You say to-may-to, I say to-mah-to. Oro Valley Town Council says contingency fund, but the mayor and some town staff members are calling it more of a "savings account."
It was a battle of semantics at a special session of the Oro Valley Town Council July 14 as the three hour discussion focused more on defining terms and issues than about making changes to actual spending.
When an attempt to pass the tentative budget and expenditure limitation was met with contention by a majority of council members July 7, Mayor Paul Loomis made a motion to pass the item, but called a special meeting to discuss individual line items within the budget and address concerns from the council.
At the July 14 meeting, changes to the tune of a $175,000 deficit, down from a $32,000 surplus, were agreed on by passing individual motions for items to be added back into, or be taken out of, the balanced budget presented at the last regular meeting.
Before discussion of the night's business could get underway, councilmember Helen Dankwerth made a motion to reconsider the previous meeting's motion setting the tentative budget.
She said she was not disputing the expenditure limitation, but rather using the contingency fund to pay for two capital improvement projects -- a weapons storage unit and expanded records room for the police department and a renovation of the basement area of the Town Hall Administration Building.
Dankwerth has been disputing use of the contingency for planned expenditures throughout the budget setting process. She said the fund is set up for unplanned, unforeseen expenses in the town, and should be used as such.
But at the meeting, Loomis suggested the council look at the contingency differently.
Examining the history, he said setting aside 20 percent of whatever recurring expenses the town has as a contingency has been a town policy for three years. Before, the town set aside 25 percent.
But Loomis said the council at that time asked themselves, "Was that too much to be keeping back?"
Before 1997, the town had no contingency fund policy at all, he said.
Sweet said that in the past, the town used the contingency to balance the budget. Last year, he said $1.3 million was set aside from the fund to balance the budget, but over the course of the year the town actually used between $200,000 and $300,000. He said that is because the town estimates some recurring revenue from sources such as building permit fees. Last year, for example, the town staff estimated 400 single family units would be built. But in actuality, he said, 500 were built and Oro Valley was able to collect more revenue than it expected through sales tax, permits and water impact fees.
That is why, in the past, Sweet said, the council has balanced recurring expenses against recurring revenue and used the contingency for one-time expenditures, "as a savings account, if you will," he said.
Loomis agreed with the idea.
"We've done an awful lot of capital projects in the last five or six years," he said. "That is what that money is for."
Dankwerth called for a way to define the contingency and to determine how the council will use the fund in the future, reasserting her opinion it should not be used to pay for recurring expenses.
Loomis said the town currently had more than $7 million, or 36 percent of the town's recurring expenses set aside in a contingency fund. He said since town policy requires 20 percent be there, or $3.9 million, the rest should be considered "the savings account balance."
Later in the night while debating whether to put spending for the two capital improvement projects back into the regular budget, Councilmember Barry Gillaspie questioned the use of the term "savings account" again, to which Councilmember Terry Parish responded, "it's the politically correct term."
Whether or not the motion passing the tentative budget could, or should, be reconsidered was debated before it was suggested by Sweet the council could put spending for those projects back into the regular budget, instead of spending from the contingency. A motion eventually was made by Dankwerth and passed 4 to 3.
As discussion continued, the council again disputed decisions made in the past by previous councils.
Vice Mayor Paula Abbott moved to remove a project from the budget to build a sound wall in the Verde/Catalina area at a cost savings of $176,000. She said the project should be looked at mid-fiscal year to determine if the town could afford it.
Abbott said the wall was part of a pre-annexation agreement with the residents of the area and was done behind closed doors without the public's input. She said she believed the action was in violation of Arizona open meetings laws and possibly illegal.
"However, people in the area think they are going to get a wall," she said, adding she believed the project should be funded in order for the town to keep its word, "but not at the expense of a balanced budget."
Town Attorney Mark Langlitz interjected to say in making the agreement there was "absolutely no violation of the open meeting law."
Mayor Loomis said making decisions with an almost entirely new council will be different and that town policies will change as town councils change.
"We are seeing a different way of doing business than we did business six month ago," Loomis said. "We have to honor those who came before us and the decisions they have made."
The motion to remove the project from the budget failed unanimously.
Council did add positions back into the budget after they were removed to balance it earlier this month.
A motion to add a courtroom clerk in Magistrate Court passed unanimously and a person should be hired to fill the position by October to help in that department at a cost of $31,000 in this year's budget.
A part-time office assistant in the clerk's office also was approved unanimously with a salary cost of $15,340 and operating and maintenance costs of $2,500.
There were some areas of disagreement when it came to how the town will disseminate information to the public in the future. Hiring a Webmaster was approved 4 to 3 with councilmembers Parish, Conny Culver and Abbott voting against it. The position will cost the town just over $40,000 with salary and operating and maintence expenses. However, reclassifying the current public information officer's position to a community relations director and increasing the salary of that position by $15,000 was removed from the budget by a 5 to 2 vote. Councilmember Gillaspie said it had nothing to do with the performance of the person currently filling the position, Bob Kovitz, but rather with the approach of the town in regard to public relations and getting information out to residents.
"We can't do it in a piecemeal way," he said of giving individual raises without having an overall plan worked out. Culver agreed, also voting to take the reclassification out of the budget "until we can put together a plan that is comprehensive."
While some decisions were reached in regards to the budget, councilmembers still have more to discuss regarding the budget, Culver said.
Sweet pointed out to council early in the evening that the town is currently in the new fiscal year, and there are events that are occurring that "are going to happen without a final budget." He discouraged further delay on approving a final budget after Culver suggested Arizona law does not prescribe a deadline to have the final budget complete.
Culver motioned to adjourn the meeting, "with the understanding that we perhaps are not finished with this" and that any items still in dispute should be placed in an upcoming agenda in the very near future. Several members of the town staff needed to leave in order to attend a professional conference in Phoenix.
Loomis said any further discussion of the budget should be saved for the Aug. 4 meeting, set to adopt the final agenda and hold a public hearing regarding the issue.
"At this point, I think we worked the issue sufficiently hard," he told the council.