HomeMy WebLinkAboutPackets - Budget and Finance Committee (64)
AGENDA
ORO VALLEY
BUDGET AND FINANCE COMMISSION
REGULAR SESSION
MARCH 17, 2026
COUNCIL CHAMBERS
11000 N. LA CAÑADA DRIVE
REGULAR SESSION AT OR AFTER 4:00 PM
CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
CALL TO AUDIENCE - at this time, any member of the public is allowed to address the Commission on any
issue not listed on today’s agenda. Pursuant to the Arizona open meeting law, individual Commission
members may ask Town staff to review the matter, ask that the matter be placed on a future agenda, or
respond to criticism made by speakers. However, the Commission may not discuss or take legal action on
matters raised during "Call to Audience." In order to speak during "Call to Audience", please specify what
you wish to discuss when completing the blue speaker card.
STAFF LIAISON REPORT
REGULAR SESSION AGENDA
1.REVIEW AND APPROVAL OF THE FEBRUARY 17, 2026 REGULAR SESSION MEETING MINUTES
2.PRESENTATION AND POSSIBLE DISCUSSION OF THE TOWN'S FY25/26 FINANCIAL UPDATE
THROUGH DECEMBER 2025 (PLEASE REFERENCE ATTACHMENTS)
3.DISCUSSION AND POSSIBLE RECOMMENDATION OF DRAFT PSPRS PENSION FUNDING POLICY
FOR FISCAL YEAR 2027
4.PRESENTATION AND POSSIBLE DISCUSSION REGARDING THE TOWN'S PRELIMINARY
FIVE-YEAR FINANCIAL FORECAST THROUGH FY2030/2031. (Please reference attachments)
5.PRESENTATION AND DISCUSSION OF BUDGET STABILIZATION PLAN
COUNCIL LIAISON COMMENTS
ADJOURNMENT
POSTED: 3/13/26 at 5:00 PM by sa
When possible, a packet of agenda materials as listed above is available for public inspection at least 24 hours
prior to the Commission meeting in the Town Clerk's Office between the hours of 8:00 a.m. – 5:00 p.m.
The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability
needs any type of accommodation, please notify the Town Clerk’s Office at least five days prior to the Commission
meeting at 229-4700.
INSTRUCTIONS TO SPEAKERS
Members of the public have the right to speak during any posted public hearing. However, those items not
listed as a public hearing are for consideration and action by the Commission during the course of their
business meeting. Members of the public may be allowed to speak on these topics at the discretion of the
Chair.
If you wish to address the Commission on any item(s) on this agenda, please complete a blue speaker card located
on the Agenda table at the back of the room and give it to the Recording Secretary. Please indicate on the
speaker card which item number and topic you wish to speak on, or if you wish to speak during “Call to
Audience,” please specify what you wish to discuss when completing the blue speaker card.
Please step forward to the podium when the Chair announces the item(s) on the agenda which you are interested
in addressing.
1. For the record, please state your name and whether or not you are a Town resident.
2. Speak only on the issue currently being discussed by the Commission. Please organize your speech, you will
only be allowed to address the Commission once regarding the topic being discussed.
3. Please limit your comments to 3 minutes.
4. During “Call to Audience”, you may address the Commission on any issue you wish.
5. Any member of the public speaking must speak in a courteous and respectful manner to those present.
Thank you for your cooperation.
“Notice of Possible Quorum of the Oro Valley Town Council, Boards, Commissions and Committees: In accordance
with Chapter 3, Title 38, Arizona Revised Statutes and Section 2-4-4 of the Oro Valley Town Code, a majority of the
Town Council, Board of Adjustment, Historic Preservation Commission, Parks and Recreation Advisory Board,
Stormwater Utility Commission, and Water Utility Commission may attend the above referenced meeting as a
member of the audience only.”
Budget and Finance Commission 1.
Meeting Date:03/17/2026
Submitted By:Melissa Flores, Legal
SUBJECT:
REVIEW AND APPROVAL OF THE FEBRUARY 17, 2026 REGULAR SESSION MEETING MINUTES
RECOMMENDATION:
Staff recommends approval
EXECUTIVE SUMMARY:
N/A
BACKGROUND OR DETAILED INFORMATION:
N/A
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
I MOVE to approve (approve with changes) the February 17, 2026 regular session meeting minutes
Attachments
Draft Minutes 021726
D R A F T
MINUTES
BUDGET AND FINANCE COMMISSION
REGULAR SESSION
FEBRUARY 17, 2026
COUNCIL CHAMBERS
11000 N. LA CAÑADA DRIVE
REGULAR SESSION AT OR AFTER 4:00 PM
CALL TO ORDER at 4:02 by Chair Karlsberg
ROLL CALL
Present: Dan Karlsberg, Chair
Joyce Garland, Vice Chair
John Moothart, Member
Eloho Okeze, Member
Erin Krapf, Member
Staff Present: Joe Winfield, Mayor
Jeff Wilkins, Town Manager
David Gephart, Chief Financial Officer
Wendy Gomez, Deputy Finance Director
Chris Hutchison, Senior Budget Analyst
PLEDGE OF ALLEGIANCE led by Chair Karlsberg
CALL TO AUDIENCE - No speaker cards were received.
STAFF LIAISON REPORT
Chief Financial Officer, David Gephart, reported the following:
Agenda items that are significant wins over the last five years:
PSPRS, an update will be provided
Golf has been a significant win in it's performance
At the next Town Council Meeting:
Discussion and possible action regarding Town of Oro Valley actions that could possibly attract a
COSTCO or similar retailer
Discussion and possible action regarding initiating a process that can help the Town in looking for
efficiency opportunities
RTA Next Ballot should have been received in the mail and everyone is encouraged to vote.
REGULAR SESSION AGENDA
1.REVIEW AND APPROVAL OF THE JANUARY 20, 2026 REGULAR SESSION MEETING MINUTES
2/17/26 Minutes, Budget and Finance Commission Regular Session 1
Motion by Member John Moothart, seconded by Vice Chair Joyce Garland to approve the January 20,
2026, regular session meeting minutes.
Vote: 5 - 0 Carried
2.PRESENTATION AND DISCUSSION OF PSPRS PENSION FUNDING POLICY
Presentation by David Gephart, Chief Financial Officer. Discussion ensued amongst Staff and
Commissioners.
Commissioner Moothart leaves meeting at 4:43 PM.
3.INTRODUCTION AND POSSIBLE DISCUSSION OF DRAFT RECESSION PLAN
Presentation by David Gephart. Discussion ensued amongst Staff and Commissioners.
4.PRESENTATION AND DISCUSSION OF GOLF FUND FISCAL ANALYSIS
Blue speaker card received from Town Resident Tony D'Angelo for Agenda Item 4. D'Angelo speaks on item
4. Presentation by David Gephart. Discussion ensued amongst staff and commissioners.
COUNCIL LIAISON COMMENTS
Mayor Winfield provided the following comments:
On February 2nd there was a ribbon cutting for the Oro Valley Town Court's remodel, which was a 3.1 million
dollar investment.
Marana and Oro Valley recently formalized a regional bicycling partnership, which is tied to leisure tourism
efforts
There is an Off the Vine wine festival on February 21 at James D. Kriegh Park
Tucson Bicycle Classic will have the final race in Oro Valley on the 22nd.
Please view the Town website for other Town Activities
ADJOURNMENT
Motion by Vice Chair Joyce Garland, seconded by Member Eloho Okeze to adjourn the meeting at 5:51
PM
Vote: 4 - 0 Carried
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the
Town of Oro Valley Budget and Finance Commission of Oro Valley, Arizona held on the 17th day of February,
2026. I further certify that the meeting was duly called and held and that a quorum was present.
Dated this 17th day of February, 2026.
___________________________
Melissa Flores
Legal Secretary
2/17/26 Minutes, Budget and Finance Commission Regular Session 2
Budget and Finance Commission 2.
Meeting Date:03/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
PRESENTATION AND POSSIBLE DISCUSSION OF THE TOWN'S FY25/26 FINANCIAL UPDATE THROUGH
DECEMBER 2025 (PLEASE REFERENCE ATTACHMENTS)
RECOMMENDATION:
N/A
EXECUTIVE SUMMARY:
Please reference attachments for this item.
BACKGROUND OR DETAILED INFORMATION:
N/A
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
N/A
Attachments
Consolidated December 2025 Monthly Financial Report
Town Manager’s Office
TOWN COUNCIL REPORT
DATE: February 24, 2026
TO: Mayor and Council
FROM: Jeff Wilkins, Town Manager
David Gephart, Chief Financial Officer
SUBJECT: December 2025 Financial Update
This financial update is intended to provide an overview and status of revenues and expenditures for the
Town’s selected funds through December 2025 for fiscal year 2025/26. Funds included in this financial
update are the General Fund, Highway Fund, Community Center Fund and Capital Fund. Also included
are the two enterprise funds, Water and Stormwater. Please note that all amounts are preliminary, un-
audited and subject to change. Additionally, figures may not include any adjusting audit entries
required at year-end.
Pages 1-15 are the financial status reports for the funds. Appendix 1 and 2 provide further details on golf
activity and contractor performance. Appendix 3 is the consolidated report of all Town funds. Appendix 4
is the General Fund sales tax collections. Appendix 5 is the General Fund state shared revenues. Appendix
6 is a breakdown of the Town’s outstanding debt service principal and interest payments. Appendix 7 is a
summary of operating investment values and earnings by month. Appendix 8 lists the specific infrastructure
projects that are eligible to receive funding from impact fees.
General Fund
Financial Status Fiscal Year to Date: December 2025
Revenues `
Amount Percent
Local Sales Tax 12,813,938$ 12,630,584$ 32,470,107$ (19,839,523)$ 39% 27,687,694$
State Shared Revenues 10,117,909 9,823,126 19,863,884 (10,040,758) 49% 19,809,058
Licenses & Permits 925,527 1,492,504 2,116,123 (623,619) 71% 2,317,479
Grants 233,797 408,347 466,851 (58,504) 87% 698,219
Intergovernmental 400,602 1,023,786 2,320,362 (1,296,576) 44% 2,320,362
Charges for Service 1,483,576 1,561,000 3,050,223 (1,489,223) 51% 3,095,270
Other Revenue 988,917 425,369 916,480 (491,111) 46% 942,999
Total Revenues 26,964,266$ 27,364,715$ 61,204,030$ (33,839,315)$ 45% 56,871,082$
Uses
Amount Percent
Personnel Services 16,265,360$ 17,121,828$ 37,457,276$ 20,335,448$ 46% 36,515,935$
Operations and Maintenance 7,190,647 7,028,157 15,317,790 8,289,633 46% 15,104,790
Capital Outlay 88,139 84,559 211,000 126,442 40% 211,000
Transfers Out 5,458,073 8,203,829 8,831,579 627,750 93% 8,831,579
Total Uses 29,002,218$ 32,438,373$ 61,817,645$ 29,379,272$ 52% 60,663,304$
Change in Fund Balance
Total Revenues 26,964,266$ 27,364,715$ 61,204,030$ 56,871,082$ 56,871,082$
Total Uses (29,002,218) (32,438,373) (61,817,645) (60,663,304) (60,663,304)
Change in Fund Balance (2,037,952)$ (5,073,657)$ (613,615)$ (3,792,222)$ (3,792,222)$
Beginning Fund Balance 20,702,401$ 20,702,401$
Estimated Ending Fund Balance 15,628,744$ 16,910,179$ 16,910,179$
Note: The estimated ending fund balance exceeds the Town's 25% expenditure reserve policy by a margin of about $4 million.
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
FY 2025/26
Budget
Year End
Estimate
Year End
Estimate
Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
FY 2024/25
Actuals
FY 2025/26
Actuals
Page 1 of 14
General Fund
Financial Status Fiscal Year to Date: December 2025
Local Sales Tax Revenue
Amount Percent
Construction 2,214,393$ 930,859$ 5,086,266$ (4,155,407)$ 18% 2,130,135$
Utilities 2,235,783 2,186,218 4,316,890 (2,130,672) 51% 3,870,678
Retail 4,431,208 5,168,863 11,836,368 (6,667,505) 44% 11,263,467
Remote Seller 885,636 1,217,242 2,444,773 (1,227,531) 50% 2,672,498
Bed Tax 954,090 737,485 2,464,858 (1,727,373) 30% 1,890,713
Restaurant & Bar 1,283,468 1,502,805 3,726,636 (2,223,831) 40% 3,463,696
Other 642,439 722,858 1,941,265 (1,218,407) 37% 1,743,456
Cable Franchise 166,920 164,255 653,051 (488,796) 25% 653,051
Local Sales Tax Total 12,813,938$ 12,630,584$ 32,470,107$ (19,839,523)$ 39% 27,687,694$
State Shared Revenue
Amount Percent
State Income Tax 5,138,550$ 4,761,332$ 9,522,662$ (4,761,330)$ 50% 9,522,662$
State Sales Tax 3,585,804 3,633,129 7,376,599 (3,743,470) 49% 7,376,599
Vehicle License Tax 1,255,378 1,297,522 2,629,797 (1,332,275) 49% 2,629,797
Smart and Safe 138,177 131,143 334,826 (203,683) 39% 280,000
State Shared Total 10,117,909$ 9,823,126$ 19,863,884$ (10,040,758)$ 49% 19,809,058$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Total state shared revenues are performing in line with expectations with the
exception of Smart & Safe revenues.
Smart & Safe distributions occur twice per year, and the first payment was lower
than the prior year. Although statewide marijuana sales tax collections are up
compared to last year, distributions to cities and towns may decline because
revenues are first applied to cover state administrative and enforcement costs
before being allocated to cities and towns.
Overall, Local sales tax revenues are forecasted to fall short of budget
expectations by $4.7 million or 15%.
