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

The Watchdog Report: November 2020 Financials - Cloudy with a lack of transparency

 

The November financials for the Community Center and Golf are posted and they continue to be cloudy. Due to a lack of transparency, it is difficult to completely analyze the report. I asked the Town Manager why the reporting format has changed from prior years. She responded that this is the way the contractor wishes to report.

The Town Manager and the Council apparently don’t understand that the golf management company works for the Town and will report whatever the Town requires them to report. Is the Town Council happy being left in the dark?

As a result of the lack of transparency I have submitted a records request as follows:

“Stop the lack of transparency in the Town’s financials. Please forward the cost of the utilities for the Community Center Fund, the total member revenues (Dues and Cart Fees), total revenues from non-member play (including any cart fees), the cost of water for golf (taken from each pond), the number of free (comp) rounds, for July 2020, Aug 2020, Sept 2020, Oct 2020, and Nov 2020.

In the future you can expect a request like this monthly until it becomes part of the Council’s financial attachments.”

Here is what we know
• Golf lost $22,094 in November 2020 (which is great) bringing the total losses to date as $658,349.

• Golf was originally forecasted to lose $922,245 in FY 2020/21, but that has been updated to $991,280.

• The Town reported an all-time high of 279 members. (Golf is up 30% nationwide, one of the positive results of the pandemic.) They also reported 3,891 non-member rounds on 36 holes.

For comparison, one public course nearby reported 3,570 rounds of play on 18 holes. Another course nearby reported member and non-member rounds as 6,971 on 18 holes, while the Town reported 7,545 combined rounds on 36 holes. Although our rounds are up, they still do not come close to what other courses are doing.

• The Community Center Fund shows a positive balance of $102,909 for the five months ending November 2020 and is forecasted to lose $45,749 by the end of the fiscal year (June 30, 2021). Your sales tax revenues have contributed $1,090,173 from July 1 through November 30, 2020.

Pusch Ridge Course
An agreement for the El Conquistador resort (HSL Properties) to lease the Pusch Ridge course was supposed to take place by the end of January. As of January 22nd, HSL had shown no indication that this will be accomplished.

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Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.

The Watchdog Report: Community Center and Golf Financials, End of Fiscal Year 2019/20

 

The Town has published the financials for the past fiscal year (July 1, 2019 through June 30, 2020).

• Contracted services (food and golf) lost $1,616,922. This is an improvement of only $52,311 from the prior fiscal year.

• There were 264 golf members at the end of the fiscal year, which is an all-time high. However, membership was back down to 257 as of August 31st.

• The Overlook/Garden Café lost $147,201 which is $33,284 more than the prior fiscal year.

• YOUR dedicated sales tax revenues funding the Community Center and Golf were $2,584,916, which is $121,827 more than the prior fiscal year.  Primarily due to YOUR sales tax input, the Community Center Fund (CCF) ended the fiscal year with a positive balance of $408,438. If you live in an HOA adjacent to the golf courses, you not only contribute with your sales tax, but you contribute another $125,000 via HOA fees.

• The Town’s operations (fitness, swim, and recreation) lost $231,729.

HSL gets another pass
The plan for FY 2020/21 is to withdraw another $750,000 from the General Fund to pay for the improvements needed to make the community center ADA compliant.

The current Council has foolishly decided to continue with the 36-hole model. They also recently extended the effective date from 10/1/20 to 1/31/21 for HSL to begin leasing the Pusch Ridge course from the Town. This means that the Town continues paying for 45 holes of golf for another 4 months. It appears that the hospitality industry has been adversely affected by COVID. So the Town will assist HSL by continuing to provide for the “resort” course. In other words, the Town will take $125,000 from homeowners while they give HSL a pass.

I imagine that you are as tired of all of this as I am.

Let’s talk about the water situation
In FY 2019/20, the Conquistador Course needed 103,920,000 gallons of water (319 acre feet), while the Canada Course needed 106,908,000 gallons (328 acre feet). To give you an idea of how much water that is, 1 acre foot of water will service 4 homes a year. That equals 870 homes for the Canada course and 729 homes for the Conquistador course. According to the Town Manager’s Executive report, there were 122 Single Family building permits issued in all of FY 2019/20.

