New Taxes not a "Silver Bullet"... Part Of A Package Of Actions For Sustained Oro Valley Fiscal Stability

Town has identified and council has considered three new taxes to cover possible future spending shortfall

In March, Oro Valley Finance Director David Gephart presented a five-year forecast of the Town’s General Fund showing that expenses are projected to exceed revenues beginning in fiscal year 2029–30. The General Fund—one of the Town’s many funds—supports day-to-day operations, capital spending, and transfers to other funds. In response to the projected financial shortfall, Town staff identified several ways to close the gap. These included implementing three new taxes already in place in nearby communities: a commercial rental tax, a use tax, and a telecommunications tax. Together, these taxes, along with long-overdue fee increases for parks and recreation programs, would close the roughly $3 million funding gap identified in the forecast. The Council approved the  Parks and Recreation fee increase in October. As reported last week, the Council is expected to vote on them at its next meeting.

 
New taxes are not a "silver bullet" but are part of a set of actions to insure financial sustainability

Though much has been said by town staff in favor of the proposed new taxes, these taxes are not a “silver bullet” for ensuring Oro Valley’s long-term financial sustainability. According to Mayor Joe Winfield, speaking at the October 15 study session on the new taxes, “We’re looking at this as one of many tools,” he said, emphasizing that the Town must continue to pursue multiple strategies to strengthen its financial position rather than relying on any single measure.  Winfield pointed to the Town’s strategic refinancing of its public safety pension debt—which has saved about $3.4 million—as an example of responsible financial management. He also cited other ongoing efforts to improve fiscal sustainability, including pursuing annexation of retail rich areas, working to reduce retail sales leakage, and supporting population growth through approved housing projects now under construction. Winfield said that all these actions together—not any single one—will help build a stronger financial foundation for the Town.

While town focuses on maintaining efficient operations

Winfield also stressed that the real solution also lies in maintaining an efficient municipal government and practicing disciplined budgeting. Finance Director David Gephart believes that the Town is running a “tight ship.” He emphasized that Oro Valley has been proactive in managing expenses and maintaining fiscal discipline. Gephart outlined several ongoing efforts to control spending, including limiting staff growth, consolidating positions where possible, and delaying or reprioritizing capital projects that are not immediately necessary. The Town is also using technology to improve efficiency, reducing reliance on outside consultants, and closely monitoring contracts and operating costs. He noted that departments have been asked to identify savings and that the Town continues to maintain healthy reserves without relying on short-term borrowing. Gephart said these measures have allowed Oro Valley to preserve high service levels even as costs increase and revenues grow more slowly, demonstrating that the Town is already “doing more with less” while continuing to strengthen its long-term financial position.

 
Impact of new taxes on businesses and tenants remains uncertain

Town staff said they do not believe the proposed new taxes would place a significant burden on residents or the business community. The only direct impact on residents would be a small increase in their cell phone bills. Regarding the commercial rental tax, Finance Director David Gephart said the effect on tenants would depend on lease terms and market conditions—some landlords might absorb part of the cost to stay competitive, while others would likely pass it through to tenants. Councilmember Nicolson initially disagreed, noting that most Oro Valley commercial centers are owned by large, out-of-state corporations that operate under strict financial models and are therefore unlikely to absorb new costs. Later in the meeting, however, Nicolson pointed out that Oro Valley’s commercial vacancy rate—about 14 percent—represents an oversupply condition that could limit a landlord’s ability to raise rents, meaning some may have to absorb at least part of the additional expense themselves.

Council decision will shape Oro Valley’s long-term financial path

Soon, the Town Council will decide whether to move forward with all or some of the proposed new taxes. The decision will determine how Oro Valley balances its budget in the years ahead—whether through new revenue sources, continued cost control, or a combination of both. Whatever the outcome, the discussion has made clear that maintaining the Town’s long-term fiscal stability will require steady attention, discipline, and a mix of strategies rather than reliance on any single solution.

- - -

Does Oro Valley Really Need Three New Taxes?

Why some say approving three new taxes now may be premature
Yesterday we reported that town staff have asked the Oro Valley Town Council to consider approving three new taxes—a commercial rental tax, a telecommunications tax, and a use tax—that together are projected to generate between $930,000 and $1.88 million annually. 

Tonight, the council will consider approving these taxes.  While staff argue the taxes are needed to address long-term financial pressures, some believe approval may be premature based on what has and has not been analyzed to date.

Today, we present the alternative case for caution.

The projected funding gap is based on assumptions that may or may not come to fruition... alternative scenarios not considered
The current discussion was triggered by a long-range financial forecast presented last year that identified a potential structural funding gap beginning in fiscal year 2029–30. That forecast was based on a host of assumptions related to future spending growth, revenue trends, and service levels. Forecasts are widely used as planning tools, but they are not predictions. Some suggest that policy decisions with long-term consequences, such as new recurring taxes, should be informed by a range of alternative projection scenarios that explore different “what if” conditions.

Cost-control efforts are described but not fully documented...perhaps "reengineering" is needed
Town staff state that budget reductions have already occurred and will continue, and that reallocations within existing funds have been used to manage rising costs. However, the materials provided to Council do not document a zero-based budgeting review, a department-by-department operational analysis, or an independent efficiency or performance audit. Without this level of detail, some believe it is difficult to assess whether current services are being delivered as efficiently as possible or whether additional internal adjustments could be considered.

New revenue is proposed before structural changes are evaluated
The proposed taxes would create new, ongoing revenue streams. Once adopted, such taxes are rarely reduced or eliminated. Some argue that before committing to new permanent taxes, the Town could examine whether structural changes—such as staffing models, program scope, technology use, or service prioritization—might slow long-term cost growth or improve efficiency.

Business impacts are not fully explored
Two of the three proposed taxes—the commercial rental tax and the use tax—would primarily affect businesses, while the telecommunications tax would affect both residents and businesses. The staff materials do not include an economic impact analysis, a competitiveness review, or an evaluation of how the proposed taxes might influence business behavior over time. Some note that even relatively modest taxes can affect business location, expansion, and investment decisions, particularly when layered onto existing costs.

Alignment with other towns is context, not analysis
Staff note that neighboring communities already impose commercial rental, telecommunications, and use taxes, and that Oro Valley is an outlier in not doing so. While this comparison provides useful context, some believe alignment alone does not constitute a full justification. Communities differ in service expectations, cost structures, and fiscal strategies, and comparisons do not address whether Oro Valley has fully examined other available options.

Projected revenue generated is de minimus ... could be "covered" without any change in service levels
The amount of revenue projected from the proposed taxes is relatively small when viewed in the context of the Town’s overall budget, roughly $2 million within a $150 million budget. Some suggest this scale raises the question of whether improvements in operational efficiency or adjustments to non-essential spending could address the projected 2030 shortfall before new taxes are adopted.
- - -

Town Staff Advocate For Three New Taxes

Staff provides council with lengthy discussion of why new taxes are needed now
This Wednesday, the Oro Valley Town Council will consider whether to move forward with three new taxes: a commercial rental tax, a telecommunications tax, and a use tax. According to staff estimates, the three taxes together would generate between $930,000 and $1.88 million per year, with $1.88 million as the upper bound. The commercial rental tax would apply to leased commercial property and primarily affect businesses, as the Town already charges a 2% rental occupancy tax on residential rentals. The telecommunications tax would apply to communication services and would affect residents and businesses alike. The use tax would apply to Oro Valley business purchases made outside Arizona for which a sales tax should have been collected but was not. These are items a business buys for its own use.

