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HomeMy WebLinkAboutPackets - Council Packets (1973)Town Council Meeting Regular and Study Session October 1, 2025 Town Council Meeting Regular and Study Session October 1, 2025 Upcoming meetings Meetings are subject to change. Check the Town website for meeting status. Planning and Zoning Commission October 7 at 6 p.m. Council Chambers Water Utility Commission October 13 at 5 p.m. Hopi Conference Room Stormwater Utility Commission Special Session October 14 at 4 p.m. Hopi Conference Room Town Council Regular Session October 15 at 6 p.m. Council Chambers 4 OV’s Path Forward Informational Booths Saturday, October 11 9 AM – 1 PM Second Saturday at Steam Pump Ranch Wednesday, October 15 4 PM – 6 PM Community Recreation Center Saturday, October 18 5 PM – 8 PM Bark at the Park (Steam Pump Ranch) Wednesday, October 22 4 PM – 6 PM Naranja Park Saturday, October 25 8 AM – 11 AM Rancho Vistoso Fall Event at Sunset Park Town Council Meeting Regular and Study Session October 1, 2025 7 8BEFOREAFTER VTNP Russian Thistle Pull 9 VTNP Russian Thistle Pull Town Council Meeting Regular and Study Session October 1, 2025 Public Hearing: State Law changes regarding permitted construction hours Town Council October 1, 2025 Purpose Town Code Amendments: •Expansion of permitted construction work hours in summer •Construction activities •Concrete activities •Simplify requirements and retain winter hours Zoning Code Amendment •Eliminate redundant standards Emergency legislation already in effect Planning and Zoning Commission recommends approval Background STATE LAW (MAY 1 – OCT. 15TH) Construction Activities 5am – 7pm (Mon – Fri) 7am – 7pm (Sat) Concrete Activities One hour earlier EXISTING CODE Construction Activities 5am – 6pm (more than 500ft to residential) 6am – 6pm (less than 500ft to residential) Concrete Activities 5am – 7pm (April 15th – October 15th) 6am – 6pm (October 16th – April 14th) Proposed amendments New extended hours for “summer months” per state law Retained most restrictive hours for “winter months” Removed “proximity to residential” standard due to new uniform high standard Applies only to activities associated with an issued building permit Extended Construction Work Hours Permit (ECHWP) Eliminates ZC Section 27.C.9 as redundant Summary Town Code Amendments: •Expansion of permitted construction work hours in summer •Construction activities •Concrete activities •Simplify requirements and retain winter hours Zoning Code Amendment •Eliminate redundant standards Emergency legislation already in effect Planning and Zoning Commission recommends approval Town Council Meeting Regular and Study Session October 1, 2025 Study Session: New taxes and fees proposals Town Council October 1, 2025 New Taxes and Revised Fees proposals PHASE 1 STEP 1 – DEVELOPMENT by STAFF April 4th A.Draft Communications Outreach Plan •Explorer article •Print ads •Informational videos •Outreach to B&C, HOA and Community •Vista Newsletter •Parks & Rec Eblast •Social media •Website B.Assemble All Department Proposals •Parks and Recreation Fees •Stormwater Utility Fees •Other Revenue Sources C.Comprehensive Staff Report and PPT Presentation of A + B STEP 2 – STUDY SESSIONS A.Parks and Recreation Advisory Board April 15th B.Budget and Finance Commission May 20th C.Town Council June 18th PHASE 2 STEP 3 – COMMUNITY ENGAGEMENT ZOOM EVENTS A.Parks & Rec July 9th B.Other Revenues July 10th C.Stormwater July 15th STEP 4 – ORO VALLEY BUSINESS FORUM September 11th PHASE 3 STEP 5 – B&C RECOMMENDATIONS A.Stormwater Utility Commission November 2024 B.Parks and Recreation Advisory Board September 9th C.Budget and Finance Commission September 16th STEP 6 – COUNCIL STUDY SESSION October 1st STEP 7 – COUNCIL DECISION October 15th Public Hearing: Discussion and possible action on the following items: A.Issue “Notice of Intent” to raise