Yes, it was reclaimed water, but WATER IS WATER. We pay Tucson for the water. How much could we save in water alone if we had only 18 holes of golf?

Tucson’s share of the CAP water is diminishing due to the drought and the increased population in the Colorado basin and the St. George Utah area. Water is a serious issue in Arizona and Oro Valley has decided to use more than its share on 45 holes of golf.

So, with the water situation and the continued losses, why does a Town of 45,000 citizens provide 45 holes of golf? This golf course fiasco gets more absurd and ill-advised as time goes on.

. . .
Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.

CHCA and Town Golf Agreement Creates Conflict Of Interest

Agreement approved unanimously
On July 15, the Oro Valley Town Council unanimously approved an agreement with the Canada Hills Community Association ("CHCA"). CHCA (and The Villages of La Canada Master Association) will pay the town $125,000 annually, starting April 1, 2021 through April 1, 2025.

Implied agreement to keep 36 holes operating and in good condition
In return, the town agrees to use its best efforts to operate and maintain two golf courses subject to the following major contingencies:  "Conquistador Golf Course irrigation and repairs to be completed in 2022 and irrigation and repairs for the Canada Course in 2023..." subject to the financial impact of the pandemic.

CHCA Endorsement in light of this agreement is a conflict of interest
The CHCA is now doing business with the town. They are receiving something of value for money.

The problem is that the CHCA is also actively participating in the election by endorsing candidates Greene, Rodman and Solomon. (Source) They are doing this at the same time they are under contract with the The Town of Oro Valley.

Enterprises that are under contractual arrangement with the town should not be advocating in elections
This is a de-facto rule. For example, The Greater Oro Valley Chamber of Commerce receives funds from the town in return for providing services. It does not participate in elections. It does not endorse candidates. We believe that its agreement with the town prohibits this activity.

As individuals, the CHCA Board Members ( Rich Crocker,  Steve Jones,  Robin Jones, Chuck Milhiser, and Je LeFevre) are free to extoll the virtues of any candidate they prefer. They can donate to them at will. They can endorse whomever they wish.

However, the Homeowners Association they represent really should not do so.
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The Watchdog Report: Troon Is Out. Billy Casper Is In.

According to Tucson Local Media, the Town of Oro Valley is finalizing an agreement with Billy Casper Golf  to operate the Oro Valley Golf courses…but will it make a difference?

Troon wasn’t entirely to blame
We know that Troon inflated their forecasts, especially in the first couple of years after we purchased the property. To be fair, however, Troon was working to please the then Town Manager, Greg Caton and the Hiremath regime. Troon also catered to the members and the “green shirts,” but was it Troon’s fault that their responsibilities as the “contracted operator” cost the Town millions?

I don’t think you can place all the blame on Troon as I doubt there is any company that can turn our 45 holes of golf into a profit, or even an acceptable loss. Unloading the 9-hole Pusch Ridge course is a start. Billy Casper will now only be responsible for a 36-hole operation. However, Billy Casper will not be subsidized with Town monies for food and beverage.

Mayor Winfield and the Council chose the 36-hole option
This is with the caveat that we pay-as-we-go and do not bond for any improvements. This is admirable but might be unattainable. Their decision prompted a failed recall attempt by the “Green Shirts.” The “Oro Valley Thrives” people believe that without borrowing money for golf course/community center improvements, the Town will go deeper in debt.

Closing the Overlook will save us about $100,000 and making people pay for the driving range will supplement the CCF about $90,000-$100,000.

Capital Improvements
The Town Manager only forecasted $106,500 for capital improvements for the Community Center Fund (CCF) during FY 2019/20. The last I heard (from former Town Manager Greg Caton and current Town Engineer, Paul Keesler) was that an elevator to make the facility ADA compliant would cost around $400,000 . (This includes the cost of the elevator, installation, and architectural modifications that need to be accomplished).