Sales tax collections decreased 9.7% compared to the same period last year, a
steeper decline than originally forecasted, primarily reflecting reduced activity in
the construction and hotel sectors. Construction-related revenue reflects both
the broader slowdown and specific project delays affecting the Marketplace hotel
and Vistoso Golf Club property apartment developments. Revenue is projected
to increase later in the fiscal year from the Oro Valley Marketplace apartment
project and renovation work advances at the Roche Ventana building. Retail and
restaurant sectors continue to perform consistently, and remote seller
collections maintains a positive growth trajectory.
Please refer to Appendix 4 for a detailed breakdown of local sales tax
collections.
$4.8
$3.6
$1.3
$0.1
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
State Income Tax State Sales Tax Vehicle License
Tax
Smart and Safe
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$0.9
$2.2
$5.2
$1.2 $0.7 $1.5 $0.7 $0.2$0
$2
$4
$6
$8
$10
$12
$14
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 2 of 14
General Fund
Financial Status Fiscal Year to Date: December 2025
Licenses & Permits Revenue
Amount Percent
Business Licenses & Permits 131,172$ 107,968$ 255,000$ (147,032)$ 42% 229,304$
Residential Building Permits 491,291 919,258 908,066 11,192 101% 1,346,042
Commercial Building Permits 182,822 277,805 750,077 (472,272) 37% 452,101
Other Building Permits and Fees 120,243 187,473 202,980 (15,507) 92% 290,032
Licenses & Permits Total 925,527$ 1,492,504$ 2,116,123$ (623,619)$ 71% 2,317,479$
Grants Revenue
Amount Percent
Federal grants 198,951$ 344,184$ 375,000$ (30,816)$ 92% 581,368$
State Grants 34,846 64,163 91,851 (27,688) 70% 116,851
Grants Total 233,797$ 408,347$ 466,851$ (58,504)$ 87% 698,219$
A total of 51 Single Family Residential (SFR) permits have been issued through
December (107 budgeted for the year).
Licenses and permits revenue is projected to exceed budget by 9.5%
overall, driven primarily by stronger building permit activity. The business
license and permit forecast was reduced 10% after FY25 actuals fell below
estimates. While commercial building permit activity exceeded expectations,
supporting a $200,000 increase to the estimate, $400,000 was reclassified to
residential permits for the Marketplace apartments and approximately 8% was
shifted to grading permit fees for the Oro Valley Marketplace project, resulting in
a net downward adjustment. These changes were partly offset by a $87,000
increase in other building permit revenues from large grading permits and
stronger fire permit activity.
Year End
Estimate
Grant revenues are performing better than expected.
A significant portion of the budgeted grants are allocated to the Police
Department. These grants can fluctuate based on factors such as officer
scheduling, overtime, and the timing of reimbursements and awards from grant
programs. The forecast for federal grant revenues has been increased by 55%,
reflecting funding from the HIDTA program and the Department of Homeland
Security.
About $72,000 of budgeted state grants is related to school resource officer
reimbursements for Leman Academy.
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
$0.1
$0.9
$0.3 $0.2
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
Business
Licenses &
Permits
Residential
Building Permits
Commercial
Building Permits
Other Building
Permits and
Fees
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$0.3
$0.1
$0.0
$0.1
$0.2
$0.3
$0.4
Federal grants State Grants
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 3 of 14
General Fund
Financial Status Fiscal Year to Date: December 2025
Intergovernmental Revenue
Amount Percent
School Resource Officers 77,436$ 151,437$ 409,502$ (258,065)$ 37% 409,502$
RTA Reimbursements 323,166 872,349 1,904,860 (1,032,511) 46% 1,904,860
PC Library District Reimburse - - 6,000 (6,000) - 6,000
Intergovernmental Total 400,602$ 1,023,786$ 2,320,362$ (1,296,576)$ 44% 2,320,362$
Charges for Service Revenue
Amount Percent
Enterprise Funds Cost Allocation 850,880$ 820,674$ 1,641,347$ (820,673)$ 50% 1,641,347$
Recreation Fees 448,118 487,295 978,950 (491,655) 50% 1,009,434
Development Fees 41,403 74,877 90,110 (15,233) 83% 115,110
Court Fees 55,020 55,712 115,000 (59,288) 48% 115,000
Other 88,155 122,442 224,816 (102,374) 54% 214,379
Charges for Service Total 1,483,576$ 1,561,000$ 3,050,223$ (1,489,223)$ 51% 3,095,270$
Charges for services are performing slightly greater than expectations.
Cost allocation charges to the Town’s enterprise funds for shared services,
along with Parks & Recreation fees, represent the majority of this revenue
category. The enterprise fund allocations are budgeted amounts distributed
evenly across all 12 months. The year-over-year decrease is mainly due to one-
time water system monitoring upgrades in the prior year that were funded
through the IT budget and charged to the Water Utility.
Recreation fee revenues were revised up 3.1% over budget, reflecting greater
field and court rentals than originally anticipated. Development fee revenues
were increased by $25,000 due to higher-than-expected engineering plan review
fees related to the Marketplace development.
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
Year End
Estimate
Intergovernmental revenues are performing in line with expectations.
These revenues are reimbursement-based and typically lag between the time
services are provided and when funds are received.
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
$0.2
$0.9
$0.0
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
School Resource
Officers
RTA Reimbursements PC Library District
Reimburse
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$0.8
$0.5
$0.1 $0.1 $0.1
$0.0
$0.5
$1.0
$1.5
$2.0
Enterprise
Funds Cost
Allocation
Recreation
Fees
Development
Fees
Court Fees Other
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 4 of 14
General Fund
Financial Status Fiscal Year to Date: December 2025
Other Revenue
Amount Percent
Fines 33,334$ 26,022$ 68,680$ (42,658)$ 38% 56,000$
Interest Earnings 420,465 343,913 637,500 (293,587) 54% 650,000
Miscellaneous 535,118 55,434 210,300 (154,866) 26% 236,999
Other Revenue Total 988,917$ 425,369$ 916,480$ (491,111)$ 46% 942,999$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
The year-over-year decrease of miscellaneous revenue is due to a one-time
rebate received from the Arizona Municipal Risk Retention Pool (AMRRP) in the
prior year.
Overall, other revenues are performing above expectations, driven by a higher
interest earnings and in-lieu income. The miscellaneous revenue forecast was
also increased due to insurance recoveries and asset sales.
$0.0
$0.3
$0.1
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
Fines Interest Earnings Miscellaneous
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 5 of 14
General Fund
Financial Status Fiscal Year to Date: December 2025
Expenditures by Department
Amount Percent
Clerk 255,331$ 199,188$ 446,275$ 247,087$ 45% 434,253$
Community & Econ. Dev. 1,665,087 1,553,713 4,275,011 2,721,298 36% 3,990,726
Council 134,851 134,357 216,163 81,806 62% 216,163
Finance 409,682 378,387 829,265 450,878 46%845,073
Non-Departmental 1,480,541 1,550,967 3,093,317 1,542,351 50% 3,093,317
Human Resources 315,434 331,010 744,887 413,877 44% 738,643
Information Technology 3,299,455 3,278,319 5,925,996 2,647,677 55% 5,795,867
Legal 512,726 454,212 1,193,587 739,375 38% 928,653
Town Manager 759,457 778,820 1,812,726 1,033,906 43% 1,785,399
Parks & Recreation 2,225,480 2,210,765 5,230,510 3,019,745 42% 5,071,840
Police 9,197,509 10,094,302 21,333,810 11,239,508 47% 21,066,750
Public Works 2,831,916 2,794,224 6,702,762 3,908,538 42% 6,731,762
Town Court 456,676 476,280 1,181,757 705,477 40% 1,133,279
Total Department Expenditures 23,544,146$ 24,234,544$ 52,986,066$ 28,751,522$ 46% 51,831,725$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
$0.2 $1.6 $0.1 $0.4 $1.6 $0.3
$3.3
$0.5 $0.8 $2.2
$10.1
$2.8
$0.5 $0.0
$5.0
$10.0
$15.0
$20.0
$25.0
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Overview:
Departments are spending within budget limits through December. Please note that Council and Information Technology typically incur higher upfront costs
early in the fiscal year.
Community & Economic Development:
Year-to-date personnel expenditures are below budget expectations due to turnover in two Building Inspector positions, the Economic Development
Program Manager, and a vacancy in the Code Compliance Specialist position. Year-to-date operating expenditures are also below budget, primarily due to
timing within the in-house Economic Development and Tourism program, where several planned initiatives have not yet begun.
Finance: Personnel costs are projected to exceed budget by approximately $16,000 due to a three-month overlap in the accounting specialist position,
allowing time to train the new employee who replaced a retiring staff member.
Legal: Personnel costs are trending below budget expectations and are projected to finish approximately 24% under budget, primarily due to current
vacancies in the Town Attorney and Chief Civil Deputy Attorney positions.
Police: The year-over-year increase is mainly due to an additional quarterly pension contribution to the Public Safety Personnel Retirement System
(PSPRS) that was recorded at the beginning of FY26 but applied to the prior fiscal year (FY25), along with increased personnel costs from wage
adjustments outlined in the most recent labor agreement. The department is still forecasted to be within budget due to vacancy savings and benefit election
differences from budget.
Public Works: Transit personnel costs are projected to exceed budget by $29,000 (0.7%) due to higher ridership demand requiring additional driver hours.
Please note, however, that Transit costs are reimbursed to the Town by the RTA.
Page 6 of 14
Highway Fund
Financial Status Fiscal Year to Date: December 2025
Sources `
Amount Percent
Licenses & Permits 21,232$ 15,345$ 30,000$ (14,656)$ 51% 35,000$
Highway User Revenue 2,056,452 2,058,671 4,456,367 (2,397,696) 46% 4,290,852
Interest Earnings 49,732 66,698 99,000 (32,302) 67% 120,000
Miscellaneous 2,835 38,783 2,500 36,283 1551% 40,489
Transfers In 2,000,000 1,000,000 2,000,000 (1,000,000) 50% 2,000,000
Total Sources 4,130,250$ 3,179,496$ 6,587,867$ (3,408,371)$ 48% 6,486,341$
Expenditures
Amount Percent
Personnel 603,770$ 622,424$ 1,348,218$ 725,794$ 46% 1,350,500$
O&M 507,299 524,357 1,317,935 793,578 40% 1,283,443
Capital Outlays 1,994,848 1,371,850 4,790,000 3,418,150 29% 4,790,000
Total Expenditures 3,105,917$ 2,518,631$ 7,456,153$ 4,937,522$ 34% 7,423,943$
Change in Fund Balance
Total Sources 4,130,250$ 3,179,496$ 6,587,867$ 6,486,341$
Total Expenditures (3,105,917) (2,518,631) (7,456,153) (7,423,943)
Change in Fund Balance 1,024,333$ 660,865$ (868,286)$ (937,603)$
Beginning Fund Balance 1,598,787$ 1,598,787$
Estimated Ending Fund Balance 2,259,652$ 661,184$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Year End
Estimate
Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Year End
Estimate
Highway Fund revenues and expenditures are performing generally in line with expectations through December. Due to HURF trending below
projections, the fund balance is expected to end about $69,000 less than budgeted.
Revenues:
Highway User Revenue (HURF) is currently coming in slightly under budget projections. In contrast, interest earnings and revenue from licenses and
permits are outperforming budget estimates. Miscellaneous revenues are above budget, driven by insurance reimbursements and proceeds from asset
sales. The scheduled $2 million transfer from the Capital Fund is allocated to support road improvement projects and is recognized evenly over the
course of the fiscal year.
Expenditures:
Personnel expenditures are projected to exceed budget by approximately 0.2%, primarily due to adjustments to maximum pay ranges in the adopted pay
plan that were not included in the original personnel forecast. Budgeted capital outlays include the Town’s annual pavement preservation program and
several capital improvement projects.
Page 7 of 14
Community Center Fund
Financial Status Fiscal Year to Date: December 2025
Revenues
Amount Percent
Local Sales Tax 1,807,862$ 593,099$ -$ 593,099$ na 593,099$
Contracted Operating Revenues 2,603,487 2,849,724 5,625,078 (2,775,354) 51% 6,604,000
Town Operating Revenues 652,793 680,537 1,534,043 (853,506) 44% 1,605,076
Other Revenues 5,324 29,654 60,172 (30,518) 49% 87,700
Total Revenues 5,069,466$ 4,153,014$ 7,219,293$ (3,066,279)$ 58% 8,889,875$
Uses
Amount Percent
Contracted Operating Expenditures 2,886,865$ 2,917,473$ 5,728,637$ 2,811,164$ 51% 5,989,482$
Town Operating Expenditures 1,049,284 1,137,176 2,427,461 1,290,285 47% 2,439,344
Capital Outlay 621,249 368,388 2,408,700 2,040,312 15% 2,408,700
Transfers Out 1,717,149 172,968 172,968 - 100% 172,968
Total Uses 6,274,547$ 4,596,005$ 10,737,766$ 6,141,761$ 43% 11,010,494$
Change in Fund Balance
Total Revenues 5,069,466$ 4,153,014$ 7,219,293$ 8,889,875$
Total Uses (6,274,547) (4,596,005) (10,737,766) (11,010,494)
Change in Fund Balance (1,205,082)$ (442,992)$ (3,518,473)$ (2,120,619)$
Beginning Fund Balance 2,921,900$ 2,921,900$
Estimated Ending Fund Balance 2,478,908$ 801,281$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
FY 2025/26
Budget
Year End
Estimate
Actual Vs. Budget
Year End
Estimate
Page 8 of 14
Community Center Fund
Financial Status Fiscal Year to Date: December 2025
Local Sales Tax Revenue
Amount Percent
Retail 1,107,802$ 367,836$ -$ 367,836$ - 367,836$
Remote Seller 221,409 79,650 - 79,650$ - 79,650
Restaurant & Bar 320,867 101,493 - 101,493 - 101,493
Other 157,784 44,120 - 44,120 - 44,120
Local Sales Tax Total 1,807,862$ 593,099$ -$ 593,099$ - 593,099$
Contracted Operating Revenue
Amount Percent
Golf Revenue, Trail & Cart Fees 1,198,378$ 1,323,395$ 2,818,625$ (1,495,230)$ 47% 3,424,000$
Member Dues 838,131 950,091 1,590,560 (640,469) 60%1,800,000
Food & Beverage (Overlook) 377,499 420,791 814,633 (393,842) 52%924,000
Merchandise & Other 189,478 155,447 401,260 (245,813) 39% 456,000
Contracted Revenue Total 2,603,487$ 2,849,724$ 5,625,078$ (2,775,354)$ 51% 6,604,000$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2024/25
Actuals
FY 2025/26
Actuals
Contracted golf revenues are forecasted to exceed budget by approximately
$979,000, or 17%, driven by strong membership numbers and increased public
play. Through December, 47,340 rounds have been played, which is essentially
in line with the prior year, reflecting a 0.1% decrease, and exceeding budget
expectations by 7.2%.