Town staff believe new taxes are necessary at this time for seven reasons.

Projected revenue shortfall in fiscal 2030

The immediate trigger for this discussion was a long-range financial forecast presented last year by Finance Director David Gephart, which showed that, based on a host of assumptions, the Town could face a structural funding gap beginning in fiscal year 2029–30. The forecast indicated that existing revenue sources may not be sufficient to sustain current service levels over the long term as growth-related revenues slow and operating costs continue to rise. Staff identified the need to evaluate potential new, ongoing revenue sources well in advance of that timeframe, leading to the current discussion of possible tax options.

Rising operating and infrastructure costs
Town staff point to sharply rising costs as a primary justification for the new taxes. Inflation has increased the cost of providing core services, including police, parks, public works, and planning. Staff report that General Fund program costs have increased substantially since 2015, while pavement preservation and public safety costs have risen particularly quickly in recent years. According to staff, these cost pressures are ongoing and cannot be addressed through one-time solutions.

Slowing or constrained revenue growth
Staff also cite weakening revenue trends. Sales tax revenues, which fund a large share of Town operations, have shown little growth in recent years and have declined slightly. At the same time, Oro Valley is nearing residential build-out, which limits future growth-related revenues. Staff argue that this combination creates a structural imbalance between revenues and expenditures that must be addressed with new recurring revenue sources.

State actions limiting local revenues
Another justification raised by staff involves actions taken by the State Legislature. Changes to state income tax rates have reduced the amount of state-shared revenue flowing to municipalities, including Oro Valley. Staff emphasize that these decisions are outside the Town’s control and have permanently reduced an important General Fund revenue source.

Unfunded obligations and capital pressures

Staff also highlight new and existing obligations that lack dedicated funding. These include increased transfers to the Highway Fund to offset rising road maintenance costs and the recent purchase of a new police headquarters that currently has no funding identified for reconfiguration and build-out. Staff state that without additional revenue, these pressures will continue to strain the General Fund.

Alignment with neighboring communities’ tax structures
Finally, staff argue that Oro Valley is an outlier among nearby communities. Marana, Sahuarita, and Tucson already impose commercial rental taxes, telecommunications taxes, and use taxes. Oro Valley currently does not. Staff contend that adopting these taxes would align the Town’s tax structure with neighboring jurisdictions and capture revenues that other communities already rely on.

Staff believe they are doing all they can to keep spending under control
In their materials to Council, staff state that budget reductions have already occurred, according to staff, and will continue as part of the upcoming budget cycle to address what they describe as structural imbalances. Staff cite reallocations within existing funds, ongoing efforts to manage rising costs through the annual budget process, and steps taken to absorb inflation-driven increases in areas such as pavement preservation and public safety. While acknowledging that costs continue to rise, staff maintain that these measures are necessary but not sufficient on their own, leading them to recommend new revenue sources to sustain current service levels.

Tomorrow: An alternative case for further analysis and consideration

To date, no organization or individual has presented a clear, comprehensive case against the proposed taxes. An alternative perspective can nevertheless be developed from the existing record, and LOVE will present that perspective in tomorrow’s article.

- - -

Oro Valley Council Continues Discussion On Adding Three New Taxes

Three new taxes continue to be under consideration
The Oro Valley Town Council met October 15 to continue its study session on three proposed taxes — a use tax, a telecommunications tax, and a commercial rental tax. These taxes are already collected by Tucson, Marana, and Sahuarita. Town staff said they would help maintain services as costs rise and state-shared revenues flatten. We have reported on the council's four previous discussions of this item.

Estimated annual revenue impact of up to $2 million
Finance Director David Gephart said the three taxes could generate between $930,000 and $1.9 million annually:

• Use tax: $375,000 to $600,000
• Telecommunications tax: $130,000 to $280,000
• Commercial rental tax: $425,000 to $1,000,000

He said the goal is to diversify the Town’s revenues, reduce dependence on sales tax, and avoid introducing a property tax.

Staff would like to see funds dedicated for capital spending

If adopted, staff recommends that revenue from the new taxes be earmarked by Council for capital projects such as the newly acquired Police Department building, which currently lack a dedicated funding source. Final money dedication would require Council action (ordinance, fund setup, or budget transfer). Otherwise the funds can be used for any town operating or capital need. Council has not taken a position on this.

Businesses say new taxes would hurt competitiveness
Oro Valley Chamber of Commerce President Kristen Sharp told the Council that the commercial rental tax would make it harder for local businesses to remain competitive when operating costs in Oro Valley are already higher than in surrounding areas. She said businesses are “operating on tight margins” and warned that higher costs could discourage new tenants or drive existing ones away.

Commercial real estate broker Robert Tomlinson presented data showing Oro Valley’s retail vacancy rate at 12.8%, more than double the Tucson-area average of 5.9%. He said the new tax could further weaken the retail sector and increase vacant space.

Move would diversify Oro Valley's revenue stream
Joyce Garland, a 25-year Oro Valley resident and former Chief Financial Officer for Tucson, supported adopting all three taxes. She said state-shared revenues are declining because Oro Valley’s population is growing by less than one percent a year while new cities, such as San Tan Valley, are being incorporated. That means Oro Valley’s share of the statewide revenue “pie” continues to shrink. Garland said a broader mix of local revenues would give the Town flexibility and protect services from future shortfalls. The Budget and Finance Commission, which she chairs, voted September 16 to recommend approval of the proposals.

Implementation of taxes would not happen until July of 2026 if they are approved by council
Gephart plans to bring implementation proposals back for another study session before any vote. He explained that the Arizona Department of Revenue recently changed its reporting process for municipal tax code updates, and Oro Valley is the first community to use it. Because of that, there are questions about timing and notification requirements that must be resolved before moving forward. He said staff may recommend a phased implementation beginning in July 2026. 

Council weighs fairness and economic impacts
Councilmember Robb said she supports the use tax because it applies broadly and fairly but remains undecided about the other two. Vice Mayor Barrett questioned whether the rental tax would truly harm competitiveness, noting that neighboring towns already have similar taxes. Councilmember Nicolson said that because most Oro Valley commercial centers are owned by large, out-of-state corporations. These are landlords who are unlikely to pass the added cost on to their tenants — many of whom are small, locally owned businesses. He explained that these are landlords operate under corporate financial models that prioritize maintaining profit margins, leaving little flexibility to adjust lease terms or absorb new costs locally.