Canada Hills HOA and the Town are working on an agreement
The Canada Hills Community Association (CHCA), the HOA that surrounds the Conquistador course, is working on an agreement to give the Town $100,000/yr. However if the Town closes the 18-hole Canada Course due to financial strain, it remains to be seen if the CHCA contract will remain, or if they will contribute the money only if the Town continues to operate all 36 holes.

Golf memberships and non-member rounds
Golf membership has been as high as 262. As of April 30, 2020, it is at 260. However, that’s still an improvement over April 2019 when golf membership was 236.

Comparison Of Rounds

However, it is the number of non-member rounds that are the real money maker. Members pay the same whether they play 1 round or 100 rounds. That’s why it’s the outside play that counts.

In FY 2018/19, the number of non-member rounds through April 30th was 29,234. In FY 2019/20, the number of non-member rounds through April 30th is 28,182. That’s 1,052 LESS than the previous year. Keep in mind that the Town’s numbers are for 45 holes of available golf.

The chart at left shows a comparison of the Town’s non-member golf rounds over the past 7 months compared to a public course within 5 miles that has only 18 holes of golf available.

Is Billy Casper going to make a difference? 
Maybe, but it appears that it will only happen if we allow them to manage 18 holes of golf instead of 36. Mr. Mayor, Madam Town Manager, and Oro Valley Thrives: 36 holes is continuing to kill us. How can you continue to justify this?
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Mike Zinkin has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge. He was a commissioned ensign in the United States Navy Reserve. He was an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009 and the Board of Adjustment from 2011-2012. He served on the Town Council from 2012-2016 during which time he was named a Fellow for the National League of Cities University, he was a member of the National League of Cities Steering Committee for Community and Economic Development, and a member of the Arizona League of Cities Budget and Economic Development Committee.

Virtual Vistoso Golf Hearing Not Ready For Prime Time

Vistoso Golf Virtual Meeting Experiences Technical Flaws
Last night, not everyone who wanted to join could join the town hosted general plan amendment discussion of the proposed Vistoso Golf general plan amendment. It took multiple attempts to long into the Zoom.us meeting. An error message said that the meeting ID was invalid. It was not. Apparently, the meeting had a capacity of 240 attendees. Dialing in by phone also did not work. The number was either busy or a “not in service” message was heard. The virtual capacity and phone capacity to conduct such a large scale meeting was simply not there.

Alternative use of "senior living facility" area

The use of Zoom.us was also a challenge for both the town's host, Micheal Spaeth, and the participants. Muting and unmuting the participants was a challenge for allow. Displaying participant video simply did not occur for most speakers. Thus, if you spoke it is likely that you were not seen.

And, for some, the internet connection was simply either not sufficiently reliable or fast enough to allow for a seamless meeting.

Senior Living Facility on hold
We did learn that Romspen no longer has any company interested in building the proposed senior living facilities. Memphis based Spectra Properties has lost interest according to Peter Oelbaum, Romspen Managing Director. Romspen is now proceeding on "a more generic process." As a result, there is a second site plan which shows homes clustered on tiny lots, instead of a retirement home.

Town purchase not yet considered
According to Bayer Vella, Town of Oro Valley Planning Manager, the town has not considered purchasing the property or seeking grants to do such. The applicant's request and the potential alternate use are separate decisions. "That discussion is premature at this time", noting that the town is legally required to hear and consider the applicant's amendment request. The Phase 1 Parks and Recreation Need Assessment, released last week, did note the "Desire to preserve defunct the Rancho Vistoso golf course, at least in part, as an open space conservation area was consistently expressed through all community input opportunities." (Pages 7, 40 and 41)
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Golf Course Management Bids Due Today

Bids due by 2pm
Bids for the management of Oro Valley's two town owned 18-hole golf courses are due today.

Bidders, at their discretion, may also bid operating, at their cost, the Overlook Restaurant. Bidders may also propose managing the 9-hole Pusch Course. That course will be leased by the El Conquistador Resort starting in October.

April 30 selection target date
The town will review each proposal with the goal of creating a short list of potential operators. That list will be determined by March 17. In-person interviews with the companies on this list will be done in late March. The target date for awarding the contract is April 30. The contract commences August 1.