Please refer to Appendix 3 for or a more in-depth analysis of golf revenues,
expenses, and historical comparisons
Note: Estimated sales tax collections on golf operations for FY 2025/26 is
$174,562.
On August 13, 2025, the Town Council adopted Ordinance (O)25-04, removing
the spending restrictions on the half-cent sales tax and redirecting those
revenues to the General Fund, effective 30 days later in September.
Accordingly, the FY 2025/26 actual revenues shown here reflect only the first
two months of the fiscal year, during which the restriction was still in place. Any
operating shortfalls within this fund will be covered by transfers from the General
Fund at year-end.
For detailed information on total local sales tax collections, please refer to
Appendix 4.
FY 2025/26
Budget
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
Year End
Estimate
Actual Vs. Budget
$1.3
$1.0
$0.4
$0.2
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
Golf Revenue,
Trail & Cart
Fees
Member Dues Food &
Beverage
(Overlook)
Merchandise &
Other
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$0.4
$0.1 $0.1 $0.0
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Retail Remote Seller Restaurant &
Bar
Other
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 9 of 14
Community Center Fund
Financial Status Fiscal Year to Date: December 2025
Town Operating Revenue
Amount Percent
Daily Drop-Ins 34,369$ 26,807$ 75,625$ (48,818)$ 35% 63,233$
Member Dues 496,971 538,984 990,420 (451,436) 54% 1,103,100
Recreation Programs 73,531 60,884 382,500 (321,616) 16% 330,884
Facility Rental Income 47,922 53,861 85,498 (31,637) 63% 107,860
Town Operating Revenue Total 652,793$ 680,537$ 1,534,043$ (853,506)$ 44% 1,605,076$
Other Revenue
Amount Percent
Interest Income 2,961$ 29,585$ 22,500$ 7,085$ 131% 50,000
HOA Contributions - - 34,050 (34,050) - 34,050
Miscellaneous 2,363 69 3,622 (3,553) 2% 3,650
Other Revenue Total 5,324$ 29,654$ 60,172$ (30,518)$ 49% 87,700$
FY 2025/26
Actuals
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2024/25
Actuals
Year End
Estimate
The FY 2025/26 HOA contribution budget pertains to the HOAs associated with
the 9-hole Pusch Ridge course. FY 2025 was the final year of agreed upon
annual contributions to golf from HOAs on the 36-hole course.
Due to stronger-than-anticipated interest income, the year-end estimate has
been revised upward to $50,000.
FY 2025/26
Budget
Actual Vs. Budget
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
Town operating revenues are generally trending above budget. Daily drop-in
fees and in-house recreation programs are trending below budget, offset by
higher-than-expected member dues. Year-end estimates have been updated to
reflect Town Council–approved rate increases effective January 1, 2026.
The year-end estimate has been further refined to reflect lower anticipated
revenues from membership dues and recreation programs, partially offset by
slight increases in daily drop-ins and facility rental income.$0.0
$0.5
$0.1 $0.1
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Daily Drop-Ins Member Dues Recreation
Programs
Facility Rental
Income
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$0.0
$0.0 $0.0
$0.0
$0.1
Interest Income HOA Contributions Miscellaneous
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 10 of 14
Community Center Fund
Financial Status Fiscal Year to Date: December 2025
Contracted Operating Expenditures
Amount Percent
Personnel 950,281$ 994,033$ 1,992,268$ 998,235$ 50% 2,063,000$
Food & Beverage (Overlook) 355,344 370,884 751,271 380,387 49% 837,000
Operations & Maintenance 1,499,900 1,460,301 2,768,538 1,308,237 53% 2,849,678
Equipment Leases 81,341 92,255 216,560 124,305 43% 239,804
Contracted Expenditures Total 2,886,865$ 2,917,473$ 5,728,637$ 2,811,164$ 51% 5,989,482$
Town Operating Expenditures
Amount Percent
Personnel 611,104$ 586,287$ 1,303,239$ 716,952 45% 1,300,447$
Operations & Maintenance 438,179 550,888 1,124,222 573,334 49% 1,138,897
Town Operating Expenditures Total 1,049,284$ 1,137,176$ 2,427,461$ 1,290,285$ 47% 2,439,344$
FY26 Revised
Budget
Artificial Turf Installation at Community Center Entrance 150,000
Community Center Exterior Stucco Repair and Painting 190,500
Community Center Parking Lot Resurface 950,000
CRC ADA Exterior Restroom 325,000
Greenmaster Mower Replacement x2 (36-Hole)120,000
South Pump Station (36 Hole) 510,000
Pusch Ridge Tennis Bleachers and ADA Accessibility 163,200
2,408,700
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
List of FY26 Capital Projects:
Year End
Estimate
Town operating expenditures are trending above budget, primarily due to higher
credit card merchant fees, partially offset by modest projected savings in
personnel costs.
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Year End
Estimate
Contracted golf operating expenditures increased by 1.1% compared to the
same period last year, primarily due to higher labor and lease costs, partially
offset by water savings. Expenses are projected to exceed the budget by
approximately $261,000, or 4.6%, driven by higher merchandise sales costs,
increased labor expenses, and additional equipment and grounds maintenance
costs.
$0.6 $0.6
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
Personnel Operations & Maintenance
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
$1.0
$0.4
$1.5
$0.1
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
Personnel Food & Beverage
(Overlook)
Operations &
Maintenance
Equipment
Leases
Mi
l
l
i
o
n
s
FY 2024/25 Actuals FY 2025/26 Actuals FY 2025/26 Budget
Page 11 of 14
Capital Fund
Financial Status Fiscal Year to Date: December 2025
Sources `
Amount Percent
Vehicle Reserves 466,745$ 514,463$ 1,028,926$ (514,463)$ 50%
Interest Earnings 308,034 289,250 470,000 (180,750) 62%
Miscellaneous 3,722 84,239 40,000 44,239 211%
Transfers In from General Fund 3,569,894 4,500,000 5,000,000 (500,000) 90%
Total Sources 4,348,395$ 5,387,952$ 6,538,926$ (1,150,974)$ 82%
Uses
Amount Percent
O&M 61,604$ 7,811$ -$ (7,811)$ na
Capital Outlays 2,467,169 5,779,834 11,867,973 6,088,139 49%
Transfers Out 2,000,000 1,059,109 2,234,200 1,175,091 47%
Total Uses 4,528,774$ 6,846,754$ 14,102,173$ 7,255,419$ 49%
Change in Fund Balance
Total Sources 4,348,395$ 5,387,952$ 6,538,926$
Total Uses (4,528,774) (6,846,754) (14,102,173)
Change in Fund Balance (180,379)$ (1,458,802)$ (7,563,247)$
Beginning Fund Balance 16,847,866$
Estimated Ending Fund Balance 9,284,619$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Sources:
Quarterly transfers in from the General Fund support capital improvement projects as budgeted. A one-time additional transfer of $2 million
resulted from Town Council's direction to reduce the General Fund reserve from 30% to 25%. In addition, an annual reserve for vehicle
replacement is established based on the purchase price and expected lifespan of Town-owned vehicles. This reserve is allocated evenly over
twelve months and charged to the General Fund each month.
Uses:
O&M costs reflect the purchase of smaller, non-capitalized equipment used to outfit new Police vehicles. Capital outlays through December
consist primarily of the Council-directed purchase of a building for the planned new Police Headquarters (approximately $3.8 million), along with
related urgent building maintenance and inspection costs, the finalization of the Town Court expansion project, the VTNP Pond Restoration
project, and planned Police vehicle replacements. The budget also includes $2 million in transfers to the Highway Fund for capital improvement
projects, recorded evenly across four quarters. An additional $234,200 is budgeted for transfer to the Grants Fund to cover the Town’s 20%
match for transit vehicles funded primarily through federal grants.
Page 12 of 14
Water Utility Fund
Financial Status Fiscal Year to Date: December 2025
Revenues `
Amount Percent
Water Sales 9,675,426$ 10,180,430$ 18,511,000$ (8,330,570)$ 55% 18,749,524$
Charges For Services 1,768,952 1,818,197 3,457,000 (1,638,803) 53% 3,423,800
Interest Earnings 149,119 215,473 100,000 115,473 215% 400,000
Miscellaneous 29,585 2,037 20,000 (17,964) 10% 21,047
Total Revenues 11,623,082$ 12,216,136$ 22,088,000$ (9,871,864)$ 55% 22,594,370$
Uses
Amount Percent
Personnel 1,637,984$ 1,613,089$ 3,985,725$ 2,372,636$ 40% 3,807,621$
O&M 4,970,216 5,076,445 11,552,175 6,475,730 44% 11,357,287
Capital Outlays 698,456 778,718 2,327,639 1,548,921 33% 2,330,896
Debt Service 3,116,988 3,523,708 3,890,977 367,269 91% 3,890,977
Transfers Out 2,333 2,712,816 9,883,004 7,170,188 27% 9,883,004
Total Uses 10,425,977$ 13,704,776$ 31,639,520$ 17,934,744$ 43% 31,269,785$
Note: Excludes non-cash outlays for depreciation & amortization
Change in Fund Balance
Total Revenues 11,623,082$ 12,216,136$ 22,088,000$ 22,594,370$
Total Uses (10,425,977) (13,704,776) (31,639,520) (31,269,785)
Change in Fund Balance 1,197,105$ (1,488,640)$ (9,551,520)$ (8,675,415)$
Beginning Fund Balance 14,762,151$ 14,762,151$
Estimated Ending Fund Balance 13,273,512$ 6,086,737$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Year End
Estimate
Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Revenues:
Water sales are trending above budget, primarily driven by higher irrigation and commercial water sales. Charges for services are expected to fall below budget
projections due to fewer late fees than anticipated. Interest earnings are surpassing budget estimates as a result of interest generated from invested bond and
loan proceeds, with the year-end forecast increased to $400,000. Miscellaneous revenues are projected to exceed budget expectations due to insurance
recoveries.
Uses:
Personnel: Expenditures are trending below budget due to vacancies in several positions, including two Water Utility Operators, a Water Operations Supervisor,
and a Water Control Systems Supervisor.
Operations & Maintenance: Projected savings in CAP water deliver charges and gasoline.
Debt Service: The full annual principal payment is recorded at the beginning of the fiscal year, while interest payments occur semiannually in January and June. A
detailed schedule of outstanding debt issuances is provided in Appendix 6.
Transfers Out: Transfers are primarily to the Water Resource Impact Fee Fund to support NWRRDS capital projects and represent 40% of groundwater
preservation fee revenues. This transfer is recorded at year-end and may vary based on actual revenue collections. A smaller transfer of $3,004 was made to the
Debt Service Fund for debt repayment.
Page 13 of 14
Stormwater Utility Fund
Financial Status Fiscal Year to Date: December 2025
Revenues `
Amount Percent
Charges For Services 764,014$ 769,402$ 1,527,000$ (757,598)$ 50% 1,543,429$
Grants - - 239,200 (239,200) - -
Interest Earnings 21,476 23,418 20,000 3,418 117% 48,000
Total Revenues 785,489$ 792,820$ 1,786,200$ (993,380)$ 44% 1,591,429$
Expenses
Amount Percent
Personnel 445,606$ 423,279$ 990,258$ 566,979$ 43% 964,105$
O&M 150,039 166,250 444,755 278,505 37% 385,661
Capital Outlays - - 718,000 718,000 - 50,000
Total Expenses 595,646$ 589,529$ 2,153,013$ 1,563,484$ 27% 1,399,766$
Note: Excludes non-cash outlays for depreciation
Change in Fund Balance
Total Revenues 785,489$ 792,820$ 1,786,200$ 1,591,429$
Total Expenses (595,646) (589,529) (2,153,013) (1,399,766)
Change in Fund Balance 189,844$ 203,291$ (366,813)$ 191,662$
Beginning Fund Balance 1,447,723$ 1,447,723$
Estimated Ending Fund Balance 1,651,014$ 1,639,386$
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Year End
Estimate
Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget Year End
Estimate
FY 2024/25
Actuals
FY 2025/26
Actuals
FY 2025/26
Budget
Actual Vs. Budget
Revenues:
Charges for service are trending slightly higher than budget (1.1%). Budgeted grant revenue consists of a federal grant supporting the Sierra Wash at Glover
Road Infrastructure Repair and Rehabilitation capital project which will likely not be received until next fiscal year.
Expenses:
Personnel: Savings are expected due to the Senior Engineering Associate position being vacant for 1.5 months and filled at a lower rate than budgeted.
Operations & Maintenance: Savings are anticipated in outside professional service, gasoline and vehicle repair and maintenance.
Capital Outlays: Budgeted capital expenditures include general infrastructure maintenance and three major capital improvement projects:
- Sierra Wash at Glover Road Infrastructure Repair and Rehabilitation ($318,000)
- Sierra Wash at Via Mandarina Drainage Improvements ($50,000)
- Oro Valley Drive Drainage and Pavement Improvements ($300,000)
The Oro Valley Drive Drainage and Pavement Improvements project ($300,000) was taken over by Pima County and has been removed from the year-end
estimate. Sierra Wash at Glover Road will likely be delayed into FY27 awaiting a grant.