Stormwater rate B.Increase Parks and Recreation fees C.Adopt proposed taxes STEP 8 – COUNCIL DECISION Public Hearing: Discussion and Possible action to raise Stormwater rate January 2026 Town new taxes and revised fees proposals Parks and Recreation Fees New Taxes Stormwater Utility Fee Community Engagement Boards and Commissions – April thru June 2025 Community Outreach Plan – June 2025 Online Zoom Engagement Meetings – July 2025 OV Business Forum – September 2025 Boards and Commissions recommended proposals – September 2025 Town Council decision – October 2025 Proposed new Taxes and Rates Financial Stability Guiding Principle 1 “Develop a balanced revenue portfolio by diversifying income streams, structuring fees to align with maintenance and capacity needs, and exploring new revenue sources acceptable to the community...” Town Council approved Strategic Plan Items “Benchmark Revenue Sources” Strategic Plan Project “Conduct ongoing monitoring and benchmarking of the Town’s major revenue sources against municipalities in the region to enhance financial resilience, maintain competitiveness, and adapt to evolving economic conditions.” Updated Five-Year Forecast (no additional taxes) FY 24/25 Forecast FY 25/26 Forecast FY 26/27 Forecast FY 27/28 Forecast FY 28/29 Forecast FY 29/30 Forecast GENERAL FUND Revenue 56,675,067 61,204,029 62,411,886 63,289,354 65,954,311 67,125,786 Inflows 56,675,067 61,204,029 62,411,886 63,289,354 65,954,311 67,125,786 Personnel 34,760,097 37,473,980 38,552,079 39,750,885 40,991,205 42,145,100 O&M 13,030,564 14,951,551 15,637,205 16,132,999 16,804,489 17,352,467 Capital 336,530 211,000 245,190 231,446 239,769 248,162 Transfers Out 9,153,341 11,447,129 10,739,693 7,006,830 6,817,724 8,925,340 Outflows 57,280,532 64,083,660 65,174,167 63,122,160 64,853,188 68,671,069 Beginning Fund Balance 22,081,503 20,855,294 17,975,664 15,213,382 15,380,577 16,481,700 Ending Fund Balance 20,855,294 17,975,664 15,213,382 15,380,577 16,481,700 14,936,417 HIGHWAY FUND Revenue 4,435,067 4,587,867 4,689,906 4,893,029 5,031,945 5,180,448 Transfers In 4,000,000 2,000,000 4,000,000 3,000,000 3,000,000 2,000,000 Inflows 8,435,067 6,587,867 8,689,906 7,893,029 8,031,945 7,180,448 Personnel 1,320,865 1,348,218 1,375,257 1,402,840 1,430,977 1,459,679 O&M 1,251,427 1,317,935 1,298,212 1,335,577 1,374,064 1,413,705 Capital 4,876,765 4,790,000 6,351,800 5,487,500 5,244,315 3,164,000 Outflows 7,449,056 7,456,153 9,025,269 8,225,917 8,049,355 6,037,383 Beginning Fund Balance 606,047 1,592,058 723,771 388,408 55,520 38,109 Ending Fund Balance 1,592,058 723,771 388,408 55,520 38,109 1,181,174 Updated Five-Year Forecast (cont) FY 24/25 Forecast FY 25/26 Forecast FY 26/27 Forecast FY 27/28 Forecast FY 28/29 Forecast FY 29/30 Forecast CAPITAL FUND Revenue 2,909,751 1,538,926 1,612,094 1,561,674 1,537,507 1,525,387 Transfers In 7,139,787 5,000,000 5,410,984 1,622,920 1,715,963 4,925,702 Inflows 10,049,538 6,538,926 7,023,078 3,184,594 3,253,470 6,451,089 O&M 390,108 871 - - - - Capital 5,565,173 6,617,864 8,583,500 4,229,800 3,269,500 4,176,000 Transfers Out 4,000,000 2,234,200 4,117,008 3,120,518 3,124,134 2,127,858 Outflows 9,955,281 8,852,935 12,700,508 7,350,318 6,393,634 6,303,858 Beginning Fund Balance 16,677,730 16,771,987 14,457,978 8,780,548 4,614,823 1,474,660 Ending Fund Balance 16,771,987 14,457,978 8,780,548 4,614,823 1,474,660 1,621,890 COMMUNITY CENTER FUND Revenue 12,109,517 7,219,293 7,415,945 7,657,091 7,904,189 8,130,889 Transfers In - 1,200,000 1,800,000 2,000,000 2,000,000 900,000 Inflows 12,109,517 8,419,293 9,215,945 9,657,091 9,904,189 9,030,889 Personnel 1,324,613 1,303,239 1,341,245 1,380,369 1,420,645 1,462,106 O&M 6,821,594 7,184,962 7,119,338 7,246,581 7,378,250 7,512,917 Capital 1,136,453 2,443,700 365,000 965,000 925,000 230,000 Transfers Out 1,717,149 172,968 172,635 172,236 172,760 172,207 Outflows 10,999,810 11,104,869 