Brushing the five-hour mark during a regular session last Wednesday, the Oro Valley Town Council approved the tentative form of next year’s budget—and set the spending cap just shy of $143 million.
The council first saw the upcoming fiscal year’s spending plan last month when town manager Mary Jacobs presented her recommended budget on April 18. Since then, council has sat through two budget study sessions, at which time overviews were provided of major departments and the capital improvement plan (which lays out spending on town-improvement projects such as road widening and construction). Council will vote to adopt the final budget on Wednesday, June 6 after a public hearing.
Little changed from the recommended budget to council’s tentative adoption, which is roughly $14 million more than the current year’s budget. Town finance director Stacey Lemos said the majority of the increase is attributed to additional revenue sources and an increase due to year-end fund balances. The latter attributes for $6 million in budget growth.
At the beginning of the month, Oro Valley Mayor Satish Hiremath said that he and the council asked Jacobs to address four major areas of concern when compiling her first budget as town manager: economic development for the community at large, streamlining the development process, developing a plan for the community center inclusive of the golf course and creating better communication with Oro Valley residents
Hiremath said he was “very pleased” to see Jacobs address those topics in her budget.
The town’s general fund will start the year with a roughly $48 million balance—of which nearly $22 million is comprised of sales tax revenue. Next year’s total fund revenues are expected to increase by $2.5 million (7 percent) while sales tax revenues are expected to grow $2.3 million (13 percent). The town’s planned debt service for next year is $7.4 million, or roughly 5 percent of expected expenditures.
Countering talk among some residents that town government is growing at a disproportionate rate, Hiremath said that the growth of the budget is not a sign of growth as much as accounting for revenue increases.
“It’s not an expanse issue,” Hiremath said. “It’s that we’re fiscally sound, and have a lot of revenue.”
As previously reported by Tucson Local Media, the budget continues Oro Valley’s history of providing step and merit increases for its staff, and includes several recommendations for new staff positions: an additional IT systems analyst, a procurement specialist, a public information officer and a deputy director for the parks and recreation department.
The budget includes a recommendation from Jacobs and Lemos for council to pursue a $14 million bond to pay for a variety of projects in the town: Improvements and redevelopment at the community and recreation center and gold courses ($6 million), replacement of old water utility infrastructure ($ 6million) and building the Oro Valley Police Department’s new southern substation ($2 million).
The $6 million project at the community center includes roughly $3.8 million in turf reduction, bunker reconfiguration and irrigation replacement on both golf courses over the next two years, and $2.2 million to reconfigure the community center itself. The reconfiguration would expand the fitness center, relocate The Overlook downstairs as a fast-casual restaurant and redevelop the entrance. Inclusion of an additional $2 million to develop the police substation comes after the town received bids on the project higher than expected. OVPD Police Chief Daniel Sharp said developing the station has been talked about for nearly 20 years—and on the CIP for 17.
Repayment of such bonds would rely on a roughly $800,000 sales tax rebate from the Oro Valley Marketplace the town currently grants the site developer, Vestar. The contract with Vestar will expire soon. Another $650,000 would come from police impact fees for the substation, and Jacobs said new development impact fees can be dedicated to the bond repayment over the next 20 years.