Page 14 of 14
APPENDIX 1
El Conquistador Golf Mgmt.,
LLC Report Date: 12/31/2025
El Conquistador Golf Course
Dec - 2025 Budget Dec - 2024 Bud Var PY Var Dec - 2025 Budget Dec - 2024 Bud Var PY Var
Rounds
Public 6,034 5,200 5,882 834 152 23,726 19,750 22,176 3,976 1,550
Member 4,318 4,125 4,317 193 1 21,494 20,865 21,410 629 84
Tournament 131 575 648 (444) (517) 2,120 3,555 3,804 (1,435) (1,684)
Total Rounds 10,483 9,900 10,847 583 (364)47,340 44,170 47,390 3,170 (50)
Membership Fees 173,550.14 146,000.00 157,946.76 27,550.14 15,603.38 950,091.41 785,000.00 838,131.48 165,091.41 111,959.93
Total Membership Revenue 173,550.14 146,000.00 157,946.76 27,550.14 15,603.38 950,091.41 785,000.00 838,131.48 165,091.41 111,959.93
Sales - Green Fees 263,262.87 197,500.00 236,223.80 65,762.87 27,039.07 964,499.29 744,750.00 836,114.69 219,749.29 128,384.60
Sales - Tournament 2,874.60 22,000.00 30,692.16 (19,125.40) (27,817.56)80,123.54 138,000.00 152,798.58 (57,876.46) (72,675.04)
Sales - Member Rounds 882.00 350.00 361.97 532.00 520.03 3,718.00 1,600.00 1,709.96 2,118.00 2,008.04
Lessons & Clinics 1,525.00 1,500.00 1,840.00 25.00 (315.00)7,090.92 13,000.00 11,515.00 (5,909.08) (4,424.08)
Range, Rental & Other Golf Related 7,205.51 7,600.00 13,534.64 (394.49) (6,329.13)63,943.11 42,075.00 61,348.59 21,868.11 2,594.52
Cart Fees 38,451.94 32,350.00 36,780.17 6,101.94 1,671.77 204,019.79 166,000.00 184,673.31 38,019.79 19,346.48
Golf Fees Revenue 314,201.92 261,300.00 319,432.74 52,901.92 (5,230.82)1,323,394.65 1,105,425.00 1,248,160.13 217,969.65 75,234.52
Sales - Soft Goods 21,847.96 23,385.00 21,320.10 (1,537.04)527.86 65,500.55 74,160.00 79,341.10 (8,659.45) (13,840.55)
Sales - Hard Goods 19,238.30 12,550.00 14,523.25 6,688.30 4,715.05 67,261.29 50,800.00 56,938.14 16,461.29 10,323.15
Merchandise Revenue 41,086.26 35,935.00 35,843.35 5,151.26 5,242.91 132,761.84 124,960.00 136,279.24 7,801.84 (3,517.40)
Other Revenue 6,614.36 500.00 9,999.26 6,114.36 (3,384.90)12,233.38 14,000.00 3,417.58 (1,766.62)8,815.80
Other Revenue 6,614.36 500.00 9,999.26 6,114.36 (3,384.90)12,233.38 14,000.00 3,417.58 (1,766.62)8,815.80
Sales - Food 36,198.25 775.00 41,991.78 35,423.25 (5,793.53)196,144.17 2,250.00 191,720.84 193,894.17 4,423.33
Sales - Beer 21,544.20 2,000.00 26,235.72 19,544.20 (4,691.52)120,199.00 6,350.00 119,500.92 113,849.00 698.08
Sales - Wine 3,111.54 0.00 2,705.90 3,111.54 405.64 12,770.42 0.00 9,279.72 12,770.42 3,490.70
Sales - Liquor 8,049.46 100.00 10,471.50 7,949.46 (2,422.04)46,369.99 525.00 44,044.66 45,844.99 2,325.33
Group Service Charges 0.00 0.00 4,453.89 0.00 (4,453.89)55,758.89 0.00 12,952.40 55,758.89 42,806.49
Food & Beverage Revenue 68,903.45 2,875.00 85,858.79 66,028.45 (16,955.34)431,242.47 9,125.00 377,498.54 422,117.47 53,743.93
TOTAL REVENUE 604,356.13 446,610.00 609,080.90 157,746.13 (4,724.77)2,849,723.75 2,038,510.00 2,603,486.97 811,213.75 246,236.78
Expenses
COS - Merchandise 36,462.11 25,639.25 27,115.31 (10,822.86) (9,346.80)96,538.73 88,640.00 97,705.61 (7,898.73)1,166.88
COS - Food 12,413.59 232.50 14,652.78 (12,181.09)2,239.19 77,842.71 675.00 70,601.27 (77,167.71) (7,241.44)
COS - Beer 7,173.94 600.00 7,483.85 (6,573.94)309.91 36,479.76 1,905.00 34,809.11 (34,574.76) (1,670.65)
COS - Wine 1,128.43 0.00 795.45 (1,128.43) (332.98)3,901.11 0.00 2,870.98 (3,901.11) (1,030.13)
COS - Liquor 1,662.41 30.00 2,269.32 (1,632.41)606.91 12,841.74 157.50 11,231.54 (12,684.24) (1,610.20)
Cost of Sales 58,840.48 26,501.75 52,316.71 (32,338.73) (6,523.77)227,604.05 91,377.50 217,218.51 (136,226.55) (10,385.54)
Gross Margin 545,515.65 420,108.25 556,764.19 125,407.40 (11,248.54)2,622,119.70 1,947,132.50 2,386,268.46 674,987.20 235,851.24
Month-to-Date Year-to-Date
APPENDIX 1
Page 1 of 3
APPENDIX 1
El Conquistador Golf Mgmt.,
LLC Report Date: 12/31/2025
El Conquistador Golf Course
Dec - 2025 Budget Dec - 2024 Bud Var PY Var Dec - 2025 Budget Dec - 2024 Bud Var PY Var
Month-to-Date Year-to-Date
Salaries & Wages 165,951.70 151,789.00 178,988.84 (14,162.70)13,037.14 1,026,985.52 796,184.00 979,321.62 (230,801.52) (47,663.90)
Payroll Taxes 15,088.13 13,100.00 15,813.29 (1,988.13)725.16 75,431.73 63,650.00 77,873.09 (11,781.73)2,441.36
Workers Comp 3,537.80 2,500.00 3,077.10 (1,037.80) (460.70)22,900.98 15,000.00 17,269.22 (7,900.98) (5,631.76)
Employee Benefits 14,111.31 15,000.00 11,671.90 888.69 (2,439.41)62,476.56 65,500.00 66,425.68 3,023.44 3,949.12
Other Employee Benefits 2,414.57 1,300.00 1,444.26 (1,114.57) (970.31)18,322.36 7,800.00 8,661.47 (10,522.36) (9,660.89)
Total Payroll & Benefits 201,103.51 183,689.00 210,995.39 (17,414.51)9,891.88 1,206,117.15 948,134.00 1,149,551.08 (257,983.15) (56,566.07)
Meals & Entertainment 708.93 475.00 721.73 (233.93)12.80 2,869.57 3,275.00 4,654.97 405.43 1,785.40
Travel 0.00 225.00 248.24 225.00 248.24 3,697.10 2,550.00 2,930.11 (1,147.10) (766.99)
Other Employee Related 521.34 0.00 769.89 (521.34)248.55 521.34 0.00 769.89 (521.34)248.55
Total Employee Related 1,230.27 700.00 1,739.86 (530.27)509.59 7,088.01 5,825.00 8,354.97 (1,263.01)1,266.96
R&M - Equipment 14,464.24 7,300.00 6,014.07 (7,164.24) (8,450.17)94,782.86 87,300.00 82,779.08 (7,482.86) (12,003.78)
R&M - Building 1,120.67 0.00 0.00 (1,120.67) (1,120.67)5,155.58 15,500.00 9,975.22 10,344.42 4,819.64
R&M - Golf Course & Tennis Courts 1,010.93 4,000.00 4,220.09 2,989.07 3,209.16 13,032.57 22,000.00 26,246.20 8,967.43 13,213.63
R&M - Other 413.07 400.00 0.00 (13.07) (413.07)2,478.42 2,400.00 1,604.16 (78.42) (874.26)
Sod 0.00 0.00 0.00 0.00 0.00 0.00 1,000.00 1,067.72 1,000.00 1,067.72
Sand & Gravel 3,116.16 2,000.00 0.00 (1,116.16) (3,116.16)14,989.71 13,500.00 14,899.07 (1,489.71) (90.64)
Seed & Mulch 0.00 0.00 0.00 0.00 0.00 116,507.48 145,000.00 125,697.74 28,492.52 9,190.26
Gas, Diesel, Oil & Lubricants 5,180.72 4,450.00 0.00 (730.72) (5,180.72)24,514.57 26,700.00 20,037.03 2,185.43 (4,477.54)
Fertilizers 5,081.69 6,500.00 4,767.07 1,418.31 (314.62)30,053.56 49,000.00 27,668.52 18,946.44 (2,385.04)
Chemicals 11,070.57 4,700.00 4,331.10 (6,370.57) (6,739.47)64,751.12 41,150.00 27,035.06 (23,601.12) (37,716.06)
Total Repairs & Maintenance 41,458.05 29,350.00 19,332.33 (12,108.05) (22,125.72)366,265.87 403,550.00 337,009.80 37,284.13 (29,256.07)
Marketing & Advertising 930.50 1,120.00 1,403.42 189.50 472.92 6,026.13 7,570.00 11,166.18 1,543.87 5,140.05
Computer Related 2,140.42 0.00 0.00 (2,140.42) (2,140.42)10,259.92 0.00 0.00 (10,259.92) (10,259.92)
Dues & Subscriptions 3,070.68 3,870.00 3,240.62 799.32 169.94 24,323.55 23,220.00 19,788.61 (1,103.55) (4,534.94)
Operating Supplies 6,214.13 7,300.00 8,711.09 1,085.87 2,496.96 60,887.66 47,575.00 67,452.59 (13,312.66)6,564.93
Linens & Laundry 786.12 0.00 768.45 (786.12) (17.67)4,648.23 0.00 5,144.57 (4,648.23)496.34
Postage 0.00 75.00 0.00 75.00 0.00 272.56 225.00 287.66 (47.56)15.10
Member Relations (213.39)0.00 2,915.79 213.39 3,129.18 880.68 1,000.00 5,629.69 119.32 4,749.01
Uniforms 1,286.57 3,000.00 1,216.17 1,713.43 (70.40)3,917.94 6,175.00 5,701.09 2,257.06 1,783.15
Other Operating 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,182.00 0.00 1,182.00
Merchant Processing Fees 9,463.68 8,900.00 10,205.69 (563.68)742.01 38,263.55 31,000.00 32,872.22 (7,263.55) (5,391.33)
Bank Fees 0.00 0.00 1,004.56 0.00 1,004.56 (31.83)0.00 1,004.56 31.83 1,036.39
Cash Short / (Over) 372.97 0.00 0.00 (372.97) (372.97)419.99 0.00 0.00 (419.99) (419.99)
Centralized Services 2,528.32 2,125.00 2,369.62 (403.32) (158.70)13,832.49 12,750.00 13,007.62 (1,082.49) (824.87)
Tournament Expenses 0.00 0.00 969.15 0.00 969.15 0.00 0.00 969.15 0.00 969.15
Total Operating Expenses 26,580.00 26,390.00 32,804.56 (190.00)6,224.56 163,700.87 129,515.00 164,205.94 (34,185.87)505.07
Operating Profit 275,143.82 179,979.25 291,892.05 95,164.57 (16,748.23)878,947.80 460,108.50 727,146.67 418,839.30 151,801.13
APPENDIX 1
Page 2 of 3
APPENDIX 1
El Conquistador Golf Mgmt.,
LLC Report Date: 12/31/2025
El Conquistador Golf Course
Dec - 2025 Budget Dec - 2024 Bud Var PY Var Dec - 2025 Budget Dec - 2024 Bud Var PY Var
Month-to-Date Year-to-Date
Electric & Gas 20,193.87 23,000.00 19,736.67 2,806.13 (457.20)142,986.70 160,500.00 149,082.68 17,513.30 6,095.98
Water 74,188.91 55,450.00 55,543.78 (18,738.91) (18,645.13)566,998.23 634,950.00 623,457.15 67,951.77 56,458.92
Telephone & Internet Connection 645.98 875.00 1,142.69 229.02 496.71 4,252.78 5,250.00 4,495.07 997.22 242.29
Other Third-party Services 4,013.34 3,325.00 3,375.67 (688.34) (637.67)23,473.74 32,000.00 33,561.95 8,526.26 10,088.21
Total Utilities 99,042.10 82,650.00 79,798.81 (16,392.10) (19,243.29)737,711.45 832,700.00 810,596.85 94,988.55 72,885.40
Lease Expense - Fixed 15,077.76 14,582.00 13,258.76 (495.76) (1,819.00)90,466.56 87,492.00 79,552.56 (2,974.56) (10,914.00)
Lease Expense - Short-term & Other 298.11 298.00 298.11 (0.11)0.00 1,788.66 2,338.00 2,361.51 549.34 572.85
Total Leases 15,375.87 14,880.00 13,556.87 (495.87) (1,819.00)92,255.22 89,830.00 81,914.07 (2,425.22) (10,341.15)
Fixed Operating Expenses 114,417.97 97,530.00 93,355.68 (16,887.97) (21,062.29)829,966.67 922,530.00 892,510.92 92,563.33 62,544.25
Gross Operating Profit 160,725.85 82,449.25 198,536.37 78,276.60 (37,810.52)48,981.13 (462,421.50) (165,364.25)511,402.63 214,345.38
Insurance 7,546.50 6,000.00 5,877.20 (1,546.50) (1,669.30)45,279.01 36,000.00 36,144.61 (9,279.01) (9,134.40)
Bad Debt Expense 236.61 400.00 2,915.80 163.39 2,679.19 642.12 1,200.00 4,536.55 557.88 3,894.43
Fees, Permits, & Licenses 907.38 1,550.00 240.00 642.62 (667.38)4,347.74 5,225.00 4,356.46 877.26 8.72
Base Management Fees 11,040.81 11,094.00 10,824.32 53.19 (216.49)66,461.35 66,564.00 64,945.92 102.65 (1,515.43)
Other Expenses 19,731.30 19,044.00 19,857.32 (687.30)126.02 116,730.22 108,989.00 109,983.54 (7,741.22) (6,746.68)
Net Operating Income 140,994.55 63,405.25 178,679.05 77,589.30 (37,684.50) (67,749.09) (571,410.50) (275,347.79)503,661.41 207,598.70
Incentive Management Fee 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8,030.62 0.00 8,030.62
NET INCOME 140,994.55 63,405.25 178,679.05 77,589.30 (37,684.50) (67,749.09) (571,410.50) (283,378.41)503,661.41 215,629.32
EBITDA 140,994.55 63,405.25 178,679.05 77,589.30 (37,684.50) (67,749.09) (571,410.50) (283,378.41)503,661.41 215,629.32
APPENDIX 1
Page 3 of 3
APPENDIX 2
Operating:Through Dec Budget Cumulative
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY2024 FY2025 FY2026 FY 2026 Actuals
Revenue
36 Hole 500,158 1,883,452 1,798,304 2,171,484 2,367,136 2,593,395 3,522,083 3,674,489 3,856,880 4,724,718 4,933,178 2,284,032 4,311,050 34,309,309
Pusch Ridge - 105,370 99,134 59,726 106,184 98,316 - 380,375 414,225 528,346 619,276 209,831 528,628 2,620,783
F&B - Overlook - 606,171 708,594 745,766 671,582 554,336 448,782 671,479 725,222 766,679 865,944 355,861 785,400 7,120,416
Total Revenue 500,158 2,594,993 2,606,032 2,976,976 3,144,902 3,246,047 3,970,865 4,726,343 4,996,327 6,019,743 6,418,398 2,849,724 5,625,078 44,050,507
Expenses
36 Hole 1,112,252 3,588,714 3,936,889 3,817,932 3,771,706 3,891,341 3,915,216 3,740,982 3,929,757 4,263,007 4,365,456 2,308,014 4,468,886 42,641,265
Pusch Ridge - 253,513 256,769 236,160 230,196 287,112 - 319,702 390,959 478,320 516,762 238,575 508,480 3,208,069
F&B - Overlook - 861,740 823,383 841,866 785,499 701,538 440,382 630,509 596,910 684,037 756,376 370,884 751,271 7,493,123