Six potential bidders
Six golf management companies have participated in the pre-proposal process:

• Troon Golf
  Troon is the current course manager
• Billy Casper Golf
  They manage Arizona National, Quarry Pines ( Marana)and Dave White Golf Course (Casa Grande)
• Touchstone Golf 
  They manage three golf clubs in Arizona. These are located in Mesa, Ft. Mohave, and Chandler
• Golf Links:
  We think they operate the Tubac Golf Resort
• Kemper Sports 
  The have one course in Arizona
• CourseCo
  They are a west coast golf course manager.  The Oro Valley courses would be the first they would operate in Arizona

More to follow as the process unfolds.

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Oro Valley Bonded For Golf Improvements In 2016

The town has borrowed to pay for golf improvements
During the recent discussions on the “pay as you go” status of the golf courses, staff presented their forecasts for the next five fiscal years. The forecast shows no debt service. In reality, however, former Mayor Hiremath and his council did borrow for this facility.

Transfers out of the CCF pay for the debt
An inquiry was made by former council member and Oro Valley resident Mike Zinkin as to whether the forecasted “transfers out” of the community center fund ("CCF") included the $120,000 transfer to the General Fund to pay back the initial $1.2 million "loan" from that fund. The answer from Town Manager Mary Jacobs was that the $120,000 was included.

A follow up communication asked about the additional $148,810 forecasted transfer out. The response was that the $148,810 was the debt service for an "Energy Efficiency Bond". That borrowing was used to pay for a new pump on the El Conquistador Course and for an HVAC for the clubhouse that is now the community center.

The bond was issued in the amount of $2million in 2016. They are payable semi-annually from now until 2032.

This manner of reporting the debt service buries the fact that the town has borrowed to pay for golf and community center improvements
LOVE did not previously detect this because of the way the town accounts for the debt service on this bond. Rather than show it as "debt service" in the forecast, it is shown as a  “transfer out.”

According to Town Manager Jacobs, in response to Zinkin's inquiry: “We use fund accounting references in the budget. 'Transfers Out' accurately reflects the accounting of the dollars being transferred to the Debt Service Fund, then applied to the specific expenditure as noted…. The debt service payment for the energy efficiency bonds is then accurately reported in the Debt Service Fund, as the payment is made from that fund and not the Community Center Fund.”

This is not the first time we've been confused in the manner the town is reporting financial information. Check our posting entitled: "Jacobs Presents A Tricky Budget." There we report that the town changed the way things were reported so that readers could not easily compare this past year's budget to prior years.

Sales Tax Golf Subsidy Promotes Irrational Decision on Golf and Tonight “They” Want More!

Green shirts to storm council
Tonight, the Oro Valley Town Council will consider going beyond the half cent sales tax levy to fund golf course improvements. It is not a question of whether to fund these improvements. It is a question of how to fund these improvements, either through borrowing or through the existing revenue stream..

Tonight, however, you will see, in council, the town owned golf course community flood the council chamber to convince council to borrow money to fix their course. Rather than being content with a victory that saw the town keep 36-holes of golf, they’ve chosen to keep pressing for everything.

They are so passionate about this, that one of them took out recall papers on the Mayor and Vice Mayor because both have said that they don't think that the town should borrow money for the refurbishments.

Like spoiled children, they are tethered to their beliefs without any consideration or caring to what yet added funding does to the rest of Oro Valley’s recreation. They may be good neighbors to each other, but they are most certainly not good neighbors to the rest of the community.

Oro Valley residents pay a dedicated half cent sales tax for golf
Oro Valley increased its sales tax by a half cent in 2015 to pay to operate its now municipal golf courses. This amounts to approximately $2.2 million annually. It is 20% of the Oro Valley local sales tax. It is the only recreational facility that has its own dedicated stream of income.

Oro Valley got this tax increase because a property tax was not an option
In conversations with LOVE In 2015, former Mayor Hiremath told LOVE that he wanted to purchase a community center and that the town needed added funds to pay for its operation. He told us that the options were a sales tax or a property tax. He said that he felt that the sales tax was the best way to go because people living out of Oro Valley would also pay for it.