Next step: Up for public hearing with council vote on November 5
No formal action was taken at this session. At the beginning of the meeting, Finance Director David Gephart said staff intends to bring the three proposed taxes back to the Council for possible action at its next regular meeting on November 5.

- - -

- - -

Oro Valley Considers New Local Taxes to Fund Potential Future Revenue Gap in 2029-30

Town looks to close future "way out" projected revenue gap
Oro Valley is considering adding several new local taxes in response to projections by tow staff that the Town will face a revenue shortfall by 2030. At last week's council study session, Town staff outlined three possible new taxes for the council to consider: A use tax, a telecommunications tax, and a commercial rental tax. These taxes are already in place in nearby communities such as Tucson, Marana, and Sahuarita, but are not currently collected in Oro Valley. The main goal is to generate additional revenue to help maintain the Town’s financial stability in the years ahead.

Understanding the Use Tax: Who pays and how it works
The proposed use tax would apply to goods purchased out of state or online and brought into Oro Valley for use. Technically, both businesses and individual residents are responsible for paying this tax if the seller did not collect Oro Valley sales tax at the time of purchase. In practice, most compliance comes from businesses, since they are subject to tax audits and must routinely report these purchases. For individuals, use tax is mainly self-reported and rarely enforced, except for large items like vehicles, where tax collection is linked to registration. The Town acknowledges that use tax collection from individuals is challenging and not always realistic. The primary intent is to create a level playing field for local retailers and generate new revenue for capital improvements. Based on the town’s projections, the use tax could generate from $375,000 to $600,000 annually. 

Telecommunications Tax would impact local consumers
A telecommunications tax is also being considered, which would add a charge to every cell phone bill in Oro Valley. This tax is already common in other Arizona towns. If adopted, it would mainly affect local residents, since the fee is typically passed directly to the consumer. Vice Mayor Barrett noted that many residents are already seeing several fees and taxes on their phone bills and expressed concern about adding another cost. Town staff estimate this tax could bring in about $650,000 each year. 

Commercial Rental Tax would affect businesses and individuals
The commercial rental tax would apply to all businesses renting commercial space in Oro Valley, including offices, retail stores, and self-storage units. In most cases, business tenants would pay the tax, but those renting storage units—often individuals—would also be affected. Council members, including Mayor Winfield and Councilmember Murphy, raised concerns about the impact on small businesses, especially given other rising expenses. The projected annual revenue from the commercial rental tax is about $1.1 million. 

Council shows mixed reactions to the new taxes
Council members expressed a range of reactions to the proposed taxes. Mayor Winfield was clear about his reservations regarding the commercial rental tax, stating that it "gives me the most heartburn" because of its potential impact on small businesses. Councilmember Murphy also emphasized the need to protect local entrepreneurs. Vice Mayor Barrett expressed strong concern about the telecommunications tax, noting that "many residents are already seeing several fees and taxes on their phone bills." While there was less direct opposition to the use tax, it was generally regarded as more feasible, since it brings Oro Valley in line with neighboring towns and primarily targets out-of-town and online purchases.

LOVE's Opinion: There is no need at this time for the town to implement new taxes..there is much the town can do to meet the spending challenge in other ways

Staff is recommending new taxes when there is no immediate need. The need, according to them, is based on a forecast they developed about a possible revenue shortfall in 2030. It is their forecast—a point estimate that makes many assumptions and could be completely wrong by then. In addition, the Council should not approve new taxes until it has undertaken an independent, third-party study, reporting directly to Council, on efficiency and potential ways to reduce spending and costs. It has been many years since the last such independent study was done—specifically, in 2008—and much has changed now that the Town has matured as a community. It is not possible for staff to “do surgery on themselves.” Like most organizations, they do not have the ability to critically examine and remove activities that are no longer needed. Therefore, the study must report directly to the Council. Finally, the only area that might be excluded from such a study is the police department. The reason is not that the police department should never be reviewed, but that including it would create unnecessary anxiety in the community among those who strongly support our police force. That is exactly what happened with the 2008 study.

You need to get involved
As we reported last week, you need to get involved. Last week, Town staff emphasized that a community engagement process is underway to gather feedback on these proposed taxes before any final decisions are made. A series of online public meetings and outreach events are scheduled for July, but several council members raised concerns that holding sessions during the middle of summer could limit participation, as many residents are away or may not be aware that important tax changes are being considered. Council members also noted that many residents may not fully understand the details or impact of the proposed taxes, and they encouraged staff to expand and improve the outreach effort to reach a broader audience. The engagement process will include online sessions and feedback opportunities, with additional input to be sought through town boards and commissions, leading up to council consideration later this year. LOVE will continue to follow this issue and will report on any other fee or revenue changes being proposed.

- - -

Next Tuesday: Stormwater Fee Changes In the Offing

Next Wednesday: Increases in Facility Use and Rental Fees Are On The Table

- - -

Oro Valley Staff Targets October Council Approval of New Revenue Sources and Fee Increases

Fee increases and new taxes vetting continues

Resident participation in July’s community outreach meetings on proposed taxes and fee changes was limited. According to Finance Director David Gephart, about 30 residents attended across three online sessions focused on parks and recreation fees (July 9), new taxes (July 10), and the stormwater utility fee (July 15).

Gephart: Fee increases and new revenue sources needed because of rising cost of public safety and roads
Gephart told residents at the July meetings and the Budget and Finance Commission in August that new revenues are needed because costs are rising faster than revenues. Police services have grown 23% since 2021, absorbing 80% of General Fund growth. Road maintenance costs have more than doubled in the same period, increasing 107%. Meanwhile, sales tax revenues have been flat for three years, and a retail leakage study showed Oro Valley loses about $1.8 billion annually in taxable sales to surrounding communities, equal to $45 million in foregone revenue.

Gephart added that the stormwater utility fee currently covers only operations and not capital projects, while parks and recreation fees are being adjusted to better reflect costs. The goal of the proposed changes, he said, is to diversify revenues, reduce reliance on debt, and direct new funding toward capital projects such as police facilities, vehicle replacement, and road maintenance.

Resident outreach met with low attendance
Approximately thirty residents participated in the three sessions. Attendance was low and may not reflect the views of the broader community. Vice Mayor Barrett noted at a June study session that scheduling three meetings close together in July, a peak holiday and vacation period, may have limited participation.

Residents who participated raised concerns about fairness, timing, and process more than about the size of the increases. Parks and recreation questions focused on whether fee changes treated age groups and activities equally. At the new taxes session, participants questioned the need for new revenues now, discussed the possibility of a property tax, and cautioned against rushing decisions before full engagement. At the stormwater meeting, comments focused on development practices near washes and a preference for smaller, steady increases.

Gephart also reported on business outreach
Gephart has met with the Oro Valley Chamber Board, Roche, and other representatives. A Chamber-hosted forum is scheduled for September 11. The Chamber suggested a property tax would be fairer, questioned whether the proposed revenues would be sufficient, and urged more business-friendly policies. Roche’s main concern was the telecom tax, while small businesses and residents expressed worry about the commercial rental tax and its impact on already high rents. Gephart said these discussions have been helpful in identifying concerns.

