Greene Helps Make Town Staff 4% Pay Raise A Reality, Ignoring Financial Warnings...Failing To Participate In Discussion

Town Staff Gets Big Pay Increase 
This year’s budget includes a whopping 4% increase across the board for all employees. That’s the highest level ever given, in a year in which the council was warned that revenues are going to be tight in the future. 

Greene, Joyce-Ivey, Solomon and Winfield supported big increase
That increase was explicitly approved by a slim council majority at the June 19 council meeting, a meeting in which the council approved the $151.2 million fiscal 2025 Budget. Vice-Mayor Barrett had argued in favor of the historical 3% increase.  Council Members Bohen and Nicolson voiced their support for that.

Town “Spreads the Peanut Butter” when it comes to pay raises... No performance based awards...No incentive to get better
When it comes to staff pay raises, Oro Valley spreads the peanut butter! Everybody gets the same percent increase regardless of their performance. 

This contrasts with private sector practice where, as noted by Vice Mayor Barrett and Council Member Bohen, employees are paid based on their performance. As Council Member Nicolson noted at that meeting, who works in the public sector under the across-the-board pay philosophy: “I get the same raises, still same pay, not really a whole lot of incentive to improve.”

Barrett: Individual performance should be individually awarded
“I think it’s important to have some performance-based measures because I think that helps encourage our good employees, and we can help identify the employees that are most likely flight risks. That’s something that’s done regularly throughout all of the private sector and efficient places in other sectors as well,” said Vice Mayor Barrett.

Votava: No. That might make some people unhappy
Town Human Resource Director Andy Votava does not think that is a good idea: “So, in my mind, I don’t think we’re well-equipped to implement a pay-for-performance system because the danger or the hazard is that if we don’t do it well, some employees may take issue with that. Potentially, anybody can file a lawsuit, but it could lead to complaints.” 

Greene supported this massive increase in spending though he failed to even participate in the discussion

Mo Greene, who is running for reelection, claims to be fiscally responsible. However, his actions, including his decision to support this 4% across-the-board pay raise despite looming financial constraints, demonstrate the opposite. He was so disinterested in the conversation on the pay increase that he did not participate in it. Not one word!

Indeed, Greene's disregard for fiscal responsibility was evident when, at the Sun City forum, he was asked how he would demonstrate fiscal responsibility. He merely echoed Council Member Solomon's statement in a May council meeting: "We need to separate our wants from our needs." Greene then referenced something he did 20 years ago while working the New England Journal of Medicine, without citing any actions he has taken on the council in the past four years. That's because there were no examples to cite. 

Next Tuesday's election is a clear opportunity for voters to hold him accountable for his demonstrated lack of fiscal responsibility. 

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(Source: June 19, 2024 Oro Valley Town Council Meeting, Item 5)

2025 TMRB: Differences in Personnel Costs Highlight The Variety of Skills Needed To Keep Oro Valley Successful

Now is the time

No added staffing in 2025 TMRB

The Town of Oro Valley has 425 full-time equivalent employees. The 2025 TMRB calls for keeping that number essentially the same in 2025. The total 2025 TMRB cost is $43.3 million, which is 31% of the $137.4 million in identified spending in the TMRB. 

"Big Four" Departments" dominate personnel spending...

Yesterday, we reported that 80% of all TMRB identified spending is attributed to four departments. These same four departments employ 77% of the town staff, comprising 76% of the total TMRB personnel cost.

...and have the most visible roles in the community

One would expect to see the bulk of Oro Valley’s workforce supporting these four departments (Public Safety, Public Works, Water, and Parks) because each department’s responsibilities require people “doing stuff you see.” Indeed, we see these people every day. The police patrol our streets and neighborhoods; public works crews rejuvenate our roads; water crews fix pumping facilities; and parks personnel mow lawns and water the new trees planted.

Disparity in personnel cost among departments...

