Taxes budget

Families, businesses and governments have faced many challenges over the past year due to the pandemic. Yet the Town of Oro Valley’s recently adopted FY21/22 Budget reflects the Town’s strong financial position as well as optimism and opportunities in the coming year—optimism that we can continue to provide high levels of service to our community and take advantage of opportunities to invest in the Town’s long-term financial stability. With clear priorities from the Town Council, the budget includes resources that will enable the Town to finance $25 million in parks and recreation capital projects, resolve its unfunded police pension liability and continue to provide the high level of services to the community that our residents have come to enjoy.

Unsurprisingly, our country is still dealing with the impacts of COVID-19; however, Arizona is expected to outpace most states in its economic recovery from the pandemic, and according to multiple sources, the Tucson area is among the best-positioned regions to thrive post-pandemic. We are confident Oro Valley and its many businesses will continue to see positive recovery in the coming months. In fact, the Town has successfully navigated challenges posed by COVID-19 thus far, and our financial performance reflects the positive economic activity within the community. New single-family residential permits approached levels not seen for more than 15 years. Retail and remote sales tax collections combined saw double-digit growth in FY 2020/21. In April, the Town Council voted to annex the Westward Look, which will add more than $750,000 in retail, bed and utility taxes to the Town’s revenues

annually.

The Town’s fiscal year started July 1, and this year’s budget is $162 million, which is $56.5 million, or 53% higher than last year’s $105.4 million. While that seems like a big jump, the increase is due primarily to one-time projects and initiatives made possible due to anticipated federal stimulus dollars and bond proceeds. The Town of Oro Valley is expecting to receive over $15 million in federal American Rescue Plan Act (ARPA) funds over two fiscal years, with $5.5 million planned for expenditure this fiscal year.

Another significant part of the budget increase is due to the Town Council’s recent vote to broaden the use of the half-cent sales tax originally dedicated to golf and the Community Center operations, opening its use to all Parks and Recreation functions. The Council also chose to direct a portion of that revenue source toward paying the debt service on $25 million in bond financing for capital projects. What that means is that rather than saving money and building park facilities a little at a time, the community can expect to see major investments in Naranja Park and other priority areas much sooner. Different from secondary property tax bonds which require voter approval, the Town and outside entities ensure there are sufficient resources to pay back these bonds in the future through its annual budget.

Equally as important, the Town Council approved a debt issuance of $17 million in pension obligation bonds to apply toward the Town’s $27.6 million Public Safety Pension Retirement System (PSPRS) unfunded pension liability. Together with a $10 million cash contribution from reserves, this solution will meet the Council’s PSPRS 100% funding goal far earlier than their projected deadline of 2036 while conservatively saving the Town more than $8 million over the next 15 years based on the Town’s strong AA+ bond rating.

The budget remains focused on reflecting the priorities of the Town Council as established in their latest Strategic Leadership Plan. This two-year plan outlines a continued focus on economic vitality, public safety, culture and recreation, good planning, quality infrastructure, effective governance and financial stability. As such, the community can expect to see the same outstanding level of service in areas, such as a well-trained and outfitted Police Department, the best roads in the region, clean and reliable water delivery, quality parks, and exceptional customer service.

While our budget priorities run the entire gamut of Town departments and services, we understand that many Oro Valley residents are particularly interested in what’s on tap for Parks and Recreation projects this fiscal year. To that end, Mayor Joe Winfield will publish an article in next week’s Explorer Newspaper that touches on our new approach to the half-cent sales tax and some of the Parks and Recreation capital improvement projects our community can look forward to in the coming year.

To learn more about the Town of Oro Valley’s FY 21-22 budget, be sure to check out the user-friendly, two-page summary document entitled, “Know Your Town’s Budget” at orovalleyaz.gov.

Mary Jacobs is the Oro Valley Town Manager.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.