee xxx  will disburse the funds for one of three reasons:

• to finance costs related to the project;
• to pay trustee costs and fees and
• to pay pay all or a portion of the costs of delivery of the 2021 Obligations

Generally, the proceeds are reinvested so that earn interest until they are used. In this case, the funds will be used over a three year period.

Bond agreement allows sales tax reduction only if certain conditions are met

Essentially the bond agreement requires that the town maintain sales tax levies at the same level as today. However, the town can reduce sales tax rates as long as the resultant sales taxes are "...equal to at least two times the Annual Debt Service Requirement (as defined in the Trust Agreement) payable under the Agreement. This is approximately $3.4 million. 

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