Budget and Finance Commissioners’ question the rental tax
Commissioners asked Gephart several questions during the August meeting. Gephart said a commercial rental tax would be difficult to pass, and noted that Council had previously advised staff to avoid relying on this tax. Commissioners also noted that higher rents in Oro Valley compared to Tucson and Marana could make such a tax unfair. Gephart acknowledged Oro Valley rents are higher but said the tax would create equity since the Town currently collects nothing from many services such as medical offices and storage facilities.

Commissioners shifted their attention to a tax change not on the agenda: a small sales tax increase. Gephart said that might be considered later as a “step two,” but the first step is to adopt the three tax categories used in neighboring towns. Commissioners also asked about the reliability of revenue estimates. Gephart noted the use tax could generate between $900,000 and $1.8 million annually but is volatile. He acknowledged that if revenues came in low, the Town might need to consider additional measures in the future, but said possible relief could come if required police pension contributions decline.

Gephart: Revenues intended for capital items
Gephart emphasized that revenues from new taxes are intended for capital needs such as improvements at the newly purchased police facility, police vehicle replacement, and continued road maintenance. At present, only stormwater utility fee revenues are legally dedicated to the Stormwater Utility Fund. All other new revenues would go into the General Fund, and Council would need to act if it wished to dedicate them specifically to capital purposes.

Gephart targets October for council vote
Gephart hopes to present a firm vetted proposal to Council in October. This would follow the planned September Chamber forum and review by relevant commissions (the Budget and Finance Commission, the Parks and Recreation Advisory Board, and the Stormwater Utility Commission). Council is expected to discuss the proposals at an October 1 study session, with a possible vote on October 15.

- - -

Other Information:

2025 Town of Oro Valley Taxes and Fees

LOVE Parks and Recreation Fee Proposed Increase

LOVE Stormwater Utility Fee Proposed Increase

LOVE Oro Valley Considers New Local Taxes

LOVE Oro Valley Seeks Input On New Taxes and Fees

- - -

Town Staff Sees Financial Gloom....Council Sees Opportunity

Staff forecast shows budget gap by 2028 – but Council identifies unaccounted for revenue opportunities
At its October 1 study session on proposed fee increases and new taxes, the Oro Valley Town Council spent most of the evening discussing staff’s revised five-year financial forecast. The forecast projected that Town expenses would begin to outpace revenues in fiscal years 2028 or 2029, with reserves falling thereafter. Finance Director David Gephart said the revised forecast reflected recent actions such as the police MOU, the change in reserve policy, and the transfer of the half-cent sales tax from the Community Center Fund. “Despite those changes,” he told the Council, “operating expenditures are still outpacing income.” 

Staff: Drastic cuts in service levels will be needed if new taxes and increased fees are not implemented
Staff said that “drastic measures” or reductions in services could be required if new taxes and increased fees are not implemented. They explained that the forecast already includes identified cost-saving measures and reflects options now under consideration to close the projected revenue gap.

Council notes that this warning is far too harsh
Council members did not dispute the seriousness of the long-term forecast but questioned the tone of staff’s warning. Several said that presenting only a worst-case scenario could create unnecessary concern in the community. Vice Mayor Melanie Barrett said she preferred a more balanced view that also accounts for likely new revenues and economic activity. Councilmember Mary Murphy agreed, saying the Council needed “a realistic picture, not an alarm.” Others emphasized that residents expect transparency and perspective, not projections that appear designed to justify higher taxes.

Because the forecast does not consider future revenue growth scenarios
Under questioning, Gephart acknowledged that the forecast did not include revenues expected from several apartment projects now under construction, such as at the Oro Valley Marketplace, or from new retail and restaurant activity that will accompany them. It also omitted the Town’s efforts to reduce “retail leakage” — purchases by residents in neighboring communities — and initiatives to attract additional tourism and visitor spending. In addition, the forecast did not reflect the potential financial impact of future annexations the Town plans to pursue. Barrett said the omission made the forecast incomplete: “New housing and retail are coming online. Those will generate revenue that isn’t reflected here.” Murphy added that the forecast “needs to tell the whole story, not just the worst case.”

Council urges staff to include growth oppotunities in future forecasts
Several Councilmembers urged staff to expand future financial forecasts to reflect potential new revenues from development, tourism, and retail-retention efforts. They said they want to see what would happen if growth and revenue efforts perform as expected, noting that the conservative model alone doesn’t show residents the opportunities ahead. Including broader “what-if” scenarios, they said, would provide a more realistic picture of the Town’s fiscal future and help residents understand both the challenges and the prospects for continued growth.

Council presses for proof of efficient operations before raising taxes or fees
Several Councilmembers, including Barrett and Murphy, said they could not support recommending new taxes or higher fees until they were confident — and could assure residents — that the Town was operating as efficiently and effectively as possible. “We have to be sure we’ve done everything we can internally before asking residents to pay more,” Murphy said.

Staff believes that they have done that with cost-saving measures were already in place, such as limiting travel, delaying hires, and tightening project reviews. “We’ve been tightening the belt for several years,” Gephart said, pointing to about $3.7 million in savings since FY 2023. He added that public safety costs make up the largest share of the Town’s operating budget and “are not something we can touch” when looking for reductions.

Staff did not provide assumptions used in forecast...makes it impossible for anyone to analyze it

Staff did not present the assumptions that were used to build the five-year forecast. Without knowing these underlying factors — such as projected inflation, staffing levels, revenue growth rates, or economic conditions — it is difficult for the Council to analyze or validate the results. Forecasts are only as reliable as their assumptions, and understanding those inputs is essential to determine whether the model is too conservative or too optimistic. Without that transparency, neither the Council nor the public can fully assess whether the Town’s financial outlook accurately reflects likely future conditions.

Forecast not reviewed by Budget and Finance Commission

The revised five-year forecast was developed internally by Town staff and had not been reviewed by the Budget and Finance Commission before it was presented to the Council. While the Commission had previously discussed the proposed fees and tax options, it did not have an opportunity to vet the updated forecast or the assumptions behind it. Independent review by the Commission would have allowed for additional public transparency and a more thorough evaluation of the forecast’s credibility.

Next steps
Staff will continue to refine the analysis and present additional information when the Council takes up the proposed taxes and fees later this month. Those actions — including possible adoption of new use, telecommunications, and commercial-rental taxes and approval of updated parks-and-recreation and stormwater fees — are scheduled for the Council’s October 15 meeting.

- - -

Oro Valley Council Divided as Two New Taxes Are Rejected

Council rejects two proposed taxes
Last week, the Oro Valley Town Council rejected two proposed new taxes: A commercial rental tax and a telecommunications tax. The measures were voted down by four councilmembers. 

Council members cite lack of demonstrated need and need for more though vetting of spending and spending priorities
The reasoning varied. In general, Councilmembers Barrett, Murphy, Nicolson, and Robb said the Council and Town staff need to demonstrate more clearly that a financial shortfall will occur in 2030 and that new taxes are the only viable solution.  Councilmember Murphy summarized the concerns of those opposed, stating, “To my knowledge, there still hasn’t been an audit regarding operational efficiency since we first started talking about this. … I absolutely believe that our residents and our businesses deserve that before we talk about taxes.”