Total Expenses 1,112,252 4,703,967 5,017,041 4,895,958 4,787,401 4,879,991 4,355,598 4,691,193 4,917,626 5,425,364 5,638,594 2,917,473 5,728,637 53,342,457
Profit/(Loss)
36 Hole (612,094) (1,705,262) (2,138,585) (1,646,448) (1,404,570) (1,297,946) (393,133) (66,493) (72,877) 461,711 567,722 (23,982) (157,836) (8,331,957)
Pusch Ridge - (148,143) (157,635) (176,434) (124,012) (188,796) - 60,673 23,266 50,026 102,514 (28,745) 20,148 (587,286)
F&B - Overlook - (255,569) (114,789) (96,100) (113,917) (147,202) 8,400 40,970 128,312 82,642 109,569 (15,023) 34,129 (372,707)
Total Operating
Profit/(Loss)(612,094) (2,108,974) (2,411,009) (1,918,982) (1,642,499) (1,633,944) (384,733) 35,150 78,701 594,379 779,804 (67,749) (103,559) (9,291,950)
Capital Investments 45,116 47,909 29,464 - - 131,035 2,828,061 4,619,904 2,184,848 743,897 119,998 630,000 10,750,233
Initial purchase (1)300,000 350,000 350,000 1,000,000
Notes: (1) $1,000,000 original purchase of courses and community center
1/2 cent sales tax 506,710 2,030,750 2,199,466 2,330,941 2,463,034 2,584,916 2,947,420 3,535,507 3,707,578 3,792,744 3,904,926 593,099 - 30,597,091
HOA contributions - - - - - - 125,000 159,050 159,050 159,050 159,050 - 34,050 761,200
POST AGREEMENTPRE AGREEMENT
Town of Oro Valley
Golf Analysis
APPENDIX 2
Page 1 of 2
APPENDIX 2
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FY 2024
Gross Margin 213,698 225,040 295,419 332,783 495,412 480,305 525,109 589,339 694,275 586,473 430,577 294,092
Expenses 406,558 333,614 420,523 454,504 412,959 349,298 308,213 291,616 334,623 326,900 398,960 530,376
Net Income/(Loss) (192,860) (108,573) (125,103) (121,721) 82,453 131,007 216,896 297,723 359,652 259,573 31,617 (236,284)
FY 2025
Gross Margin 263,005 299,163 297,857 375,363 594,117 556,764 534,838 706,996 737,685 675,958 450,287 378,899
Expenses 411,466 416,806 442,887 488,946 531,458 378,085 374,611 318,371 420,446 381,953 453,967 476,826
Net Income/(Loss) (148,461) (117,643) (145,030) (113,583) 62,659 178,679 160,226 388,625 317,239 294,005 (3,681) (97,927)
FY 2026
Gross Margin 337,860 344,855 377,531 402,476 613,880 545,516
Expenses 416,385 419,190 518,351 474,811 456,611 404,521
Net Income/(Loss) (78,525) (74,335) (140,820) (72,334) 157,270 140,995 - - - - - -
Town of Oro Valley
Golf Analysis - Contractor Financials
-
200,000
400,000
600,000
800,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Gross Income by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
-
100,000
200,000
300,000
400,000
500,000
600,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Total Expenses by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
(400,000)
(200,000)
-
200,000
400,000
600,000
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Comparison of Net Income/(Loss) by Month - Total Golf Operations
FY 2024
FY 2025
FY 2026
APPENDIX 2
Page 2 of 2
APPENDIX 3
Consolidated Year-to-Date Financial Report through December 2025 FY 2025/2026
Fund
FY 25/26
Beginning
Fund Balance Revenue
Other Fin
Sources/
Transfers In Total In Personnel O&M Capital
Debt
Service
Other Fin
Uses/
Transfers Out Total Out
Fund Balance
Through
December 2025
General Fund 20,702,401 27,364,715 - 27,364,715 17,121,828 7,028,157 84,559 - 8,203,829 32,438,373 15,628,744
Highway Fund 1,598,787 2,179,496 1,000,000 3,179,496 622,424 524,357 1,371,850 - - 2,518,631 2,259,652
Grants and Contributions Fund 60,787 369,306 59,109 428,415 406 93,971 312,426 - - 406,803 82,399
Seizure & Forfeiture - Justice/State 374,906 7,733 - 7,733 - - - - - - 382,639
Community Center Fund 2,921,900 4,153,014 - 4,153,014 586,287 3,468,361 368,388 - 172,968 4,596,005 2,478,908
Municipal Debt Service Fund 53,800 110,149 3,918,566 4,028,715 - 8,413 - 3,428,051 - 3,436,463 646,051
Water Resource System & Dev. Impact Fee Fund 6,481,181 930,395 2,709,812 3,640,207 - 84,040 6,931,946 557,505 - 7,573,491 2,547,897
Townwide Roadway Dev Impact Fee Fund 3,095,031 487,955 - 487,955 - - - - - - 3,582,986
Parks & Recreation Impact Fee Fund 381,038 311,404 - 311,404 - - - - - - 692,442
Police Impact Fee Fund 122,916 97,978 - 97,978 - - - - 38,765 38,765 182,128
Capital Fund 16,847,866 887,952 4,500,000 5,387,952 - 7,811 5,779,834 - 1,059,109 6,846,754 15,389,064
PAG/RTA Fund 446,926 7,528 - 7,528 - 8,400 70,000 - - 78,400 376,055
Water Utility 14,762,151 12,216,136 - 12,216,136 1,613,089 5,076,445 778,718 3,523,708 2,712,816 13,704,776 13,273,512
Stormwater Utility 1,447,723 792,820 - 792,820 423,279 166,250 - - - 589,529 1,651,014
Benefit Self Insurance Fund 3,995,323 2,056,035 - 2,056,035 - 2,482,610 - - - 2,482,610 3,568,748
Recreation In-Lieu Fee Fund 52,018 764 - 764 - - - - - - 52,781
Total 73,344,754 51,973,380 12,187,487 64,160,867 20,367,314 18,948,815 15,697,721 7,509,264 12,187,487 74,710,600 62,795,020
APPENDIX 4
Local Sales Tax Collections
FY 2025/26 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
Construction Sales Tax 179,150 163,435 98,998 89,454 243,032 156,790 930,859
Utility Sales Tax 302,786 412,779 407,129 429,423 372,182 261,920 2,186,218
Retail Sales Tax 941,576 897,606 867,961 893,562 934,258 1,001,735 5,536,699
Remote Seller Sales Tax 192,279 205,970 220,208 196,932 221,954 259,550 1,296,892
Bed Tax 112,651 91,706 92,611 115,225 146,552 178,739 737,485
Restaurant & Bar Sales Tax 269,228 238,235 263,782 292,127 270,580 270,346 1,604,297
All Other Local Sales Tax *115,341 108,925 133,051 119,804 136,567 153,290 766,978
Monthly Total 2,113,010$ 2,118,656$ 2,083,741$ 2,136,528$ 2,325,125$ 2,282,369$ 13,059,428$
Cumulative Total 2,113,010$ 4,231,666$ 6,315,407$ 8,451,935$ 10,777,059$ 13,059,428$
Monthly variance (220,775)$ (201,284)$ (240,986)$ (191,015)$ (279,060)$ (262,332)$
Cumulative variance (220,775)$ (422,059)$ (663,045)$ (854,060)$ (1,133,120)$ (1,395,452)$
FY 2024/25 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
Construction Sales Tax 427,032 291,729 371,199 324,860 545,601 253,973 356,030 414,112 171,326 130,317 296,873 293,764 3,876,815
Utility Sales Tax 306,838 399,701 417,156 405,901 370,322 335,865 288,120 341,375 312,662 259,576 253,922 266,994 3,958,432
Retail Sales Tax 937,920 893,895 855,486 893,023 923,982 1,034,704 1,317,644 978,283 891,361 1,032,305 1,001,099 922,356 11,682,057
Remote Seller Sales Tax 164,541 176,303 174,003 175,191 187,988 229,019 275,105 193,315 178,898 200,958 196,195 199,852 2,351,368
Bed Tax 107,778 180,045 136,688 120,312 177,934 231,333 286,851 209,622 320,232 321,945 252,906 177,851 2,523,496
Restaurant & Bar Sales Tax 271,259 239,294 251,212 286,989 268,563 287,017 374,825 280,614 314,687 382,887 280,512 327,412 3,565,273
All Other Local Sales Tax *118,418 138,973 118,983 121,267 129,793 172,790 208,896 179,929 219,760 224,200 183,278 134,802 1,951,088
Monthly Total 2,333,785$ 2,319,940$ 2,324,727$ 2,327,543$ 2,604,184$ 2,544,700$ 3,107,472$ 2,597,249$ 2,408,926$ 2,552,188$ 2,464,785$ 2,323,029$ 29,908,529$
Cumulative Total 2,333,785$ 4,653,725$ 6,978,452$ 9,305,995$ 11,910,179$ 14,454,879$ 17,562,351$ 20,159,600$ 22,568,526$ 25,120,715$ 27,585,500$ 29,908,529$
*Does not include cable franchise fees or sales tax audit revenues
APPENDIX 5
General Fund State Shared Revenues
FY 2025/26 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
State Shared Income Tax 793,555 793,555 793,555 793,555 793,555 793,556 4,761,332
State Shared Sales Tax 619,095 603,827 595,627 602,207 623,385 588,988 3,633,129
County Auto Lieu 216,240 215,390 219,757 235,357 160,740 250,037 1,297,522
Smart and Safe - - - - - 131,143 131,143
Monthly Total 1,628,891$ 1,612,772$ 1,608,939$ 1,631,119$ 1,577,680$ 1,763,724$ 9,823,125$
Cumulative Total 1,628,891$ 3,241,663$ 4,850,602$ 6,481,721$ 8,059,402$ 9,823,125$
Monthly variance (59,126)$ (41,479)$ (26,784)$ (47,715)$ (82,925)$ (36,755)$
Cumulative variance (59,126)$ (100,605)$ (127,389)$ (175,104)$ (258,029)$ (294,783)$
FY 2024/25 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
State Shared Income Tax 856,425 856,425 856,425 856,425 856,425 856,425 856,425 856,425 856,425 856,425 856,425 856,425 10,277,099
State Shared Sales Tax 593,796 582,212 575,094 597,416 614,349 622,937 724,079 596,353 582,965 677,435 632,153 618,346 7,417,134
County Auto Lieu 237,795 215,615 204,204 224,993 189,831 182,939 128,184 304,691 257,209 119,394 230,779 325,869 2,621,504
Smart and Safe - - - - - 138,177 - - 15 - - 148,981 287,173
Monthly Total 1,688,016$ 1,654,252$ 1,635,723$ 1,678,834$ 1,660,605$ 1,800,479$ 1,708,688$ 1,757,469$ 1,696,614$ 1,653,254$ 1,719,357$ 1,949,620$ 20,602,911$
Cumulative Total 1,688,016$ 3,342,268$ 4,977,991$ 6,656,825$ 8,317,430$ 10,117,909$ 11,826,596$ 13,584,065$ 15,280,679$ 16,933,933$ 18,653,291$ 20,602,911$
APPENDIX 6
Debt Service Expense
Adopted Forecast Forecast Forecast Forecast Forecast Forecast Forecast Final Payment
2025/26 2026/27 2027/28 2028/29 2029/30 2030-2035 2036-2040 2041-2045
Date
Municipal Debt Service Fund
Excise Tax Revenue Bonds - - -
2010 CREBS 186,370 176,066 170,437 - - - - - 2028
2012 Revenue Bonds 224,631 227,147 224,125 - - - - - 2028
2015a Refunding Excise Tax 304,379 - - - - - - - 2026
2016 Excise Tax 172,968 172,635 172,236 172,760 172,207 344,447 - - 2032
2017a Refunding Excise Tax 138,645 138,626 - - - - - - 2027
2018a Excise Tax Revenue Obligation 171,515 171,446 171,502 171,429 171,229 684,420 - - 2034
2021 Parks & Rec Excise Tax 1,543,300 1,544,800 1,539,425 1,542,050 1,537,550 7,693,950 7,682,400 3,063,900 2042
2021 Pension Obligation Bonds 1,271,262 1,266,350 1,264,118 1,264,461 1,262,588 6,312,780 5,036,273 - 2039
Total Municipal Debt Service Fund 4,013,070 3,697,070 3,541,843 3,150,700 3,143,574 15,035,597 12,718,673 3,063,900
Community Center Fund
Contracts Payable
Leased Fitness Equipment 7,668 - - - - - - - 2026
Financed Fitness Equipment 22,677 7,559 - - - - - - 2027
Golf Carts 130,867 76,339 - - - - - - 2027
Leased Copiers 76,800 76,800 12,800 - - - - - 2028
Total Community Center Fund 238,012 160,698 12,800 - - - - -
WRSDIF Fund
Excise Tax Revenue Bonds
2021b Excise Tax Revenue Obligation (4) 55,924 56,015 55,596 34,453 8,255 - - - 2030
2025b Senior Lien Water Revenue Obligation (5) 455,408 455,411 455,408 455,409 455,410 2,277,041 - - 2035
2025b WIFA Loan (6) 493,700 468,639 468,639 468,639 468,639 2,343,196 2,343,196 2,343,196 2045
Total WSRDIF Fund 1,005,032 980,065 979,643 958,501 932,304 4,620,237 2,343,196 2,343,196
Water Utility Fund
Excise Tax Revenue Bonds
2015b Refunding Revenue Bonds (1) 148,500 - - - - - - 2026
2017b Refunding Revenue Bonds (2) 1,619,650 1,619,032 - - - - - - 2027
2018b Excise Tax Revenue Obligation (3) 508,532 508,144 508,118 507,710 506,914 2,024,062 - - 2034
2021a Excise Tax Revenue Obligations (4) 743,499 744,714 739,138 458,046 109,745 - - - 2030
2025a Senior Lien Water Revenue Obligation (5) 303,605 303,607 303,605 303,606 303,607 1,518,027 - - 2035
Water Revenue Loans
2014 WIFA Loan 371,750 371,509 371,261 371,006 - - - - 2029
2025a WIFA Loan (6) 329,134 312,426 312,426 312,426 312,426 1,562,131 1,562,131 1,562,131 2045
Total Water Utility Fund 4,024,671 3,859,432 2,234,549 1,952,794 1,232,692 5,104,220 1,562,131 1,562,131
TOTAL DEBT SERVICE - ALL FUNDS 9,280,785 8,697,265 6,768,834 6,061,995 5,308,571 24,760,053 16,624,000 6,969,227
(5) Series 2025 debt service is split between the Water Utility Fund (40%) and the Water Impact fee Fund (60%).