8,998,218 9,764,186 9,896,655 9,377,230 Beginning Fund Balance 1,815,118 2,924,825 239,248 456,975 349,880 357,415 Ending Fund Balance 2,924,825 239,248 456,975 349,880 357,415 11,073 Five-Year Forecast Ending Fund Balances Belt-tightening Measures/Impact Did not backfill two project manager positions in FY26 Did not hire any additional f/t staff for FY25. Implemented more stringent new personnel process in FY24. Implemented new travel/training Administrative Directive in FY25 requiring more justification of requests and limiting out-of-state travel. Required no department O&M increases from prior year for FY26 budget. Townwide O&M decreased $328K for FY25 from FY24 Implemented revised, more stringent CIP request process in FY24 and deferred a number of projects. Belt-tightening Measures/Impact (cont) Actual results of belt tightening measures are illustrated on the chart below. Approximately $3.7M in savings through reduced spending has been achieved since FY23. What kinds of taxes and fees do OV RESIDENTS pay? REQUISITE TAXES: 4% Utility tax on gas, electric and water EXAMPLE: For a small business account with a $150/month utility bill (gas & electric), pays $6 per month. Water utility tax adds about $2/month. Fees are used to support a wide range of Town services and departments, including Police, Parks and Recreation, Public Works, and General Government departments, as well as provide funding for capital projects and debt service payments on Town-issued bonds. USER FEES: Water and Stormwater EXAMPLE: Average small business account uses 7,000 gallons of water per month and pays $50 per month. Each business contributes to operate the stormwater system and generally pays $4.50 per month. User fees are used solely for water and stormwater operations and capital construction projects. OV SALES TAX: 2.5% EXAMPLE: $100 purchase of taxable items in OV (groceries are exempt), contributes $2.50. Sales taxes are used to support a wide range of Town services and departments, including Public Safety, Parks and Recreation, Public Works, and general government departments, as well as provide funding for capital projects and debt service payments on Town-issued bonds. PSST! What about property taxes? Good news: The Town of Oro Valley does NOT levy a property tax! The Issue – Stagnant Revenues, Rising Costs The General Fund is the backbone of Town services provided to businesses and residents, funding essential services. While total General Fund revenues have increased 10% since 2021, costs of Police services have increased 23%, absorbing 80% of General Fund revenue growth. Additionally, road maintenance costs have increased a staggering 107% since 2021, requiring the General Fund to help augment the Road Fund. In short – the need is being driven by increasing Public Safety and Road Maintenance costs. History of Pavement Preservation Costs Sales Taxes The Town is funded through a variety of revenue sources. However, Sales Taxes is the primary operating revenue source of the Town comprising over 45% of total General Fund revenues. Over the past three years, Sales Tax growth has been flat. The Town loses about $1.18 billion in taxable transactions to retail “leakage”. Stagnant Revenues $20 $22 $24 $26 $28 $30 $32 Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul '22 Aug '22 Sep '22 Oct '22 Nov '22 Dec '22 Jan '23 Feb '23 Mar '23 Apr '23 May '23 Jun '23Jul '23 Aug '23 Sep '23 Oct '23 Nov '23 Dec '23 Jan '24 Feb '24 Mar '24 Apr '24 May '24 Jun '24Jul '24 Aug '24 Sep '24 Oct '24 Nov '24 Dec '24 Jan '25 Feb '25 Mar '25 Apr '25 May '25 Jun '25Local Sales Tax 12 Month Rolling in Millions FY 21/22 FY 22/23 FY 23/24 FY 20/21 FY 24/25 YTD Opportunities for increased revenue MARANA SAHUARITA TUCSON ORO VALLEY PROPOSED Use Tax (when no sales tax currently collected) 2.5%2%2.6%2.5% Commercial Rental Tax 2.5%2%2.6%2.5% Telecommunications Tax 