Business community raised concerns
Opposition was also expressed by the Greater Oro Valley Chamber of Commerce, which represents more than 500 businesses. Chamber President Kristin Sharp said, “It’s already more expensive to do business here, and enacting these taxes would only widen that gap.” In addition, comments from mayoral candidate Mark Napier, read into the record, reflected concerns that the Town may be facing a structural imbalance between revenues and expenditures and that the issue warrants closer examination before new taxes are adopted. 

And Vice Mayor Barrett "set the record straight"

Vice Mayor Barrett responded to criticism from former Council member Joe Hornat, who alleged that Council spending created the Town’s financial challenges. “I do not think that Oro Valley is at a crisis point in any way, shape, or form,” Barrett said, cautioning against characterizing the situation as urgent.  Barrett accurately reflected the facts. The spending Hornat cited was addressed by reducing costs elsewhere, particularly by what she described as excessive golf-related losses incurred during Hornat’s tenure. She noted that this Council paid down the police pension debt inherited from Hornat's Council.  Barrett reminded the group that the most recent tax increase was a half-cent sales tax increase enacted during Hornat’s time on the Council.

No clear path forward
The discussion highlighted a split within the Council on how to proceed. Mayor Winfield has said he believes Town staff are doing a strong job managing costs and operating efficiently,. It appears that he does not believe that an independent comprehensive review of spending and priorities is necessary. Winfield, along with Councilmember Greene, expressed confidence at the meeting that Town staff can work through the situation and framed support for the proposed taxes as a way to address long-term financial obligations proactively.

Strategic planning session may test those differences
Whether those differing views will be addressed in the Council’s tomorrow's council strategic planning session remains an open question. The Town has not published the agenda. We do not know how the agenda was developed or the extent to which it was shaped by Town management. As a result, it remains unclear whether the session will include a broad examination of spending levels and priorities and a critical review of the Town’s long-range financial forecasts. 

- - -

Eight Key Issues That Will Shape Oro Valley in 2026

As Oro Valley enters 2026, a series of unresolved policy questions and major decisions are converging. This article highlights the eight key most likely to drive debate, influence voters, and shape the Town’s direction over the coming year.

Water infrastructure will reach a major milestone
The  NWRRDS project is expected to be completed later in the year, marking a major step in strengthening Oro Valley’s long-term water supply and system reliability. Essentially, it enables the town to bring CAP water directly to Oro Valley. Currently, the town get's CAP water via the Tucson Water System.

The election that will shape future priorities
The 2026 election will influence policy discussions throughout the year, affecting council focus, the timing of decisions, and the broader public dialogue. Some issues thatr are likely to surface as campaign themes and voter concerns includes

• Town finances: Is there a structural financial problem, or are current concerns tied to timing and long-range forecasts? If a problem exists, when does it emerge, and what options are available to address it?
• Growth and housing: How much additional residential growth should Oro Valley plan for, and what mix of housing makes sense? This includes questions about more homes, housing affordability, density, and the pace of development.
• Annexation and the tax base: Should the Town pursue annexation of retail-intensive or commercially valuable areas as a way to strengthen revenues and reduce reliance on residential taxes?
• Infrastructure and service capacity: Can existing roads, water systems, public safety services, parks, and facilities support additional growth without major new costs?
• Taxes and fees: If revenues fall short of future needs, should the Town consider new or adjusted taxes, fees, or other funding mechanisms?
• Long-term planning priorities: How should policies outlined in OV Path Forward be implemented, and which priorities should be addressed first?

Our guess is that more candidates will file for office. Residents will get a wide view of opinions on these and other items.

Possible new taxes and long-term finances remain central
Debate over potential new taxes is likely to continue, alongside close attention to the Town’s overall financial condition, including forecasts, reserves, and future obligations. The council will consider approving the three new taxes under consideration this month.

A possible Amphi school closure with major community impact
The possible closing of Copper Creek Elementary remains unresolved and is expected to be an early issue in 2026. Amphitheater School District officials have indicated they intend to move quickly toward a decision, and current signals suggest the school is likely to close. At the same time, the proposal has raised concerns among parents and nearby residents about neighborhood impacts, student reassignment, and long-term effects on the surrounding community. Whether that concern translates into organized pushback, and how the District responds, could shape the outcome and keep the issue in the public spotlight.

A tourism strategy that will be built

Findings from the destination marketing study are expected to influence how Oro Valley approaches tourism, branding, and related economic development. A draft plan is now in circulation, but several elements are likely to require further refinement before adoption, including how group and business travel is addressed, how the plan’s return on investment is quantified, and how tourism governance and funding would be structured. Town staff has indicated that the draft will be reviewed in a Town Council work session in late January, with possible action to follow in February.

Planning the Town’s trail network
Continued work on the Trails Master Plan will influence future recreation priorities, trail connectivity, and capital investment decisions across Oro Valley. As the plan moves closer to completion, key questions remain about which trail segments should be prioritized, how new connections will balance recreation with neighborhood impacts, and how improvements will be funded and phased. Council direction on these issues will shape how quickly recommendations move from planning to construction and how the trail system fits into broader transportation, conservation, and quality-of-life goals.

Regional transportation decisions with local impact
RTA Next will continue to be a major topic in the next few months, with long-term implications for transportation funding and infrastructure across the region. March, voters are expected to weigh in on extending or modifying the regional transportation program, which would determine how road improvements, transit projects, and maintenance are funded for decades to come. For Oro Valley, the debate will likely focus on whether the proposed projects align with local priorities, how much funding the Town would receive relative to its contribution, and how regional commitments intersect with other pressing capital needs.

A vote on Oro Valley’s future framework
Completion of OV Path Forward will culminate in a voter decision next November. If approved, the updated General Plan would establish the Town’s policy framework for growth, land use, housing, transportation, and infrastructure for the next decade and beyond. In the months leading up to the election, debate is likely to focus on how the plan addresses growth expectations, preservation of community character, and alignment with long-term financial and infrastructure capacity.

What are your thoughts on the big stories of 2026. 

Let us know of our Facebook page.

 - - -

Council Weights New Taxes and Increased Fees As Residents and Businesses Voice Mixed Reactions

Staff outlines proposal to broaden Town revenues
At its October 1 study session, the Oro Valley Town Council heard staff’s proposal to raise additional revenue through a mix of new taxes and fee adjustments. The proposed changes include a use tax, a telecommunications tax, and a commercial rental tax, along with updated stormwater and parks-and-recreation fees. Town of Oro Valley Finance Director David Gephart said the goal is to “maintain service levels” while giving the Town a more stable and diversified financial base.