There is a significant range difference in the average personnel cost per person across different departments (see panel right). The town's TMRB average cost per employee is $102,000. The average cost per public safety full-time equivalent (FTE) personnel is $129,500, while the average Parks and Recreation FTE receives less than half of that. Water and public works personnel costs per FTE are also much lower. The Legal and Finance departments have an average personnel cost per person greater than that of the police department. Other departments, such as information technology and the town manager's office, also have relatively high personnel costs. 

... likely reflects the nature of the work and labor market conditions

These differences likely reflect the varying skill levels required for specific jobs in these departments and prevailing labor market conditions. Understanding these differences is crucial for informed budget planning and resource allocation in the town.  

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Council to Consider Land Swap and One-Time Town Staff Compensation Increase Tonight

Lasting impact

There are two items on tonight‘s Oro Valley Town Council meeting agenda that will have a long-term impact on the town. One, is a land swap that will increase the size of the parking lot at the Community Center. The other is a one-time increase in compensation of the town’s employees.

Land swap will increase Community Center parking
There is a lot adjacent to the Community Center parking lot. It is privately owned. It is a one acre lot. The town has negotiated a land swap for land which is approximately the same size located in Rancho Vistoso. The swap, which is likely to be approved by council tonight, will enable the expansion of the town’s very crowded Community Center parking lot. This will also provide the opportunity to improve mobility challenged access, which is something that has been neglected by the town until recently. There is no monetary cost to the town for this land swap.

Town staff will get one time bump in compensation 
Council is being asked to approve a “2022-23 General Pay Plan” for town employees. The pay plan does not show the increases, but does show the new levels of compensation in tiers. The tables, which comprise 18 pages, are the result of study prepared by a consulting firm. The tables have 37 job classifications with a compensation level for each.

It is curious to us that the Town Manager midpoint compensation is almost $230,000 while the Police Chief’s is $172,000. That is a whopping $58,000 difference. The Police Chief is far more critical to the town than the Town Manager. Fortunately, the Police Chief reports directly to council and should be compensated based on their judgment, not based on some table.

The consulting firm’s study is not included as part of the agenda materials. Supposedly, the consulting firm compared town employee compensation to other communities. We cannot provide details of these comparisons until we receive a requested a copy of the consultant study. We do wonder, however, how council can make a decision on the pay plan without vetting the study at a council meeting. 

“The additional cost to implement this pay plan is approximately $825,000 across all funds and includes pension costs, Social Security, and Medicare contributions. The cost of this change was included in the Town’s budget adopted on June 15, 2022.” [Source: July 6, 2022 Meeting Agenda]

These compensation increases are in addition to the step and merit compensation staff is to receive this year.

2023 Town Manager Recommended Budget Reduced to $148 million... Hearing Tonight

Town Public  Hearings Tonight

Tonight, Town Manager Mary Jacobs will ask the Oro Valley Town Council to approve a spending limitation of $147.7 million for fiscal 2023. This request is part of the first public hearing that the town is holding on the 2023 Town Manager Recommended Budget (“TMRB”). 

Requested amount is less than previously reported

The amount being requested is about $11.5 million less than was submitted in the TMRB on which we have reported.

Reduction in the request is the net result of changes in the funding requested of three items

• The General Fund request was reduced by about $600,000. That reduction is the net result of two items: An estimated increase of $2.7 million in state shared income tax revenue; and an increase in recommended personnel spending. The town manager is adding funds to provide for additional capacity for implementing the classification and compensation study currently being performed by an outside firm. 
• One of the largest recommended capital expenditures this year was in the water resources fund. This request was reduced by $10.3 million due to adjustments in the spending on partnered portions of the Northwest recovery project (NWRRDS). That is a project the town is doing in cooperation with the Town of Marana and with Metro Water to bring water more directly from a CAP Reservoir in Avra Valley to Oro Valley.
• The Town Manager  reduced her requested capital fund monies by $3 million. This reflects two items. One is a shift in the source of the funding; the other is changes in the estimated cost of some road projects.  