4%2%2.6%2.5% Taxes and Fees currently levied by neighboring municipalities, not levied by Oro Valley These new taxes would mostly impact OV BUSINESSES USE TAX: 2.5% •What is it? A tax on goods purchased where no sales tax is currently collected •Who pays it? Individuals and businesses would pay it when making purchases outside of Oro Valley, if no sales tax was collected at the time of purchase. •Purpose/how it’s used: Proposed to be restricted towards capital needs COMMERCIAL RENTAL TAX: 2.5% •What is it? A tax on the rental, leasing, and licensing for use of real property for commercial purposes •Who pays it? Landlords of commercial office leases and storage facilities •Purpose/how it’s used: Proposed to be restricted towards capital needs TELECOMMUNICATIONS TAX: 2.5% •What is it? A tax on businesses providing telecommunication services in the Town •Who pays it? Wireless communication service providers. •Purpose/how it’s used: Proposed to be restricted towards capital needs Examples of Impacts – Use Tax Use Tax is primarily paid by businesses who purchase capital or inventory items outside of the State of Arizona. $10,000/mo. In purchases outside the State of Arizona would cost an additional $250. Examples of Impacts – Commercial Rental Tax A $100/mo. Rent would cost an additional $2.50. A $1,000/mo. Rent would cost an additional $25.00. Examples of Impacts – Telecommunications Tax A $50/mo. Cell phone bill = $1.25 A $100/mo. Cell phone bill = $2.50 A $250/mo. Cell phone bill = $6.25 Benefits to Businesses and Residents Keeps Town competitive with the highest level of Public Safety response and Road quality in Southern Arizona Provides increased ability to withstand shocks and adverse economic events by diversifying Town revenues Provides funding for necessary capital projects ie. Police facility, police vehicles, roads Further insulates Town from adverse State legislative actions Facilitates more pay-as-you-go for future capital needs, reducing reliance on future debt issuances Assigned Use All three new tax categories, if adopted by Town Council, are proposed to be utilized for Public Safety Capital needs. The Town is reliant on operational surpluses to fund capital projects. Summary Increases in road maintenance and police costs have caused pressure to the Town General Fund. While the Town has performed operational cost controls and “belt tightening” these past two budget cycles, expenditure cuts alone are not sufficient to remedy the issue without impacting current service levels. Additional revenue is necessary. What is being proposed has already been implemented by surrounding Southern Arizona communities. Strategic Plan Goal 7.1 for last fiscal year. Strategic Plan Focus Area 7 – Financial Stability – “Benchmark Revenue Sources” for current fiscal year. Parks and Recreation proposed Fee Increases Why revise Parks and Recreation fees Current fees inadequate to address needed Parks and Recreation improvements and sustain current service levels Increases cost recovery Fee increases will be utilized for future parks improvements (Capital Improvement Projects) Most fees established 10+ years ago and have not been updated Areas of Proposed Increases Memberships Community & Recreation Center (CRC) •Classic Memberships •Premium Memberships Oro Valley Aquatic Center (OVAC) Archery Range Rentals Fields Archery Range Ramadas Lap Lanes (OVAC & CRC) Steam Pump Ranch Park Rates Pickleball Courts Parks and Recreation fee proposal summary Nominal increases for most categories Proposed fee structure continues to provide an outstanding value for residents Larger increases for non-residents Most fees established 10+ years ago and have not been updated User groups have expressed support regarding the proposed fees El Conquistador Tennis Pusch Ridge Archers OV Community & Recreation Center Advisory Group OV Sports Alliance members OV swim team organizations