Gephart says diversification is essential for long-term stability
Gephart told the Council that Oro Valley’s reliance on sales tax revenue makes its finances more vulnerable to downturns in retail spending. “When one sector slows, another can help balance it out,” he said. He explained that adding other revenue streams would reduce that risk and “help smooth the ups and downs” in future budgets. He noted that many Arizona cities already rely on a broader mix of revenues to maintain consistent service levels across economic cycles.

Diversifying revenue sources reduces risk
Gephart also described diversification as a form of risk management, consistent with guidance from the League of Arizona Cities and Towns. The League advises that municipalities dependent on a single tax source — such as retail sales — are more exposed to market fluctuations and changes in consumer behavior. “The League encourages all cities to strengthen financial resilience by broadening their tax base,” Gephart said, adding that the proposed mix of new taxes would bring Oro Valley’s structure more in line with peer communities.

Council weighs timing and public trust issues
In addition to the issues we presented yesterday regarding trust in the Town staff’s future financial projections and the concern that the Town must demonstrate it is operating at the most efficient level, Councilmembers also voiced concern about when to implement new taxes and fees. Several said that timing could be as important as the amounts proposed. 

• The use tax, for example, might make sense for long-term fairness — ensuring that online and out-of-town purchases contribute equally — but some questioned whether residents were ready to accept a new tax of any kind. 
• The telecommunications tax drew similar hesitation, with members noting that most households already face rising costs for digital and streaming services. 
• The commercial rental tax prompted the greatest concern because of its potential to affect local business recovery, especially as retail occupancy continues to rebuild at the Marketplace and elsewhere. 
• Fee increases were viewed somewhat differently. Several Councilmembers said they could support updates to stormwater and parks-and-recreation fees since those directly fund the services they affect, but only after a clear explanation to residents of what improvements those fees would support. 

Overall, the Council’s message was that both the timing and the justification for each proposal must be transparent before any vote occurs.

Residents and business owners express mixed reactions
Four speakers addressed the Council during public comment. Resident Bill Carson said he understood the need for reliable revenue but urged staff to focus first on controlling costs. “We all have to tighten our belts — so should the Town,” he said. Local business owner Sarah Lopez, who operates at Oro Valley Marketplace, cautioned that a commercial rental tax could slow efforts to fill vacant retail spaces. “We’re still trying to bring tenants back,” she said. “Adding another tax won’t help that.”

Support for service-based fees
Others supported adjustments tied directly to Town services. Resident David Hoffman said updating stormwater fees “makes sense because those systems protect every home during monsoon season.” Recreation user Lisa Torres agreed, saying, “If higher fees mean better fields and safer facilities, I think most users would understand that.” Both speakers thanked the Council for discussing the proposals in public before making any decisions.

Next steps
Staff will return to the Council on October 15 with refined estimates and recommendations. The proposed taxes and fee changes would require formal adoption by vote, and residents will have another opportunity to comment before any implementation.

- - -

Bob & Diane Peters Recall SOVOG's Warning

The following is a letter to the editor April 25 The Explorer
************************************************************************************

Wal-Mart choice was no surprise

The recent Vestar announcement that Wal-Mart would be the anchor store for their “upscale” Oro Valley Marketplace might have been surprising news for some residents of Oro Valley, but we’ll bet it wasn’t surprising to Chet Oldakowski. Remember him? Last year, Chet and his citizen’s group SOVOG (Stop Oro Valley Outrageous Giveaways) tried to tell Oro Valley voters that this is what would happen if voters approved the $23 million dollar Vestar sales tax incentive. SOVOG was right!

Meanwhile, Vestar was busy mailing out expensive colorful flyers and DVDs promising “an extraordinary shopping experience” with “unique, standout shops” and “No New Taxes!” if the incentive was approved by voters. No sooner did the referendum pass when Oro Valley residents were hit with a 2-percent utility tax and now the Town Council is discussing instituting a property tax as well! But didn’t Vestar’s flyers promise no new taxes? SOVOG was right again!

As reported in the EXPLORER last week (Oro Valley may stop using incentives to lure new retail businesses) several town council members are now questioning the wisdom of the Vestar incentive. Apparently, even the Town Council has now figured out that, dare we say it -— SOVOG was right!

In the March 2006 election, 42 percent of the voters were in opposition to the Vestar giveaway. But we can guarantee that that percentage has grown since the announcement of the Wal-Mart, the utility tax, and the impending property tax. It was a classic bait-and-switch sales pitch. “Upscale” turned into Wal-Mart. “No new taxes” turned into new taxes. Councilman Terry Parish, whose name and endorsements appeared on many of the Vestar flyers, asserted that this incentive would be a “home run for Oro Valley.” We’ve noticed that he has suddenly become very quiet. Could it be that he has finally figured out that his “home run” turned out to be a “foul ball?” Oh what a tangled web we weave, when first we practice to deceive! But, alas, it was never SOVOG who deceived you.

Robert and Diane Peters,
Oro Valley

Town Staff Proposes Increase In Stormwater Utility Fee

This is the second article in our series discussing potential new taxes and fee increases that Oro Valley town staff are recommending to the Town Council. Last week, we discussed three new taxes. Today, we cover a recommended increase in the stormwater utility fee. Tomorrow, we will discuss proposed increases in Parks and Recreation fees.

- - -

Oro Valley staff proposes a stormwater fee increase as part of a package of revenue seeking options
The Town of Oro Valley is considering an increase to its monthly stormwater utility fee beginning in fiscal year 2025–26. This fee is added into the town monthly water bill.  

This increase is part of a package of proposed new taxes and recreational facility user increases that staff presented two weeks ago in a study session to the Oro Valley Town Council.

First rate increase since the utility was created in 2001

According to town staff, the stormwater utility fee, first implemented in 2001 when the utility was created, has remained unchanged. Now, Town staff and the town's Stormwater Utility Commission are recommending a $2.00 per month increase for each Equivalent Residential Unit (ERU)—a billing unit that represents the amount of stormwater runoff generated by a typical single-family home. An ERU is also used to calculate charges for commercial properties based on their impervious surface area. The new proposal would raise the base rate from $4.50 to $6.50 per ERU for both residential and commercial properties. This marks the first major change to the stormwater fee since its creation and is intended to support both ongoing operations and a growing list of capital improvement projects. 

Current fee cannot fund new projects
Staff stated that the reason for the proposed increase is that the current rate only covers day-to-day operations and routine maintenance. The current fee level does not generate enough revenue to fund capital improvement projects. For example, the Calle Concordia channel improvement project and the La Cholla wash crossing at Lambert Lane are both on hold due to insufficient stormwater funds. There are other examples of projects proposed by not done around town [See panel right]. 

New rates will affect both residents and businesses?

If approved, developed residential properties would see their monthly stormwater feed charge go from $4.50 to $6.50, or an increase of $24 per year per household. Commercial properties, which are billed based on the amount of impervious surface area, would see a similar per-ERU increase. The change is projected to generate approximately $2.2 million in stormwater revenue in FY 2025–26, a substantial increase from current collections of $1.5 million. Staff say this will allow the utility to cover routine costs, meet reserve requirements, and fund some capital improvements without needing to dip into emergency reserves. 