Spending requested for town operations remains the same

The operating portion of the TMRB (with the exception of the personnel cost spending increase noted previously) remain the same. So let’s take a look at those personnel costs. 

TMRB request is for staff to grow to 414

This year’s TMRB includes 414 personnel. That is an increase of nine full-time and four part-time positions. TMRB personnel spending is $89.3 million. 

 
Two departments are 52% of total personnel cost and 43% of all personnel (panel right)

Police

The Police Department is asking for funding of 139 positions. This adds two police officers and a civilians public information officer. An additional telecommunications position is also sought. The addition of the public information officer frees a sergeant position for field work. According to Oro Valley Police Chief Kara Riley, these staff position additions fulfill all staffing needs for 2023.

 

Water

The water utility has one-third of the town's personnel spending.  The utility currently has forty full-time and 1 part-time position. The department has no TMRB request for added staff.   

Public Works and Parks and Recreation

Public Works and Parks and Recreation are seeking to add four positions each. Public Works is responsible for building all the planned parks facilities. That will be a huge focus of their activity this year. The Parks Department itself wants to add staff at the aquatic center. The TMRB also seeks to add one Park monitor to help cover hours in special events of town parks.

 
Big raises due?
The town is undertaking a competitive wage study. As previously reported and as noted above, the result of the wage study will have a major impact on personnel cost. “The recommended budget includes $1.3 million in the general fund set aside for implementing the final pay plan which is yet to be brought to council. [The TMRB] also includes funds to continue normal step increases for all eligible town employees.”

 
According to Town Manager Jacobs, Oro Valley has fared better than other organizations when it comes to employee turnover and resignations.

Also tonight...Water rate hike!

Tonight's town council agenda includes a public hearing on the proposed 2022-23 water rate price increase. The council will likely approve the rate hike once the public hearing is closed.

Bits and Pieces

What’s ahead for the Vistoso Preserve
”The Conservation Fund will hold the property until July 1, 2022.  They will provide some limited maintenance for the property until that time and can provide you with the scope of work. “The Town will open and maintain the restrooms beginning July 1, 2022 and will focus on addressing various public safety concerns in the short term.  We will involve the community in developing a plan for the property that conforms to the conservation easement sometime next fiscal year.” (source: Email from Mayor Winfield).

Friends of Pusch Ridge Ridge Golf: Why we care about water

"Climate change. Droughts. Changing weather patterns. Infrastructure needs. Bigger bills.   Water is a controversial topic, especially in dry climates like the Sonoran Desert. Yet our website includes water-related articles and we may from time to time share other information regarding water use.  

You might ask why? Friends of Pusch Ridge Golf is not a conservation group, we don’t have a political agenda, and we are not water experts.  Simply put, we are supporters of the Pusch Ridge Golf course, and as supporters we recognize that our “Fast, Fun, Affordable” golf course requires a certain amount of water.   Our job is to do our best to ensure that PRGC remains the thriving, valued town amenity and commercial enterprise it has proven to be - nothing more, nothing less." 

View their August 2021 article on Water Conservation here  and their  February 2022 article title “Water is Vital to Economic Vitality” here.  (Source: Friends of Pusch Ridge Golf, February 16 Newsletter)

2022-23 Budget process starts... Staff compensation will be one focus area
"Departments are fully engaged in the budget development process for next fiscal year, and my team and I are carefully reviewing local, regional and state data for trends that will impact revenues and expenditures." The town hired a consultant to perform a staff compensation study. The result of the study will be included in the budget. (Source: Town Manager's Executive Report To Council, February 2022). 

The last compensation study the town performed in 2014 resulted in significant across the board staff compensation increases, the creation of self-funded insurance, and an on site health and wellness clinic (Source).

2021 Popular Annual Report is available
Want to know what's going on financially with the town but don't want to dig through the traditional annual report? Then the Popular Annual Financial Report (PAFR) for the fiscal year ending June 30, 2021 is just for you!

