As Marana finishes the third quarter of the current fiscal year, revenues continue to exceed expenditures, with few exceptions.
In the airport fund, expenses continue to exceed revenues; although the gap is shrinking. Town Manager Jamsheed Mehta said it’s rare for a general aviation airport, rather than commercial, to generate enough revenue to cover its expenses. Mehta added that the airport is estimated at bringing $18 million annually to the region in the form of jobs, local spending from visitors and money spent on luxury items such as high-end hotels and timeshare jets.
The airport is “generating wealth for the entire region,” Mehta said. “Don’t count it as a debt. Count it as an investment.”
Most of the revenue in the airport fund comes from the lease agreement with Pima Aviation, Inc., which the town just renegotiated to their benefit. Pima Aviation, Inc. holds several leases for different sections of the airport, two of which went back to when the Pima County owned the airport. The lease expired in 2016 but was extended in order to continue negotiations on a new lease, with a 25-year term.
Mehta said the amount the town charges for one of the leases increased almost tenfold, based on price per square footage. Still, large portions of the airport remain unrented. Mehta said if the market were there, the town could lease to more applicants.
The town has made many improvements to the airport, including upgrading the pavement to both runways, updating lighting and putting in security gates and cameras. There’s also an amendment in the lease that the rent will continue to increase in proportion to more improvements.
Mehta said in two weeks the council will vote on a proposal to accept a $5.5 million grant to rehabilitate the airport’s pavement, with a 4.5 percent match from the town.
The town budgeted about $300,000 from the general fund to cover the airport’s gap between revenue and expenditure. And for next fiscal year, Mehta said it should be closer to $200,000.
Marana’s general fund is within 3 percent of the projected revenue through the third quarter, with the greatest outlier being licenses, fees and permits, which is about $671,000 above projection, primarily due to an abundance of home permits.
Marana issued permits for 79 single-family residential homes in May, the highest number for that month since the Great Recession. In the first five months of 2018, the town issued 344 residential-home permits, coming close to the 50 percent mark for the entire calendar year. For the fiscal year, the town projected issuing 625 permits, but it looks like that mark will be exceeded by 50 to 100 permits, according to the town manager.
Most town revenues were within or above town projections, with the exception of the Highway User Revenue Fund, which came in about $160,000 below budget. HURF was a half percent below forecast statewide, according to the Arizona Department of Transportation.
The town’s HURF expenditures are about $1.26 million below projections. A $830,000 fourth-quarter road project will bring expenditures closer to projections.
The transportation fund is within projection for revenue, but also falls well below expenditures, due to several large capital projects that will be carried into the next fiscal year: Coachline Boulevard and Tangerine Corridor, as well as Ina Bridge, with a $6.6 million town budget for which the Arizona Department of Transportation has only billed the town for $600,000.
Marana’s new public safety facility has only cost 30 percent of the $16.94 million budgeted this year, due to when bills are settled. The facility should be mostly done by August, and the town will stop collecting the half-cent sales tax that funds it once they’ve reached $18 million, which is estimated for January 2019.
General Fund expenditures overall are below budget by $4.57 million, in part because several key positions had vacancies this fiscal year. Expenses are also below budget for capital projects due to a larger expense in the fourth quarter for the Silverbell Splash Pad, which will continue into next fiscal year.
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