(6) 2025 WIFA loan debt service is split between the Water Utility Fund (40%) and the Water Impact fee Fund (60%).
(1) Series 2015 for municipal operation facilities debt service is split between General Fund excise tax revenue (67%) and water revenue (33%).
(2) Series 2017 debt service is split between General Fund excise tax revenue (8%) and water revenue (92%).
(3) Series 2018 for water infrastucture and police evidence and substation facility. Debt service is split between General Fund excise tax revenue (25%) and water revenue (75%).
(4) Series 2021 debt service is split between the Water Utility Fund (93%) and the Water Impact fee Fund (7%).
APPENDIX 7
Town of Oro Valley
Operating Investment Summary
Fiscal Year 2025/26
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
LGIP
Ending Market Value 11,048,264$ 10,564,199$ 9,802,412$ 8,759,464$ 10,446,793$ 10,759,658$
Investment Income 34,213$ 41,256$ 34,954$ 31,477$ 35,518$ 33,762$
1-Month Yield 4.33% 4.32% 4.18% 4.09% 3.97% 3.81%
PFM Asset Management
Closing Market Value 39,752,553$ 38,301,783$ 37,918,398$ 37,062,569$ 35,042,894$ 34,056,344$
Investment Income 199,738$ 172,343$ 102,243$ 130,423$ 207,951$ 80,876$
Annualized Yield to
Maturity at Cost 4.51% 4.54% 4.53% 4.53% 4.54% 4.53%
Wells Fargo Sweep
Ending Balance 3,413,781$ 6,187,767$ 2,581,008$ 4,856,250$ 4,081,463$ 3,859,896$
Investment Income 13,910$ 10,451$ 15,825$ 13,151$ 10,020$ 9,793$
7-Day Simple Yield 4.18% 4.18% 4.01% 4.00% 3.84% 3.65%
Total Ending Balance 54,214,597$ 55,053,750$ 50,301,818$ 50,678,283$ 49,571,151$ 48,675,898$
Total Investment Income 247,861$ 224,050$ 153,022$ 175,052$ 253,489$ 124,431$
APPENDIX 8
Town of Oro Valley - Development Impact Fee Fund Projects
Parks and Recreation Facilities
Description Cost Completed?
Skate Park $1,500,000 Yes
Playground and Parking Lot $1,700,000 Yes
Multiuse Fields (lighted) $1,200,000 Yes
Dog Park $150,000 Yes
Developed Park Land $927,694
Park Amenities $2,501,696
Police
Police Substation Debt $1,198,500
Police Vehicles $846,050
Street Facilities
La Cholla Blvd, Tangerine Rd-Lambert Ln - Road Widening $1,700,000 Yes
Shannon Rd, Tangerine Rd-Naranja Dr - New Road $1,000,000
Lambert Ln. .5 mi E of Shannon-Rancho Sonora - Road Widening $1,000,000
Rancho Vistoso & Woodburne - Intersection Improvement $750,000
Oracle Rd & Rams Field Intersection - Intersection Improvement $750,000
Moore Rd La Cholla Blvd - Intersection Improvement $900,000
Moore Rd - Extension E of Rancho Vistoso Blvd - New Road & Intersection $1,026,840 Yes
Moore Rd & La Canada Dr Intersection - Intersection Improvement $1,200,000 Yes
Glover Rd Multi Use Path - Multi-modal facility $150,000 Yes
Glover Rd south half widening - Road Widening $500,000 Yes
Water Facilities
Water Supply
Steam Pump D-Zone Well $1,500,000
Program Management Support Services (P) $1,050,000 Yes
Well Improvement Analysis and Recovery Permits (P) $150,000 Yes
Well Drilling and Testing (P) $300,000 Yes
Construction Permitting, Drilling, Development and Testing (P) $1,500,000 Yes
Well Equipment Design and Site Improvements (P) $1,800,000 Yes
Storage
Palisades C-Zone Storage Tank and Pipeline $4,250,000
Pressure Zone G Storage Expansion $8,000,000
Pressure Zone G, H and I Storage Expansion $4,000,000
Forebay Design (P)$99,231 Yes
Forebay Reservoir Construction (P) $900,000 Yes
Shannon Rd Forebay Reservoir And Booster Station Prop (Ind.) $240,000 Yes
Forebay Reservoir Booster Station Design (Ind.) $90,000 Yes
Shannon Rd Forebay Reservoir and Booster Station Design (Ind.) $180,000 Yes
Booster Station Construction Forebay Res. (Ind.) $300,000 Yes
Shannon Road Forebay Res. Construction (Ind.) $840,000 Yes
Shannon Road Forebay Res. Construction (Ind.) $540,000 Yes
Arizona municipalities can charge development fees to cover the cost of infrastructure improvements needed to support new
development. These fees are one-time payments used to fund projects like building new roads, parks, or water facilities. The amount of
the fee is determined by an Infrastructure Improvements Plan (IIP) and land use assumptions. Importantly, development fees can only
be used for building new infrastructure or paying off debt for growth-related projects. They cannot be used for ongoing maintenance,
repairs, or addressing existing problems. The Town's IIP includes public services for parks and recreation facilities, police facilities,
street facilities, and water facilities.
Below is a list of identified IIP projects use in the latest impact fee study to calculate the development fees. These are projects that
would be eligible to be funded by development fees as outlined in ARS § 9-463.05 (T)(7)(a).
APPENDIX 8
Page 1 of 2
APPENDIX 8
Water Facilities Continued
Description Cost Completed?
Distribution
Moore Road F-Zone Interconnect $750,000
Water Plant 14 Booster Capacity Expansion $250,000
Pipeline Design (Recovery Water & Transmission) (P) $660,692 Yes
Pipeline Construction (P) $4,320,000
Pipeline Route Study and Preliminary Design (Ind.) $120,000 Yes
Pipeline Easement Acquisition (Ind.) $450,000 Yes
Pipeline Design (Ind.) $600,000 Yes
Pipeline Construction NWRRDS to La Canada Res. (Ind.) $5,880,000
Interconnect to Tangerine Rd. (Ind.) $270,000 Yes
Interconnect to Lambert Lane (Ind.) $510,000 Yes
APPENDIX 8
Page 2 of 2
Budget and Finance Commission 3.
Meeting Date:03/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
DISCUSSION AND POSSIBLE RECOMMENDATION OF DRAFT PSPRS PENSION FUNDING POLICY FOR
FISCAL YEAR 2027
RECOMMENDATION:
Staff recommends approval of the draft PSPRS pension funding policy for next fiscal year.
EXECUTIVE SUMMARY:
Each local government must annually update its PSPRS pension funding policy according to the Arizona Revised
Statutes.
Highlights of the proposed PSPRS pension funding policy are the following:
1) The Annual Required Contribution (ARC) will be paid from operating revenues.
2) The Town will contribute the required actuary-recommended rate of 10.47%, plus an additional excess
contribution of $214,185, or approximately $1,229,119.
3) The 20-year amortization of any unfunded actuarial accrued liability will continue to be utilized.
The Town has set a target to be fully funded on its PSPRS Unfunded Accrued Actuarial Liability by June 30, 2037.
BACKGROUND OR DETAILED INFORMATION:
The PSPRS pension funding policy is required by HB 2097, which amends Arizona Revised Statutes Title 38,
Chapter 5, Article 4, and was approved by the Governor on April 3, 2018. The policy must be updated and
approved annually by the governing body of a local government participating in the plan. The intent of the revision
in state law is to highlight to governing bodies and the public, the approach local governments are taking in
addressing unfunded, accrued, actuarial liabilities of their public safety retirement plan(s).
The draft policy pertaining to next fiscal year is attached and includes a number of updates from the current year,
including necessary updates to the actuarial assets, liabilities and unfunded accrued liabilities. A "redline" copy of
the draft showing all changes from the current policy is also attached.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
I MOVE to recommend Town Council approval of the updated PSPRS pension funding policy for the fiscal year
ending June 30, 2027, as presented.
-OR-
I MOVE to recommend Town Council approval of the updated PSPRS pension funding policy for the fiscal year
ending June 30, 2027, with the following changes: ___
Attachments
Current pension funding policy FY26
FY27 Draft Redline policy
FY27 Draft PSPRS Pension Funding Policy
FY25 PSPRS Actuarial Report
FY25 CORP Actuarial Report
Arizona Public Safety Personnel
Retirement System
ORO VALLEY POLICE DEPT. (122)
Actuarial Valuation
As of June 30, 2025
Contributions Applicable to the Plan/
Fiscal Year Ending June 30, 2027
13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · www.foster-foster.com
November 2025
Board of Trustees
Arizona Public Safety Personnel Retirement System
Re: Actuarial Valuation as of June 30, 2025 for Oro Valley Police Dept. (122)
Dear Members of the Board,
This report details the annual actuarial valuation of the Arizona Public Safety Personnel Retirement System
(PSPRS) as of June 30, 2025. The valuation was performed to measure the plan’s liability and funding levels
and to determine the actuarially appropriate funding requirements for the applicable plan year. This report
was prepared for use by the Board and those designated or approved by the Board. Use of the results for
other purposes may not be applicable and could produce significantly different results.
DATA AND ASSUMPTIONS
In preparing this report, we have relied on personnel, plan design, and asset information supplied by PSPRS.
In our opinion, the assumptions used in the valuation, as adopted by the Board, represent reasonable
expectations of anticipated fund experience. Other sets of assumptions and methods could also be reasonable
and could produce materially different results. While we cannot verify the accuracy of all this information, the
supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no
reason to doubt the substantial accuracy of the information and believe that it has produced appropriate
results. This information, along with any adjustments or modifications, is summarized in various sections of
this report.
DISCLOSURES AND LIMITATIONS
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to factors such as the following: plan experience differing from that anticipated by the economic
or demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period); and changes in plan provisions or applicable law. Due to the limited scope of this
report, we did not provide an analysis of these potential differences.
The computed contribution rates shown in the “Contribution Results” section should be considered minimum
contribution rates that comply with the Board’s funding policy and Arizona Statutes. Users of this report
should be aware that contributions made at that rate do not guarantee benefit security. Given the importance
of benefit security to any retirement system, we suggest that contributions to the System in excess of those
presented in this report be considered.