"Each year, the Town of Oro Valley produces an Annual Comprehensive Financial Report (ACFR), which outlines the Town's financial position and operating activities, and includes audited financial statements; however, due to its length and scope, the ACFR is not very reader-friendly. In order to make the Town's financial information more accessible to the public, Oro Valley began producing the award-winning PAFR in 2012. The PAFR includes a summary of accomplishments, net assets, activities, revenues, expenditures, debt and financial ratings and a snapshot of historical trends in these areas. To view the PAFR online, click here or search for PAFR at www.orovalleyaz.gov." (Source: Oro Valley Vista, March 2022)

Bits and Pieces

Pusch Ridge Golf "Off to a great start"...But no "lessor" in sight
At Wednesday's Town Council Meeting, Town manager Mary Jacobs' reported activities that have been taking place at the Pusch Ridge golf course. The course opened in November and is "off to a great start." Among other things, she noted that the course has hosted two successful frisbee golf tournaments. 

Tony D'Angelo, President of the "Friends of Pusch Ridge Golf", discussed the remarkable success of the course. 3,958 rounds of golf were played on the course in November and December.  That is equal to total rounds played in 2020, the last year the course was open. "We are confident that we are going to more than exceed the budget."

Neither speaker reported on whether and how the town is taking on the challenge or reducing the enormous amount of drinking water used to irrigate the course.

The town has yet to find someone to lease the course. "Per Town Council’s direction, the Town issued a Request for Proposals (RFP) on November 1, 2021, to competitively solicit proposals for an operating lease at the Pusch Ridge Golf Course. The Town received one proposal from HGM Golf. The proposal was evaluated by Town staff relative to the requirements of the RFP and the specified evaluation criteria. At its conclusion, the proposal was deemed to insufficiently demonstrate that HGM is capable of successfully leasing and operating the Pusch Ridge Golf Course, and as a result, the Town will not proceed with further contract award actions with this firm. The Pusch course continues to perform well and is ahead of revenue projections for the season." (Source: Town Manager January 2022 Executive Report, P1)

Financial Update: "Things continue to look positive"
"Things continue to look positive in all our funds." This was the opening comment of Wendy Gomez, Oro Valley Finance and Budget Administrator, as she covered the town's financial situation through November.  According to Gomez, all general fund revenue sources are trending positive. Expectations are that actual revenues will exceed budget by $4.8 million. That's a 10% increase over budget.  At the same time, expenditures are expected to be $1.1 million under budget. The net result is an almost $6 million over budget result for the General Fund.

Other funds, including the Community Center Fund, are projected to be either on budget or slightly better than budget.

Town undertaking staff compensation study
The town is undertaking a study its compensation to employees. "The Town is finalizing its evaluation of proposals for the planned employee classification and compensation study. The City of Tucson, Town of Sahuarita and Town of Marana have all conducted similar studies recently that have led to some adjustments in their respective employee pay structures, either planned or implemented. The Town will be following the same process. Being the final municipality in the region to do this puts us in an advantageous position regarding salary comparisons. We expect to have the study completed by this summer and I plan to include funding in my FY22/23 Recommended Budget for implementation once finalized and approved by Council. Based on our counterparts’ changes or planned changes to pay structures, we do anticipate our own pay plan adjustments will be necessary to keep pace and remain competitive." (Source: Town Manager January 2022 Executive Report, P1))

The last compensation study that Town did in this area several years ago. It resulted in significant increases in employee compensation.

PSPRS Investment performed at "historic levels" in 2021
The town invested $27 million last year remind insurance in the Public Safety pension fund. Responding to a question of Vice Mayor Barrett at Wednesday's council meeting, Town finance Director and Gephart stated that the investment performed at historic levels in 2021. "The return for the fund was over 27%." 

This result is a tremendous win for the town. Town borrowed the $27 million they invested in the fund at an interest rate of approximately 3%. That investment earned a return far greater than that.