What did council members have to say?
Speaking at the study session, several council members acknowledged the need to maintain Oro Valley’s infrastructure and prepare for future challenges. However, concerns were raised about the timing and size of the increase, especially given recent or proposed increases in other fees and taxes. One Councilmember stated that “We need to be sure residents understand why this increase is needed and how the money will be used.” Other members stressed the importance of annual reviews to avoid large, sudden jumps in the future. This is the rate increase model that is used by the Water Utility.

Resident question: Is this increase simply the result of poor town planning? 
One resident wrote us observing tha  “Despite our Town Manager updating our 10 Year Capital Improvement Plan in every budget, it is clear to me that there are long needed stormwater projects which have never been adequately socialized with Council, nor planned nor funded. Thus the Town gets the false bliss of thinking we have more money for discretionary spending than we actually do.” This comment highlights the concern that a lack of clear planning and discussion around stormwater needs in the past has lead to an false picture of the Town’s financial flexibility, further emphasizing the importance of addressing overdue infrastructure projects.

Community engagement is underway—get involved
As with other proposed changes, the stormwater fee increase is still under review, and the Town is holding a community engagement process to gather input before any decisions are made. Residents and business owners are encouraged to participate and share their views at upcoming meetings, as these proposals could directly affect them. The council wants to hear from the public before moving forward. So now is the time to get involved if you have an opinion on these potential changes. Here's how. 

- - -

About the Stormwater Utility
Oro Valley’s Stormwater Utility was established in July 2001 as an enterprise fund. This means that it operates independently from the Town’s general fund and is supported entirely by user fees. The utility was created to comply with federal and state stormwater regulations, including water quality and floodplain management standards, and to ensure the Town could fund the planning, construction, maintenance, and monitoring of local stormwater infrastructure. By keeping the utility self-supporting, Oro Valley is able to provide dedicated resources for critical drainage and flood control projects, without relying on general tax revenues.

- - -

Town Considering Increase in Parks and Recreation Fees

This is the final article in our series discussing potential new taxes and fee increases that Oro Valley town staff are recommending to the Town Council. Last week, we discussed three new taxes. Yesterday, we covered a recommended increase in the stormwater utility fee. Today, we discuss proposed increases in Parks and Recreation fees. 

Parks and Recreation fee increases proposed for 2026
Oro Valley is considering a wide range of increases to its Parks and Recreation fees for fiscal year 2025–26. These proposed fee hikes are part of a broader package of increases that town staff is recommending for several town services and new taxes as discussed with the town council two weeks ago. 

The Parks and Recreation fee proposal covers membership fees, rental rates, and facility charges for residents and non-residents alike. Many of these fees have not been adjusted in over a decade, even as the cost of providing recreational services has gone up. The new rates are designed to better align with actual operating costs and to bring Oro Valley’s fees in line with those of similar communities.

What increases are being proposed?
Under the proposal, membership fees for facilities like the Community and Recreation Center (CRC), Oro Valley Aquatic Center (OVAC), and Archery Range would see increases of $5 to $30 per year, depending on the type of membership. For example, an adult CRC Classic Membership would rise from $40 to $45 per month, while a CRC Premium Family Membership would increase from $100 to $130 per month. Drop-in and family rates are also set to rise. Facility rental fees for fields, parks, ramadas, and lap lanes will also go up. New event rates are being introduced for places like Naranja Park, with hourly rates of $425 and full-day rates of $2,000 for residents and higher rates for non-residents. The proposal also raises rates for pickleball courts, special events, and after-hours rentals.

Why are fee increases being considered now?
Town staff explained that most of these fees have not kept up with inflation or the true cost of maintenance, staffing, and facility upgrades. Many membership and rental rates have remained unchanged since 2013 or even earlier. The increase is intended to support continued investment in Oro Valley’s recreation system, ensuring that facilities remain safe, high-quality, and accessible. By updating the fee schedule, staff hope to keep programs sustainable without relying entirely on tax dollars to subsidize operations.

What does the council think?
During the discussion, council members generally agreed on the importance of keeping the parks system financially healthy, but some raised concerns about the impact of higher costs on families, seniors, and those who use the facilities most often. One council member noted, “We want to keep our parks and recreation programs accessible to all residents, even as we work to cover costs.” Council members asked staff to clearly communicate why the increases are needed and to monitor community feedback as new rates are rolled out.

Public input is encouraged—get involved
The fee increase proposal is still under review and will go through a public engagement process before any changes take effect. Residents and users of Parks and Recreation facilities are encouraged to review the proposed rates and share their thoughts at upcoming meetings. The council is especially interested in hearing how the changes might affect residents’ ability to participate in programs. If you have an opinion or concern, now is the time to get involved and make your voice heard. Here's how.

- - -

Bits and Pieces

Running For Office? Your candidate packet awaits 

Oro Valley residents thinking about running for mayor or Town Council in 2026 can now pick up a Candidate Handbook from the Town Clerk’s Office at Town Hall, 11000 N. La Cañada Drive. Appointments can be made by emailing Mike Standish at mstandish@orovalleyaz.gov or calling 520-229-4700. Three council seats and the mayor’s seat are on the ballot. Candidates must be at least 18 years old, qualified to vote, and have lived in Oro Valley for at least one year before the election. Nomination papers can be filed March 9 – April 6, 2026, with between 525 and 1,050 signatures required. The Primary Election is August 4, 2026, and newly elected officials are expected to be sworn in shortly after the General Election on November 3, 2026. (Source: Town of Oro Valley Media Release)

Council to seek public input on proposed new taxes

By a 4–3 vote, the Oro Valley Town Council agreed Wednesday night to post notice of intent to adopt three taxes: A phased-in Commercial Rental Tax; a Telecommunications Tax; and a Use Tax. This step begins a state-required 60-day public notice and comment period, ending with a potential Council vote on January 14, 2026 to approve or reject any of the taxes. If enacted as proposed, Oro Valley’s 0% commercial rental tax would phase up to 2.5% over three years, the telecommunications tax would increase from 0% to 2.5%, and a new 2.5% use tax would be added to align with neighboring jurisdictions like Tucson and Marana. Councilmembers Barrett, Murphy, and Nicholson opposed moving forward, citing concerns over timing, business impacts, and the need for more cost-saving reviews of town operations. Staff will post a public notice of these proposed taxes on the town website on November 15. The council will make a decision on each of the three taxes at it's January 14 meeting. 

Where there is a will, there is a way

At Wednesday’s Council meeting, several residents expressed concern about the new no parking signs installed along Calle Buena Vista and parts of Calle Concordia. She said her household was not notified about the change and has seen no parking issues near their home in the past four and a half years. While she supports signage near OVCN to address overflow parking, she believes the signs further south are unnecessary, unsightly, and out of character with the neighborhood. Despite all the signage, which she described as an eyesore, we noted that church attendees were still parking on Calle Buena Vista this past Sunday [see panel right]. 

