A year-long feud between Oro Valley and Pima County over allowable expenses for the new town library was temporarily stayed Jan. 20 when the Pima County Board of Supervisors approved payment to the town of up to $200,000 for the first two quarters of fiscal year 2003-2004.

"We told them we would have to close the library or cut back on hours otherwise," said Oro Valley Community Development Director Brent Sinclair, who oversees the library. "We're thankful…but if we don't reach resolution for the third and fourth quarter or the amounts are cut, we'll have to cut services." Sinclair added that Town Manager Chuck Sweet has directed him to come up with a contingency plan in that event.

Up through June 30, 2003, the town had a contract with the county to provide half of the library's operating expenses, including some items specifically excluded for Tucson branch libraries.

The original intergovernmental agreement between the county, the city of Tucson and Oro Valley - unique in the Tucson-Pima Public Library system - defined operating expenses as "all aspects of the operating budget which includes but may not be limited to personnel, collections (books, subscriptions to newspapers and magazines, multi-media formats, online subscriptions, and so forth), outside professional services, travel and training, memberships, telecommunications and non-capitalized expenditures" and capital expenditures.

The county specifically prohibits for city of Tucson branch libraries (but not the main library or its own unincorporated county branches) reimbursement for landscaping, custodial, building maintenance, rental and capital items.

The Oro Valley Public Library has the special status of being the sole affiliate in the regional TPPL system, which is jointly funded by Pima County and the city of Tucson.

"We wanted to be an affiliate to have our own staff and make local decisions," said Sinclair. All other TPPL libraries are branches.

But almost since the ink dried on the original contract, the county and town have haggled over eligible expenses.

"Throughout the year, we sent invoices to Pima County on a quarterly basis but we were not getting timely payments. We'd get rejections in which they'd disallow certain expenses. It started with small items, like money spent on volunteers and volunteer services," he said.

"Throughout the course of that we said, "OK, we'll agree but none of that was spelled out in the IGA."

The county balked at Oro Valley's invoices for food and entertainment, denying payment of $1,748 for a paper-plate dinner for 120 library volunteers catered by Michelangelo's Ristorante Italiano and coffee service for library employees. It also denied $806 for gift bookmarks for volunteers and $1,742 for six employees to attend an Arizona Library Association conference, noting that branch libraries typically fund training and travel through grants and other alternate revenue sources.

"Office supplies and miscellaneous other operating expenses (are) in excess of 200 percent over budget," wrote county resources department director Kate O'Rielly in a March 12, 2003 letter to Oro Valley Finance Director David Andrews. "The Oro Valley library has spent almost as much in these two categories in five months as the entire TPPL system has spent in six months."

Overall, the county rejected about $5,000 in expenses submitted by Oro Valley in its $1 million library budget for 2002 - 2003, said Sinclair.

Negotiations for a new 2003 - 2004 contract began in May. Several drafts went back and forth between Oro Valley and the county, but neither side could agree.

"We want the (contract) we started with and that's the resolution we passed," Sinclair said. "The one they want is one for the city of Tucson, which excludes a lot of expenditures they already agreed to."

On Oct. 13, the town submitted an invoice to the county for $65,077 for its share of library expenses covering the first quarter of the new fiscal year. That invoice went unpaid; there was still no agreement as to a new contract.

"It's an agreement. At the end of a year, it ends," said Pat Corella, assistant director of TPPL. "The county is trying to get more consistency. Oro Valley feels hurt. Several managers have contacted me about it. Last year, there were a lot of hurt feelings when the county sent auditors to Oro Valley to review the expenditures file and Oro Valley didn't cooperate. This is politics."

Deputy County Administrator Mike Hein said that the impasse reflected a "divergence in philosophy about how an affiliate should be treated. Oro Valley argues that it is different, and that the county shouldn't interfere with its decision making process. But we have some internal constraints," he said. "We have to create a mechanism that we can live with in the future."

In a Nov. 20, 2003 memo to Pima County Dist. 1 Supervisor Ann Day, Hein explained the situation this way: "County staff has struggled with town staff over the requests for reimbursement as provided in the IGA. The differences have arisen as a result of the unique relationship in the governance of the library. Town staff was not expecting the degree of oversight exercised by county staff in their review of the requests for payment. Further, town staff was not familiar with the policies and practices that have long been established in determining eligible expenses for the Library District." He concluded "it would be best to adopt an agreement as similar as possible to the one that exists with the City of Tucson."

In a memo drafted for a Dec. 16 meeting of the Board of Supervisors, the county proposed a contract that would pay $435,212 to Oro Valley in four quarterly payments of $108,803, with a final accounting to take place in September 2004. Specifically, of a total 2003 - 2004 Oro Valley Public Library budget of $962,098 (minus $45,000 in capital expenses), the county disallowed $46,675 in ineligible items. Those included $9,000 in landscaping, $562 in rental storage, $4,283 in travel and training, $600 in plates and vases for special events, $1,580 for coffee and snacks for meetings, $25,200 for custodial services, $2,000 for custodial supplies, $3,000 for volunteer services and $450 in building maintenance costs. The county's half share would have amounted to $23,338.

Oro Valley rejected the draft contract.

In a written response to Pima County Administrator Chuck Huckelberry, Oro Valley Town Manager Sweet labeled the contract "unacceptable" and reminded the county that Oro Valley citizens paid $693,911 in library district taxes in 2003.

"We are requesting that amount be paid to the town in one lump sum payment or the county honor the same agreement made last year that provides a 50 percent reimbursement of all Maintenance and Operation costs," Sweet wrote.

"That would be fine if Oro Valley residents did not use library services outside the town and they would only use the Oro Valley library," Huckelberry answered in a Dec. 19 letter. "The purpose of the district is to fund a regional library system." Further, he added, "As I understand, a big sticking point is paying for half of the landscaping at your branch. For comparison purposes, we pay nothing for landscaping city branches, and the total landscaping budget for the branches in the unincorporated area is $4,473, as compared to your request of $9,000. Perhaps you will reconsider."

The county Board of Supervisors Jan. 20 action extends the original IGA for the first two quarters of 2003 - 2004, but settles nothing after that.

"Our position is that the citizens of Oro Valley should receive our 50 percent without exclusions," said Sinclair. "The hardship for us is that we can't make up for that shortfall without cutting services. The primary issue is that we don't want to change. We want the agreement we started out with."

On Jan. 13, Oro Valley invoiced the county a total of $163,906 for the first two quarters of fiscal year 2003 - 2004.

Sinclair said he expects a check any day now.

"I think we're close," said deputy county administrator Hein. "If we can set aside ego and pride and try to see each other's perspectives I'm sure an agreement can be worked out. We've (now) given them everything they've asked for, which I believe is less than what we offered."

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