Hiremath knew that residents would never approve a property tax to pay for his adventurous purchase from his major campaign contributor. So he circumvented public involvement by a 4-3 council vote.

Current Council never considered sales tax reduction
Lost in any discussion of the town's ownership and operation of 36 holes of golf a months ago was the fact that residents pay this dedicated half cent sales tax to support it. Lost was any consideration of whether is was fair for them to do so.  Only one council member, Vice Mayor Barrett, mentioned it during the six months of what seemed like endless and sometimes mindless discussion.

We asked Mayor Winfield how he thought people viewed paying this added sales tax. “It’s hard to say. Some people feel good about it. Some people don’t feel good about it. My interest is to reduce the tax subsidy. I would hope that we could get to point where we could reduce the sale tax or eliminate it.”

Apparently, the current council felt no need to even consider this factor in their deliberations at this time. After all, the tax is in place so why bother with it.

We wonder...
If these funds had not been in place, would not their decision have been different? That is, no half cent sales tax... perhaps 18 holes of golf at best, or, perhaps, no golf all. 

Mayor and Vice Mayor Recall Effort Underway

Note: A previous version of this posting stated that Ed Slentz pulled recall petitions for Mayor Winfield and Vice-mayor Barrett. According to Slentz, "That is absolutely and categorically false, untrue and a lie. I have not initiated any such action" (Source: email from Ed Slentz) This is an inadvertent error on our part. Subject to check with town records, we believe that the individual is Thomas Plantz.
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  Council Member Steve Solomon Attends Kickoff Meeting
This past Friday night, some Oro Valley residents met in the Sunset Room of the Community Center to prepare for an attempted recall of Mayor Winfield and Vice Mayor Barrett. Oro Valley Council Member Steve Solomon was standing in the back of the room. He is seen in the right in the picture we have posted. The meeting discussed petition 'Rules for Signing' and a 'Plan of Action'.

Solomon At Recall Meeting
Sunset Room
Community Center
Friday, November 8, 2019

Petition signature solicitation has started
Saturday, petition circulators set up a tent in the dirt lot on the left entering the Community Center. Oro Valley Thrives head Jen LeFevre and Oro Valley resident Mary Murphy were soliciting signatures Sunday. Oro Valley Thrives is comprised of members of the Town of Oro Valley Golf community. Circulators have been seen in other locations since then.

The issue:
Winfield and Barrett's support PAYg for Golf and Community Center Improvements
Lefevre was enthusiastic when, several weeks ago, the council voted to operate two golf courses. Her enthusiasm can be viewed in the clip of the KVOA Video that follows.

She is no longer enthusiastic because last week Mayor Winfield and Council Member Barrett said that they favor “pay as you go” (“PAYg”) financing for golf course improvements. They support this alternative over financing the improvements by issuing bonds or by borrowing from the town's general fund. The general fund is the fund that supports town operations. She fears that this will defer proposed improvements.

Other reasons given for a recall:
•  The council is looking both internally and externally for a police chief. They should select an internal candidate only
• Barrett is not always civil with other council members

• The degrading of the police department

• Winfield and Barrett have shown themselves to be disingenuous and untrustworthy

May 2020 is the election target date

The petition circulators are telling people that May 2020 is the election target date if the petitions are turned in. In order for this to happen, the group will have to submit 3,952 (for Mayor) and 3,668 (for council) validated Oro Valley resident registered voter signatures.
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Winfield To LOVE: Why 36-Holes Was The Right Decision

When it became apparent
“After months of public input, legal counsel, and Town Manager Mary Jacobs’ financial analysis for the various options, it became increasingly apparent to me that the Town could best be served by keeping the 36 holes.” Mayor Joe Winfield said this during his “State Of The Town” address in September.

Last week, we asked the Mayor why he felt this was the best solution. He gave us 5 reasons.