Fee increases will be utilized for future parks improvements (Capital Improvement Projects) Stormwater Utility proposed Fee Increase Residents $4.50 per month Commercial $4.50 per Equivalent Resident Unit (ERU) Meets regulatory & asset management requirements Allows for program design and development In-house infrastructure design and construction documents Grant management & Pima County partnership Current Fee SWC Proposed Fee Residents $6.50 per month Commercial $6.50 per Equivalent Resident Unit (ERU) Community Expectation Complete Infrastructure Projects Design Construction New Program Requirements General Inflation Continue to seek outside funding FEMA Grants & Pima County Partnerships Existing Rate vs. Proposed Rate Rate Increase Drivers & Timeline What is driving the fee increase? Needed infrastructure repairs - Increased material costs Cash balance will fall to 12% without increase after 2027 Utility must maintain an operating cash reserve requirement of 15% The Stormwater Utility Commission unanimously supported a one-time rate increase $2.00 per ERU. 10/15/25 Town Council - Notice of Intent (NOI) to increase Stormwater fee 01/14/25 Town Council - Public Hearing (at least 60-days from NOI) - Town Council considers adoption of Stormwater fee 07/05/25 New rates become effective – align with FY 26/27 Rate Increase Summary However, at the June 18th Study Session, Council requested that this fee be phased in to lessen its impact: from 10% per year to a 25% over 4 years to a per project basis. For consistency of implementation and predictability for the public, staff is requesting the original $2.00 per ERU fee increase, as an escalating three-part, three-year implementation. That would be 67¢ per ERU per years 1&2 and 66¢ third year increase. The impact is a diminishing year over year increase of 15% first year, 13% the second year and 11% the third year. We feel that this meets the spirit of what the SWUC reviewed & approved while meeting Council direction and providing predictability to the public and funding to accomplish some projects. Town Council Meeting Regular and Study Session October 1, 2025 Study Session: State Law changes regarding approval of development and design review applications Town Council October 1, 2025 Purpose Zoning Code Amendments: •Administrative approval of development design review applications •Types of applications •Impacts to other sections of code •Appeals •At-risk grading and drainage submittals •Expedited reviews •CUP for building height increase in Private School (PS) zoning December 31st deadline Presented for discussion only Public Hearing in December Application types Design: Non-discretionary Proposed Administrative approval Master Development Plans Development Plans Preliminary Plats Final Plats Architecture •Commercial •Model Home Public Art Alternative Parking Ratio Sign Criteria Minor Communication Facilities Use: Discretionary Retain Town Council approval General Plan Amendments Rezoning/PAD Amendments Conditional Use Permits Grading Exceptions Signs Master Sign Programs PAD Exemptions Major Communication Facilities Anticipated Code Amendments continued Impacts to other sections of code: •Appeals of Administrative Decisions to Board of Adjustment as established by State Law •Eliminate much of Economic Expansion Zone (EEZ) •Make Design Standards more precise (Strategic Plan) “At -risk” grading and drainage submittals Specifically enable expedited reviews CUP for building height increase in PS zoning Summary Anticipated Zoning Code Amendments: •Administrative approval of development and design review applications •“At -risk” grading and drainage submittals •Specifically enable expedited reviews •CUP for building height increase in Private School (PS) zoning December 31st deadline Discussion only Public hearing in December Town Council Meeting Regular and Study Session October 1, 2025