As written: New Use Tax would legally apply to individuals as well as businesses

If adopted, residents have been told by town staff that Oro Valley’s proposed use tax would apply mainly to businesses and not to residents. Businesses would be required to report out-of-state purchases where no local sales tax was paid. These are captured on regular tax filings submitted through the Arizona Department of Revenue, which may also conduct audits to ensure compliance. Town staff has repeatedly stated that the use tax would not be enforced on individual residents, and there are no plans to audit personal purchases. However, as technology advances, future governments may find it easier to track and enforce such taxes more broadly; though doing so would likely raise questions about privacy and require higher-level policy changes.

Film producer urges creation of Oro Valley film commission

Hollywood film producer Mark Headley spoke during Call to Audience segment of Wednesday's council meeting. He talked about the economic benefits of attracting movie production to the town. Drawing on his years of experience in the industry and Arizona’s past success as a filming location, he recommended the creation of a local film commission. Headley said such a commission could be inexpensive to set up and would complement efforts by the Arizona Film Office. He added that film productions typically leave about one-third of their budgets in the communities where they shoot.  Locally, both the Tucson and Marana film commissions. Film Tucson reported last year that filmmaking in the Tucson region generates between $9 million and $12 million annually in economic impact (hotels, restaurants, crews).

Council approves funds for police headquarters purchase and repairs

Wednesday, the Oro Valley Town Council unanimously approved reallocating $5.45 million from the Capital Fund contingency to cover the purchase and immediate repairs of the new police administration facility at 13101 N. Oracle Road. The purchase, completed for about $3.8 million, will be followed by an estimated $1.65 million in improvements, including HVAC replacement, roofing, stucco and parapet repair, and termite treatment. Vice Mayor Barrett noted she would have preferred some of the funding to be addressed during the next budget cycle but acknowledged the allocation was necessary. The motion passed 7–0, ensuring the building can be secured and preparations begun for future police operations.

- - -

Bits and Pieces

BFC review of 2026 Town Manager’s Budget checks a box for town manager, but adds little value to the budget process
Oro Valley’s Budget and Finance Commission (BFC), established in 2019, has not consistently participated in the review of the Town Manager’s Recommended Budget (TMRB). While it was not involved in last year’s FY 2025 budget process, it has occasionally received presentations in prior years without playing a formal advisory role. This year was much the same as that, as staff presented the TMRB to the Commission on May 20.

The BFC did not make a substantive contribution to the development of the TMRB at the meeting. This is because the budget had already been developed and finalized for presentation by the time the BFC reviewed it. The Commission’s role was limited to reviewing and asking clarifying questions. While their discussion helped reinforce certain priorities, like fiscal sustainability and transparency, their comments led to no changes in the budget. Thus, their involvement seemed more like checking a box in the process of completing the TMRB, rather than seeking meaningful input during its development.

Town exploring new taxes to fund future capital needs
At the May 20 meeting of the Budget and Finance Commission, Town Manager Jeff Wilkins introduced a discussion about three potential new revenue sources that are not currently part of the Town Manager’s Recommended Budget. These include a use tax, a telecommunications tax, and a commercial rental tax—all of which are common in nearby municipalities like Tucson, Marana, and Sahuarita but are not currently levied in Oro Valley. Wilkins described these taxes as a way to diversify the town’s revenue base, enhance financial stability, and create a dedicated funding stream for capital needs such as roads and public safety infrastructure.

Although these proposed taxes are not included in the fiscal year 2025–26 town manager recommended budget, Wilkins used the budget presentation to make the case for exploring them. He emphasized that the town’s five-year forecast shows a capital funding shortfall by year five, and that relying solely on existing revenue sources may not be sustainable. According to Wilkins, the proposed taxes could generate between $900,000 and $1.8 million annually, and Wilkins suggested dedicating all proceeds to capital—possibly even restricting it further to public safety. Commissioners responded with questions about operational costs associated with capital projects and whether future councils would be overly constrained by strict earmarking of these new revenues. 

Budget and finance commission recommends approval of $2.84 million contribution to fully fund PSPRS for FY 2026
At its May 20 meeting, the Oro Valley Budget and Finance Commission voted unanimously to recommend Council approval of the FY 2026 PSPRS pension funding policy. The policy includes a total contribution of $2.84 million to the police retirement plan—$738,817 as required by actuarial valuation and an additional $2.1 million in excess of that requirement. This extra payment is intended to eliminate the plan’s remaining unfunded liability and bring the plan to 100% funded status by June 30, 2026. Commission members supported the action after confirming the plan was financially feasible and aligned with the Council’s long-standing goal to fully fund the police pension plan.

New signs, tours, and research projects featured in OVHS May update
The Oro Valley Historical Society’s (OVHS) May newsletter highlights several new initiatives. Eight interpretive signs for Steam Pump Ranch are now in production and expected to be installed by early June, offering year-round self-guided tours.  The Society also launched a redesigned website in April and is seeking volunteers to help with content and outreach. Additional efforts include digitizing historical audiovisual materials, creating an educational display about George Pusch, and continuing research on the families who shaped Oro Valley’s early history.

Disc golf returns with summer vibes and mountain views
Oro Valley’s Pusch Ridge Disc Golf Course is reopening for summer play starting  this Saturday, Nestled at the base of the Santa Catalina Mountains, the 18-hole course offers daily play from 7 a.m. to 7 p.m. through September 21. New this year: weekend golf carts, short tees for novice players, and PDGA-sanctioned league play every Friday at 4:30 p.m. Tee times are required on weekends (7–11 a.m.) via PlayOV.com, while weekday play is first-come, first-served. At $10 per round, it’s a fun, affordable way to enjoy the outdoors—and the scenery can’t be beat. (Source: Town of Oro Valley Press release)
- - -

Oro Valley Town Council To Explore Revenue Options To Fund "Special Project"

The Oro Valley Town Council will consider revenue options. At the March 15 council meeting, Council unanimously approved a 60 day public notice for a future discussion of revenue options.

The revenue options that will be considered include a change in the sales tax and two new taxes: a commercial property rental tax and a residential property rental tax.

http://www.fashionable.pics

The 60 day notice period gives residents and other interested parties notice to speak on these taxes if they wish to do so.

Council Member Mary Snider supported the motion because there is a specific project that the town is considering and a discussion of revenue options is essential to that project.  This project requires funds from a new revenue source. 

Snider did not specify the project.  Perhaps it is the community center or new ball fields that council members have mentioned. Perhaps it is something entirely different. We shall see.

Some revenue sources require voter approval.  For example, voters must approve a property tax, electric or gas utility franchise fees, or a residential rental tax.

Changes in existing sales taxes do not voter approve. These sales taxes include a utility tax, construction taxes, bed tax,  general retail tax and a commercial property rental tax.

"Sales taxes is something people watch,," cautions Oro Valley resident Bill Adler. "Among other things, when moving. People who can afford to live wherever they want aren't going to be affected. Most people may shop at Foothills Mall and the Wall Mart there if the sales tax is lower. If the construction sales tax is included, companies could look for other sites in other communities, so there is risk with any kind of tax increase. "
---