1. There is potential for growth in corporate memberships
“One of the things I believe is that the courses have not been marketed aggressively; and this is something I have heard from the time I was campaigning. I think one constant theme [that some spoke to him about| was that [the courses] were being under-marketed and managed to fail. I’m hoping that we can change that paradigm and be more aggressive at marketing.” By doing that “I believe that there is an opportunity to increase membership by increasing corporate memberships.”

Town of Oro Valley Golf has one corporate member. “I’d like to see 35 new corporate memberships and 10,000 more rounds.”

2. Town Of Oro Valley Golf subsidy levels have been decreasing
According to Mayor Winfield, Town of Oro Valley Golf losses have been slowly decreasing. He sees a trend. They have been “downtrending” over a recent three month period.

3. There was not ‘enough’ difference in subsidy between 18 and 36 holes
Winfield gave significant weight to the town manager’s golf financial projections. “If you looked at the golf options between 36 holes and 18 her financial analysis showed those very similar.” He noted that the 18 holes option did require less subsidy.

4. There are potential purchase contract challenges to any change
According to Winfield: “Given the executive sessions we had with legal team and knowing some of the challenges the town could face legally, that certainly factored in.” The Mayor declined to elaborate because the discussions were held in executive sessions. LOVE and others have reported that the purchase agreement has many clauses that favor the seller. One, for example, gives the seller unlimited veto power over the selection of course management firm.

5. Public support favor keeping the courses
“The preponderance of community input at these various public hearings and emails I received were in favor of golf.”
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Town Staff: "Bond Finance Golf Course/Community Center Improvements"

Staff recommends $3.2 Million in bond financing
Oro Valley Town Manager Mary Jacobs is recommending that the town issue bonds to finance almost half of the $7.2 million in funding proposed for golf course and community center improvements.

This recommendation is in response to the October second Oro Valley council request that staff "...review and provide an analysis and recommendation on financing options for the capital investments needed for the Town’s community center and 36 holes of golf."

Spending pegged at $6.8 million but that may not be all!

Click on picture to enlarge

"A total project budget of $6.8M has been used in the assumptions for the financing options; however, in the future, a detailed project scope will be required to determine an appropriate project construction budget and will likely differ from the $6.8M used for these assumptions." $3.8 million is for golf course improvements while $3.0 million is for community center improvements.

Plan to "borrow" from the General Fund
The staff plan "borrow" $2.1 million from the town's general fund. This is the fund that pays for town operations. The funds are forecasted to be repaid in fiscal years 2021-2024. No interest is to be charged on this debt.

The fund currently owes the general fund $1.19 million.

Bond interest could be taxable to the lender, thus making the bonds relatively expensive
One of the advantages of bond financing that governments enjoy is that the interest paid on their bonds is not taxed to the lender. These are called "tax free" bonds. Thus, the bonds carry the lowest interest rate of all.

bonds compared to corporate bonds. In this case, however, the bond funds are going into a community center and golf fund that includes a nongovernment purpose: The operation of a golf course that is run by a private sector contractor.

 "Staff has not discussed the potential structure of the bonds (specifically bonds for improvements of the golf course) with the Town’s bond attorney to determine if they will qualify for tax-exempt status, given the use of a commercial operator for the golf course."

Sales tax increase would likely become permanent
The bonds, regardless of their tax status, will be backed either by the "full faith and credit" of the town (general obligation bond); or by a lien on sales tax revenue, state shared revenue, and permit and revenue fees (excise tax bond). Otherwise, the bonds would not be sale-able in the market. Either way, the town is obligated for as long as the bonds are in circulation, which will be at least 10 years. Thus, the town will be required to keep its already high sales tax rate in place.

No public vote required.. but history says "no bonds"
The bond decision is entirely up to the council. No public vote is required.

However, council does not have to look far to understand that residents prefer "pay as you go" funding over bond funding.  In the past Oro Valley residents have rejected a handful of bond proposals by at  least a 70% majority.

The residents want local government to live within its means.

In 2013, former Town Manager Greg Caton acknowledged this:  “In 2008, our voters told us they didn’t want to issue bonds for a big-ticket expense [Narjanja Park improvements], and we heard them loud and clear." Instead of bonds, Caton noted: "Our new approach to developing Naranja Park lays down the required infrastructure, then lets us add amenities a la carte, as funding is available, without going into debt or issuing bonds."

