The Oro Valley town council unanimously passed next fiscal year’s $128 million budget, which will begin next month.
The council made some changes to the original budget plan proposed by Interim Town Manager Danny Sharpe on April 19. The budget was initially set at $123.2 million, which was a slight decrease from the 2016/17 budget, but the final budget reflects an increase of just over $5 million from the current year. Most of the increase in budget capacity is related to potential bond funds for the construction at Naranja Park if the public approves the bond question Nov. 7. The additionally increase is a roughly $250,000 funding roll-over for an energy-efficiency project at the community center. Other changes within the document since its introduction include a shift of $55,000 within the capital improvement program from rehabilitation for the Proctor Leiber House at Steam Pump Ranch to address potential improvements at the Pusch House on the same property. Within the general fund, the town will spend another $16,000 budget for repairing structural damages at the Pusch House, though other capital projects related to the ranch have shifted back several years, to take place beginning in 2022.
Additionally, the document reflects shifting in the La Cañada and Moore roads intersection improvement project, as well as the addition of funding La Cholla Boulevard widening through the Regional Transportation Authority.
The passage of the finalized budget came shortly after the town was shown the town’s five-year financial forecast by finance director Stacey Lemos and included the approval of the town’s 15-year capital improvement plan.
Lemos said the town’s five-year forecast future reflects “continued economic growth” locally and statewide, as well as in local residential and commercial sectors. When taking that growth into account, Lemos said the town should expect moderate but steady increases in local sales taxes and state-shared revenues, and that the town’s general fund will remain “steady and stable” over the five-year horizon. Specifically, local sales tax revenues are expected to grow between 1 and 6 percent, state-shared revenues 1 to 5 percent and charges for services between 1 and 4 percent. Lemos said the figures also include an assumption of steady residential activity.
The town’s five-year forecast does not factor in revenue growth from any annexations, the proposed Naranja Park bond or the hiring of any additional staff, though general fund assumptions include continuing the town’s commitment to “fair” employee compensation increases averaging 3.5 percent every year, in addition to step increases for police officers.
The forecast also left out the town’s community and recreation center and associated fund, as the operation of that facility is currently the subject of a feasibility study being conducted by the WLB Group. The study has a June 16 deadline, and town staff indicated they expected to receive the results in the weeks to follow.
In terms of future planning, Lemos said the town will need to keep an eye on its contribution from the general fund to the highway fund, which could reach more than $1.5 million by 2021. Lemos said that burden “will certainly” impact capital improvement funding in future years, though it could be lessened if Pima County passes its proposed property tax increase later this month. The five-year forecast also includes public safety pension contributions of around 35 percent, and an 8 percent health insurance premium increases annually.
“It is important to remember, however, that with the job growth within our region that will likely continue over this timeframe, it is possible that we could see sustained residential growth and development,” Lemos added. “Assuming we have developable land over that time frame.”