The funding percentages and unfunded accrued liability as measured based on the actuarial value of assets
will differ from similar measures based on the market value of assets. These measures, as provided, are
appropriate for determining the adequacy of future contributions, but may not be appropriate for the purpose
of settling a portion or all of its liabilities.
This valuation assumes the continuing ability of the participating employers to make the contributions
necessary to fund this plan. A determination regarding whether or not the participating employers are
actually able to do so is outside our scope of expertise. Consequently, we did not perform such an analysis.
In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and
costs. These results are reviewed in the aggregate and for individual sample lives. The output from the
software is either used directly or input into internally developed models to generate the costs. All internally
developed models are reviewed as part of the process. As a result of this review, we believe that the models
have produced reasonable results. We do not believe there are any material inconsistencies among
assumptions or unreasonable output produced due to the aggregation of assumptions.
ACTUARIAL CERTIFICATION
The valuation has been conducted in accordance with all applicable laws and regulations, as well as generally
accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued
by the Actuarial Standards Board; specifically No. 6 for Measuring Retiree Group Benefit Obligations/No. 4 for
Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, No. 23 for Data Quality,
No. 27 for Selection of Economic Assumptions for Measuring Pension Obligations, No. 35 for Selection of
Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, No. 44, Selection and
Use of Asset Valuation Methods for Pension Valuations, and No. 51, Assessment and Disclosure of Risk
Associated with Measuring Pension Obligations.
In our opinion, the Minimum Required Contribution set forth in this report constitutes a reasonable actuarially
determined contribution under Actuarial Standard of Practice No. 4.
The undersigned are familiar with the immediate and long-term aspects of pension/OPEB valuations and meet
the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions
contained herein. All of the sections of this report are considered an integral part of the actuarial opinions.
To our knowledge, no associate of Foster & Foster, Inc. working on this report has any direct financial interest
or indirect material interest in the Arizona Public Safety Personnel Retirement System, nor does anyone at
Foster & Foster, Inc. act as a member of the PSPRS Board of Trustees. Thus, there is no relationship existing
that might affect our capacity to prepare and certify this actuarial report.
Respectfully submitted,
Foster & Foster, Inc.
____________________________ ____________________________
Bradley R. Heinrichs, FSA, EA, MAAA Paul M. Baugher, FSA, EA, MAAA
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
TABLE OF CONTENTS
SUMMARY................................................................................................................................ 5
CONTRIBUTION RESULTS .............................................................................................................. 8
Development of Employer Contributions – Tiers 1 & 2 Members ............................................... 8
Development of Employer Contributions – Tier 3 Defined Benefit (DB) Members ..................... 9
Development of Contributions – Tier 3 Defined Contribution (DC) Members .......................... 10
Contribution Rate Summary ....................................................................................................... 11
Impact of Additional Contributions ............................................................................................ 12
Historical Summary of Rates ...................................................................................................... 13
LIABILITY SUPPORT ................................................................................................................... 14
Liabilities and Funded Ratios by Benefit - Tiers 1 & 2 ................................................................ 14
Liabilities and Funded Ratios by Benefit - Tier 3 ........................................................................ 15
Derivation of Experience (Gain)/Loss ......................................................................................... 16
Amortization of Unfunded Liabilities - Tiers 1 & 2 ..................................................................... 17
Amortization of Unfunded Liabilities - Tier 3 ............................................................................. 17
ASSET SUPPORT ....................................................................................................................... 18
MEMBER STATISTICS ................................................................................................................. 23
Statistical Data – Active Members.............................................................................................. 23
Statistical Data – Inactive Members ........................................................................................... 24
Active Age, Service and Pay Distributions – Tiers 1 & 2 ............................................................. 25
Active Age, Service and Pay Distributions – Tier 3 ..................................................................... 26
Age Distributions – Inactive Members ....................................................................................... 27
ACTUARIAL ASSUMPTIONS AND METHODS ..................................................................................... 28
PLAN PROVISIONS .................................................................................................................... 35
ACTUARIAL FUNDING POLICY ...................................................................................................... 41
SUPPLEMENTARY INFORMATION .................................................................................................. 46
Glossary ...................................................................................................................................... 46
Discussion of Risk ....................................................................................................................... 50
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
5
SUMMARY
The regular annual actuarial valuation of the Arizona Public Safety Personnel Retirement System for the Oro
Valley Police Dept., performed as of June 30, 2025, has been completed and the results are presented in this
Report. The purpose of this valuation is to:
Compute the employers’ recommended contribution rates for the fiscal year ending June 30, 2027.
This information is contained in the section entitled “Contribution Results”.
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and active
members and compare accumulated assets with the liabilities to assess the funded condition. This
information is contained in the section entitled “Liability Support.”
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
EMPLOYER CONTRIBUTION REQUIREMENTS (AS A PERCENTAGE OF PAYROLL)
Tiers 1 & 2 Members
Pension 10.47% 12.61%
Health 0.00% 0.00%
Total 10.47% 12.61%
Tier 3 Members 1
Pension 8.58% 8.41%
Health 0.11% 0.11%
Total 8.69% 8.52%
FUNDED STATUS
Tiers 1 & 2 Members
Pension 101.0% 98.6%
Health 181.6% 164.8%
Total 101.9% 99.4%
Tier 3 Members
Pension 102.4% 107.9%
Health 198.3% 216.2%
Total 103.6% 109.5%
1 The Tier 3 rates shown are the calculated rates as of the valuation date and do not reflect any Legacy costs that the
employer must also contribute.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
6
CHANGES FROM PRIOR YEAR
Changes in the results from the prior year’s valuation can be illustrated in the following tables along with high-
level explanations for the entire System below:
CONTRIBUTION RATE
Tiers 1 & 2 Tier 3 Members
Pension Health Pension Health
Contribution Rate Last Valuation 12.61% 0.00% 8.41% 0.11%
Asset Experience (0.74%) (0.02%) (0.17%) 0.00%
Payroll Base 0.01% 0.00% 0.00% 0.00%
Liability Experience (0.90%) 0.00% (0.32%) 0.00%
Additional Contribution (1.63%) 0.00% 0.00% 0.00%
Assumption/Method Change 0.00% 0.00% 0.00% 0.00%
Compensation Limit Update 0.00% 0.00% 0.67% 0.00%
Other 1.12% 0.02% (0.01%) 0.00%
Contribution Rate This Valuation 10.47% 0.00% 8.58% 0.11%
FUNDED STATUS
Tiers 1 & 2 Tier 3 Members
Pension Health Pension Health
Funded Status Last Valuation 98.6% 164.8% 107.9% 216.2%
Asset Experience 0.7% 1.4% 1.9% 4.1%
Liability Experience 0.8% 21.7% 3.6% 0.7%
Additional Contribution 1.2% 0.0% 0.0% 0.0%
Assumption/Method Change 0.0% 0.0% 0.0% 0.0%
Compensation Limit Update 0.0% 0.0% 0.0% 0.0%
Other (0.3%) (6.3%) (11.0%) (22.7%)
Funded Status This Valuation 101.0% 181.6% 102.4% 198.3%
Asset Experience – Asset gains and losses (relative to the assumed earnings rate) are smoothed over seven
years for Tiers 1 and 2 and over five years for Tier 3. The return on the market value of assets for the year
ending June 30, 2025 was 11.0% for Tiers 1 and 2 and 12.5% for Tier 3. On a smoothed, actuarial value of
assets basis, the average return was 7.9% for Tiers 1 and 2 and 9.2% for Tier 3. The returns exceeded the 2024
assumed earnings rate for Tiers 1 and 2 of 7.2% and the 2024 assumed earnings rate for Tier 3 of 7.0%.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
7
Payroll Base – Under the current amortization policy for Tiers 1 and 2, the contribution rate is developed as a
level percentage of payroll. Payroll for this purpose includes members of this plan and the defined
contribution plan’s members that would have been in this plan. To the extent that actual payroll is
lower/greater than last year’s projected payroll, the contribution rate will increase/decrease as a result.
Liability Experience – Experience overall was unfavorable, with key sources of loss coming from inactive
mortality, actual COLAs, and other data changes.
Additional Contribution – Monies contributed in excess of the required contribution rate in order to pay down
the unfunded liability.
Assumption / Method Change – The Board continued the decrease in the payroll growth assumption from
1.50% to 0.75%.
Compensation Limit Update – The Tier 3 compensation limit was updated, as scheduled, with a sizable
increase over expectation.
Other – This is the combination of all other factors that could impact liabilities year-over-year, with the
primary sources being changes in benefits for continuing inactives. Tier 3 members were also impacted by
the increase in the compensation limit.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
8
CONTRIBUTION RESULTS
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIERS 1 & 2 MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Normal Cost
Total Normal Cost 18.12% $ 926,988 18.59% $ 1,089,184
Employee Cost (7.65%) (391,361) (7.65%) (448,212)
Employer (Net) Normal Cost 10.47% 535,627 10.94% 640,972
Amortization of Unfunded Liability 0.00% 0 1.67% 97,845
Total Employer Cost (Pension) 10.47% 535,627 12.61% 738,817
HEALTH
Normal Cost 0.31% 15,859 0.33% 19,335
Amortization of Unfunded Liability (0.31%) (15,859) (0.33%) (19,335)
Total Employer Cost (Health) 0.00% 0 0.00% 0
Total Employer Cost (Pension + Health) 10.47% 535,627 12.61% 738,817
Alternate Contribution Rate (ACR) 1 8.00% 8.00%
Underlying Payroll (as of valuation date) 5,077,744 5,772,393
The results above are based on the current amortization schedule approved by the Board of Trustees for your
individual plan (see "Actuarial Assumptions and Methods").
1 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 8% minimum) and is charged when retirees return to active status.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
9
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIER 3 DEFINED BENEFIT (DB) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Total Normal Cost 17.15% $ 575,672 16.82% $ 451,906
Amortization of Unfunded Liability 0.00% 0 0.00% 0
Total Pension Cost 17.15% 575,672 16.82% 451,906
HEALTH
Total Normal Cost 0.21% 7,049 0.22% 5,911
Amortization of Unfunded Liability 0.00% 0 0.00% 0
Total Health Cost 0.21% 7,049 0.22% 5,911
TOTAL
Calculated Tier 3 Required EE/ER Individual Cost 8.69% 291,361 8.52% 228,909
Funding Policy Tier 3 Required EE/ER Individual
Cost 1 8.66% 290,689 8.69% 233,476
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 2 0.00% 0 1.67% 44,868
Funding Policy Tier 3 ER Defined Benefit Cost 8.66% 290,689 10.36% 278,344
Underlying Payroll (as of valuation date) 3,331,699 2,647,015
1 The “Funding Policy” cost was adopted in 2023 and first reflected in the June 30, 2023 valuation. This cost is a 3-year
rolling average of the actual calculated costs. The total cost is split equally between employer and employee, in
compliance with state statutes. Note that pension and health monies are split differently for the two parties based on
IRS requirements. More information on this breakout is included in the “Historical Summary of Rates”.
2 Pursuant to ARS § 38-843(B), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
10
DEVELOPMENT OF CONTRIBUTIONS – TIER 3 DEFINED CONTRIBUTION (DC) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
TIER 2 & 3 DB / NON-SOCIAL SECURITY
Employee Cost 3.00% 3.00%
Employer Cost 1 3.00% 3.00%
TIER 3 DC ONLY
Employee Cost 9.00% $ 13,396 9.00% $ 5,830
Employee Health Subsidy Program Cost 0.18% 268 0.20% 130
Employee Disability Program Cost 1.60% 2,381 1.54% 998
Total Employee Cost 10.78% 16,045 10.74% 6,958
Employer Cost 9.00% 13,396 9.00% 5,830
Employer Health Subsidy Program Cost 0.18% 268 0.20% 130
Employer Disability Program Cost 1.60% 2,381 1.54% 998
Total Employer Cost (before Legacy) 10.78% 16,045 10.74% 6,958
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 2 0.00% 0
1.67% 1,082
Total Employer Cost (with Legacy) 10.78% 16,045 12.41% 8,040
Underlying Payroll (as of valuation date) 147,734 63,816
1 Employer rate is 4% for Tier 2 members for a period of time depending on the individual's membership date.
2 Pursuant to ARS § 38-843(B), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
11
CONTRIBUTION RATE SUMMARY
Tier 1 Tier 2 Tier 3
Membership Date On or After 7/1/1968 1/1/2012 7/1/2017
Participates in Social Security N/A Yes No Yes No N/A
Available Retirement Plan 1 DB Only DB Only Hybrid DB Only Hybrid DC Only
EMPLOYEE CONTRIBUTION RATE
PSPRS DB Rate 7.65% 7.65% 7.65% 8.66% 8.66% PSPRS DC Rate 3.00% 3.00% 9.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 1.60%
Total EE Contribution Rate 7.65% 7.65% 10.65% 8.66% 11.66% 10.78%
EMPLOYER CONTRIBUTION RATE
PSPRS DB Normal Cost 10.78% 10.78% 10.78% 8.66% 8.66% PSPRS DB Tier 1 & 2 Legacy Cost 2 (0.31%) (0.31%) (0.31%) 0.00% 0.00% 0.00%
PSPRS DC Rate 3.00% 3.00% 9.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 1.60%
Total ER Contribution Rate 10.47% 10.47% 13.47% 8.66% 11.66% 10.78%
Employer Alternate Contribution Rate 3 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Exhibit summarizes employee and employer contributions based on Statute and the results of June 30, 2025
actuarial valuation. Pension and health components are combined, where applicable.