Council discussion of this is Wednesday
Town Council will consider these staff recommendations at this Wednesday's meeting. A follow-up discussion will occur on November 20.
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Want to know more about bonds? Read our Bond Primer"
Source of staff recommendations

Oro Valley “Resolves” To Reduce The Tax Subsidy Of Municipal Golf

The goal is the cut the losses
Several weeks ago, the Oro Valley Town Council approved a resolution to reduce the financial losses of its two municipal golf courses. Having lost approximately $10 million in four years, the golf courses were an issue in the 2018 election. The election pledge of now Mayor Winfield to resolve this problem was one of the two issues that won him the election. Winfield’s position differed from that of then Mayor Satish Hiremath, who did not publicly acknowledge that there was a financial problem.

The resolution is the result of a long process
Winfield orchestrated a laborious, six month community discussion. He led a number of public hearings on the matter. The hearings were attended primarily by those who live around or use the golf course. They were concerned that any change in land use would decrease their property value.

The resolution
The result of the process is the resolution LOVE published last Thursday and Friday. The resolution:

• Opens both courses for public play. Members of the courses will have access to tee times they choose. The public will have access to the rest; 
• Affirms the funding of course improvements through bonding, “pay as you go”, or any other funding sources suggested by Town Manager Jacobs; 
• Sets a target level of tax subsidy for golf course operations to be no more than $750,000 within three years. Mayor Winfield established this support level.
• Moves the Overlook restaurant to the first floor of the community center; makes it such that it is “consistent” with a municipal golf course; 
• Accepts approximately $100,000 annually from the Canada Hills Homeowners Association in support of course operations; and 
• Encourages outreach programs for youth to encourage the growth of the sport. 

Other options not discussed at this meeting
The Council did not discuss other options at this meeting, such as operating one course or rescinding the sales tax. Oro Valley’s sales tax is the highest in Southern Arizona, encouraging buyers to purchase big ticket items, like furniture, outside the town.

No change likely for three years
Council Member Rodman noted that the resolution does not include any action to be taken if target tax subsidy levels are not met. Thus, it is possible that the operation of both municipal courses will continue as is for at least the next three years.

Half  cent sales tax levy to continue
The half cent sales tax implemented to support these courses continues. This tax brings in approximately $2.4 annually.

Nationally, municipal golf support declining
Oro Valley’s support of municipal golf comes at time when municipal golf courses across the nation are closing as the sport declines in popularity.

The Golf Course Resolution: Variation B

The resolution affirming the 36-hole option: Variation B
Yesterday, LOVE posted the resolution passed by council last week that affirmed the 36-hole option for Oro Valley's two golf courses. The resolution refers to financial projections called "Variation B".

These projections were included in the presentation to council made by Town Manager Mary Jacobs. It is a 3 page schedule.

The projections are important because they formed the basis of the resolution approved by council.

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This Is The Golf Course Resolution

The resolution affirming the 36-hole option
Last week, The Oro Valley Town Council passed a resolution affirming operation of the town owned El Conquistador and Canada Golf Courses (aka 36-hole option). The resolution contained a number of provisions.

The following is the resolution as provided to us last evening by Joe Lunne, Oro Valley Public Information Officer. It is a draft, as the final minutes of the meeting have not been completed.

The resolution refers to Variation "B" of the financial projections. Variation "B" is the option that includes a subsidy paid by the homeowner associations that surround these courses. We will publish the 3 page projection tomorrow.

Oro Valley Town Council Approves Municipal Course 36 Hole Option

The Oro Valley Town Council approved retaining 36 holes of golf
The Oro Valley Town Council voted 6-1 to retain 36 holes of golf on the town owned El Conquistador and Canada courses. The resolution included a number of stipulations. These were discussed by council well into the night.

The courses will be run as a municipal course with public access to all courses. The courses will require approximately $750,000 in tax subsidy within 3 years, according to projections provided by Town Manager Mary Jacobs.

LOVE will post the resolution and its key supporting financial projection supporting schedule on October 10 and 11.

In the meantime, please enjoy our series: "Get To Know Golder Ranch Fire District".
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Publisher Editorial: Oro Valley Has Golf Derangement Syndrome

It's "Golf Derangement Syndrome"
The high level of anxiety on the part of those who live in and around Oro Valley's town owned golf courses in way overboard. Their angst is being driven by a pending November decision on what the town may do with Oro Valley's 45 hole of golf. Their anxiety amounts to "Golf Derangement Syndrome".

No decision has been made
First, let's set the record straight. Town Council has not made a decision on what to do. At best, it has discussed some alternatives. No decision has been made.

About the only thing clear is that there is a discrepancy in financial numbers. There isn't even consensus among those in power who are to make the decision on what the real financial numbers are.  Are the financial results as money losing as our colleague Mike Zinkin has reported for well over four years in LOVE? Or are the financial results as profitable as alleged by the membership of the golf club?

Spare us the dramatics
But there has been a huge "todo" on the part of some of those who live in and around the courses. If you listen to them, their life is literally going to end if any change is made. They allege that their property values will go down. They allege, the town is liable for this. They threaten law suits. Perhaps, they even threaten a recall election.

For goodness sakes: "Stop the madness"
We're not the only ones who think that the focus on golf and what may happen is out of control. Posting on Nextdoor.com, Oro Valley resident Jim McDonald writes:

"Doesn’t anyone move into a neighborhood anymore to LIVE THERE? This manufactured disaster is destructive. The weather here is going to be the same, the schools are the same, the streets, the utilities, the neighbors, the shopping, the restaurants, the safe environment, the culture, the quality of life and so on and so on. Is everyone suddenly planning on selling? Why allow a few realtors and politicians upset our peaceful little town?? LIGHTEN UP! The sky’s not falling! Mark Twain said it best. “My life’s been full of many tragedies, none of which ever occurred."

Let's see what happens before we leap to conclusions. In the meantime, "Have a good day!"

Guest View-Edward Cooke: "Get The Facts On The Golf Course"

We received the following email from an individual who lives on Carmel Pointe Drive along the golf course, though he does not state such in his email. 

LOVE is based on full-disclosure and honesty. 

To us this means that people who have a self interest in the result of an event should disclose such in their communications to us.  Submitting emails to us that pretend to  be altruistic, when they are indeed self-serving is, indeed, wrong.

We're publishing this as an illustration of what is being "tossed around" out there.
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"LOVE needs to be more fair with their articles regarding the Oro Valley golf courses.

I really believe that all the Oro Valley Parks and Recreation financials need to be included in your articles, not just the lambasting of the golf courses. You would be surprised how many people I have spoken to that have no idea how much money Oro Valley is losing on the Aquatic Center.

Why is the Oro Valley Council spending money ($1.350M) on Naranja Park when the residents of Oro Valley have voted the park down on numerous occasions? How many dollars does Naranja Park generate for the town? How much are we spending to maintain this park annually?

[Comments derogatory to the writer of a previous LOVE guest view were removed. We do not publish personal attacks].  I ask that all Oro Valley residents ... get the true facts and to decide for themselves what the actual numbers are. You will be very surprised.

Lastly, remember if the golf courses are shutdown the town of Oro Valley will suffer substantial tax revenue losses. Winter visitors who rent the golf villas or private homes will no longer come to Oro Valley for their golf. Restaurants, hotels, the Oro Valley Marketplace will suffer greatly. People will lose their jobs. Is this what we want to happen?

Winter visitors are not going to come to Oro Valley to walk on linear parks, bicycle trails left to grow as natural vegetation, surrounded by houses. We have sufficient walking trails all through Oro Valley including Catalina State Park.

The golf courses are now producing revenue. Let them continue. Instead of denigrating golf, work to keep the junior golf, First Tee viable for our young people and keep Oro Valley Green.

I sincerely hope the new mayor and council consider the ramifications closure of the golf courses will cause the community.

Respectfully submitted,

Edward Cooke
Former president Canada Hills Master Association"