1 Employers that pay into Social Security on behalf of their members do not participate in the Hybrid Plan.
2 Per statute (ARS § 38-843(B)), any positive unfunded liability for Tiers 1 and 2 is to be applied to all Tier 3 (DB and DC)
payrolls
3 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 8% minimum) and is charged when retirees return to active status.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
12
IMPACT OF ADDITIONAL CONTRIBUTIONS
Additional Contribution (000s)
Impact On $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000
Funded Status - June 30, 2025 101.0% 102.1% 103.2% 104.3% 105.4% 106.5% 107.6% 108.8% 109.9% 111.0% 112.1%
FYE 2027 Contribution Rate 10.47% 9.27% 8.06% 6.86% 5.66% 4.45% 3.25% 2.05% 0.85% 0.00% 0.00%
Table shows the hypothetical change in the funded status and contribution rate from the June 30, 2025 actuarial valuation results for Tiers 1 & 2 if
an additional contribution of the amount shown had been made to the Fund on June 30, 2025. This illustration can help estimate the impact of
contributing additional monies to the fund in the future.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation Report as of June 30, 2025 – Oro Valley Police Dept. (122)
13
HISTORICAL SUMMARY OF RATES
Pension Health
Valuation
Date June 30
Fiscal Year
Ending June 30
Normal
Cost
Unfunded
Amortization Total Normal
Cost
Unfunded
Amortization Total
TIERS 1 & 2 2021 2023 13.09% 30.38% 43.47% 0.45% (0.45%) 0.00%
(Employer) 2022 2024 11.00% 0.00% 11.00% 0.41% (0.41%) 0.00%
2023 2025 10.91% 5.31% 16.22% 0.34% (0.34%) 0.00%
2024 2026 10.94% 1.67% 12.61% 0.33% (0.33%) 0.00%
2025 2027 10.47% 0.00% 10.47% 0.31% (0.31%) 0.00%
TIER 3 1 2021 2023 9.68% 0.00% 9.68% 0.26% 0.00% 0.26%
(Employer) 2022 2024 9.30% 0.00% 9.30% 0.26% 0.00% 0.26%
2023 2025 8.77% 0.00% 8.77% 0.12% 0.00% 0.12%
2024 2026 8.46% 0.00% 8.46% 0.23% 0.00% 0.23%
2025 2027 8.43% 0.00% 8.43% 0.23% 0.00% 0.23%
TIER 3 2021 2023 9.68% 0.00% 9.68% 0.26% 0.00% 0.26%
(Employee) 2022 2024 9.30% 0.00% 9.30% 0.26% 0.00% 0.26%
2023 2025 8.77% 0.00% 8.77% 0.12% 0.00% 0.12%
2024 2026 8.69% 0.00% 8.69% 0.00% 0.00% 0.00%
2025 2027 8.66% 0.00% 8.66% 0.00% 0.00% 0.00%
1 All Tier 3 rates shown (employer and employee) are Board approved Funding Policy rates. Starting in 2023, these rates are a 3-year rolling average of calculated
EE/ER rates. Does not reflect Legacy costs that the employer must also contribute.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
14
LIABILITY SUPPORT
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIERS 1 & 2
Pension liabilities were increased by $857,273 and health liabilities were increased by $13,879 under the
lateral transfer methodology.
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 52,987,686 $ 46,079,112
DROP Members 12,019,150 13,233,011
Vested Members 1,109,503 910,525
Active Members 31,064,576 35,460,056
Total Actuarial Present Value of Benefits 97,180,915 95,682,704
Actuarial Accrued Liability (AAL)
All Inactive Members 66,116,339 60,222,648
Active Members 24,153,409 27,533,294
Total Actuarial Accrued Liability 90,269,748 87,755,942
Actuarial Value of Assets (AVA) 91,172,990 86,551,076
Unfunded Actuarial Accrued Liability (903,242) 1,204,866
PVB Funded Ratio (AVA / PVB) 93.8% 90.5%
AAL Funded Ratio (AVA / AAL) 101.0% 98.6%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 440,307 $ 399,204
DROP Members 184,009 196,061
Active Members 526,538 620,360
Total Present Value of Benefits 1,150,854 1,215,625
Actuarial Accrued Liability (AAL)
All Inactive Members 624,316 595,265
Active Members 417,583 491,844
Total Actuarial Accrued Liability 1,041,899 1,087,109
Actuarial Value of Assets (AVA) 1,891,781 1,791,666
Unfunded Actuarial Accrued Liability (849,882) (704,557)
PVB Funded Ratio (AVA / PVB) 164.4% 147.4%
AAL Funded Ratio (AVA / AAL) 181.6% 164.8%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
15
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIER 3
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 7,291,337 $ 7,268,826
Vested Members 14,157,384 9,523,410
Active Members 986,667,595 710,626,649
Total Actuarial Present Value of Benefits 1,008,116,316 727,418,885
Actuarial Accrued Liability (AAL)
All Inactive Members 21,448,721 16,792,236
Active Members 225,991,622 148,879,454
Total Actuarial Accrued Liability 247,440,343 165,671,690
Actuarial Value of Assets (AVA) 253,309,023 178,758,433
Unfunded Actuarial Accrued Liability (5,868,680) (13,086,743)
PVB Funded Ratio (AVA / PVB) 25.1% 24.6%
AAL Funded Ratio (AVA / AAL) 102.4% 107.9%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 33,666 $ 34,351
Active Members 12,076,315 9,825,773
Total Present Value of Benefits 12,109,981 9,860,124
Actuarial Accrued Liability (AAL)
All Inactive Members 33,666 34,351
Active Members 3,279,150 2,398,606
Total Actuarial Accrued Liability 3,312,816 2,432,957
Actuarial Value of Assets (AVA) 6,568,894 5,259,235
Unfunded Actuarial Accrued Liability (3,256,078) (2,826,278)
PVB Funded Ratio (AVA / PVB) 54.2% 53.3%
AAL Funded Ratio (AVA / AAL) 198.3% 216.2%
The liabilities shown on this page are the liabilities for all Tier 3 members grouped together in the Risk Sharing
group. These liabilities are NOT the liabilities solely for Oro Valley Police Dept. Tier 3 members.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
16
DERIVATION OF EXPERIENCE (GAIN)/LOSS
Tiers 1 & 2 Tier 3
Pension Health Pension Health
(1) Unfunded Actuarial Accrued Liability as of June 30, 2024 1,204,866 (704,557) (13,086,743) (2,826,278)
(2) Normal Cost Developed in Last Valuation 640,972 19,335 25,222,643 329,904
(3) Actual Contributions 2,124,575 0 28,231,800 783,130
(4) Expected Interest On (1), (2), and (3) 57,745 (49,336) (124,896) (207,442)
(5) Expected Unfunded Actuarial Accrued Liability as of June
30, 2025: (1)+(2)-(3)+(4) (220,992) (734,558) (16,220,796) (3,486,946)
(6) Changes to UAAL Due to Assumptions, Methods and
Benefits 0 0 0 0
(7) Change to UAAL Due to Actuarial (Gain)/Loss (682,250) (115,324) 10,352,116 230,868
(8) Unfunded Actuarial Accrued Liability as of June 30, 2025 (903,242) (849,882) (5,868,680) (3,256,078)
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
17
AMORTIZATION OF UNFUNDED LIABILITIES - TIERS 1 & 2
Date Established Outstanding Balance Years Remaining Amortization Rate
PENSION 6/30/2019 0 11 0.00%
6/30/2021 874,759 11 1.28%
6/30/2022 (2,225,517) 12 (3.09%)
6/30/2023 5,320,644 13 7.02%
6/30/2024 (2,829,342) 14 (3.57%)
6/30/2025 (2,043,786) 15 (2.48%)
Total (903,242) (0.84%)
HEALTH 6/30/2019 0 10 0.00%
6/30/2021 0 10 0.00%
6/30/2022 0 10 0.00%
6/30/2023 0 10 0.00%
6/30/2024 0 10 0.00%
6/30/2025 (740,927) 10 (1.16%)
Total (740,927) (1.16%)
AMORTIZATION OF UNFUNDED LIABILITIES - TIER 3
Date Established Outstanding Balance Years Remaining Amortization Rate 1
PENSION 6/30/2018 73,371 3 0.01%
6/30/2019 (738,175) 4 (0.06%)
6/30/2020 538,283 5 0.03%
6/30/2021 (1,923,660) 6 (0.10%)
6/30/2022 (3,334,717) 7 (0.16%)
6/30/2023 (1,260,287) 8 (0.05%)
6/30/2024 (5,258,441) 9 (0.21%)
6/30/2025 6,034,946 10 0.22%
Total (5,868,680) 0.00%
HEALTH 6/30/2018 (1,556) 3 0.00%
6/30/2019 (67,490) 4 (0.01%)
6/30/2020 (136,697) 5 (0.01%)
6/30/2021 (277,936) 6 (0.01%)
6/30/2022 (396,707) 7 (0.02%)
6/30/2023 (639,631) 8 (0.03%)
6/30/2024 (1,050,040) 9 (0.04%)
6/30/2025 (686,021) 10 (0.02%)
Total (3,256,078) 0.00%
1 By Statute, negative total amortization rates are not subtracted in Tier 3 rate calculations.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
18
ASSET SUPPORT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR YEAR ENDED JUNE 30, 2025
Tiers 1 & 2 Tier 3
Pension Health Pension Health
ADDITIONS Contributions
Member Contributions $ 108,640,873 $ 0 $ 61,005,633 $ 0
Employer Contributions 1,069,823,308 0 59,252,766 0
Health Insurance Contributions 0 4,098,668 0 1,553,978
Total Contributions 1,178,464,181 4,098,668 120,258,399 1,553,978
Investment Income Net Increase in Fair Value 1,390,120,909 34,877,805 45,105,036 1,105,501
Interest and Dividends 259,062,270 6,499,811 8,405,753 206,021
Other Income 150,210,467 3,767,860 4,873,856 119,427
Less Investment Expenses (35,364,426) (728,394) (1,147,464) (23,087)
Net Investment Income 1,764,029,220 44,417,082 57,237,181 1,407,862
Non-investment Income 0 0 0 0
Transfers In 288,360 0 206,733 0
Total Additions 2,942,781,761 48,515,750 177,702,313 2,961,840
DEDUCTIONS
Distributions to Members Benefit Payments 1,218,594,305 0 852,434 0
Health Insurance Subsidy 0 18,660,709 0 6,480
Refund of Contributions 12,178,168 0 2,803,612 0
Total Distributions 1,230,772,473 18,660,709 3,656,046 6,480
Administrative Expenses 7,838,369 201,658 254,475 6,392
Transfers Out 67,338 0 0 0
Other 0 0 0 0
Total Deductions 1,238,678,180 18,862,367 3,910,521 12,872
NET INCREASE / (DECREASE) 1,704,103,581 29,653,383
173,791,792 2,948,968
NET POSITION HELD IN TRUST
Prior Valuation 15,933,751,686 411,840,936 398,698,171 11,044,818
Beginning of the Year Adjustment 0 0 0 0
End of the Year 17,637,855,267 441,494,319 572,489,963 13,993,786
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
19
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 87,257,612 87,257,612 87,257,612 87,257,612 87,257,612 87,257,612 87,257,610
2024 Experience 62,439,795 62,439,795 62,439,795 62,439,795 62,439,795 62,439,792
2023 Experience 10,197,720 10,197,720 10,197,720 10,197,720 10,197,717
2022 Experience (204,451,249) (204,451,249) (204,451,249) (204,451,249)
2021 Experience 238,978,744 238,978,744 238,978,745
2020 Experience (68,882,158) (68,882,160)
2019 Experience (22,859,275)
Total Amortization 102,681,189 125,540,462 194,422,623 (44,556,122) 159,895,124 149,697,404 87,257,610
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 7.9%
A. Investment Income
A1. Actual Investment Income $ 1,756,190,851
A2. Expected Amount for Immediate Recognition 1,145,387,569
A3. Amount Subject to Amortization 610,803,282
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 15,769,616,678
C2. Non-investment Net Cash Flow (52,087,270)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 16,965,598,166
C4. Market Value of Assets, June 30, 2025 17,637,855,267 94,785,694
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 16,965,598,166 91,172,990
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
20
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 2,154,000 2,154,000 2,154,000 2,154,000 2,154,000 2,154,000 2,153,999
2024 Experience 1,556,610 1,556,610 1,556,610 1,556,610 1,556,610 1,556,608
2023 Experience 193,035 193,035 193,035 193,035 193,036
2022 Experience (6,416,469) (6,416,469) (6,416,469) (6,416,471)
2021 Experience 9,257,478 9,257,478 9,257,481
2020 Experience (2,898,713) (2,898,716)
2019 Experience (1,075,572)
Total Amortization 2,770,369 3,845,938 6,744,657 (2,512,826) 3,903,646 3,710,608 2,153,999
D. Rates of Return
D1. Market Value Rate of Return 10.9%
D2. Actuarial Value Rate of Return 8.0%
A. Investment Income
A1. Actual Investment Income $ 44,215,424
A2. Expected Amount for Immediate Recognition 29,137,425
A3. Amount Subject to Amortization 15,077,999
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 406,302,544
C2. Non-investment Net Cash Flow (14,562,041)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 423,648,297
C4. Market Value of Assets, June 30, 2025 441,494,319 1,971,472
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 423,648,297 1,891,781
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
21
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 3
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029
2025 Experience (A3 / 5) 5,010,932 5,010,932 5,010,932 5,010,932 5,010,934
2024 Experience 3,027,823 3,027,823 3,027,823 3,027,823
2023 Experience 885,521 885,521 885,520
2022 Experience (3,259,379) (3,259,381)
2021 Experience 3,551,938
Total Amortization 9,216,835 5,664,895 8,924,275 8,038,755 5,010,934
D. Rates of Return
D1. Market Value Rate of Return 12.5%
D2. Actuarial Value Rate of Return 9.2%
A. Investment Income
A1. Actual Investment Income $ 56,982,706
A2. Expected Amount for Immediate Recognition 31,928,044
A3. Amount Subject to Amortization 25,054,662
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 386,897,139
C2. Non-investment Net Cash Flow 116,809,086
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 544,851,104
C4. Market Value of Assets, June 30, 2025 572,489,963 266,158,721
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 544,851,104 253,309,023
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
22
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 3
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029
2025 Experience (A3 / 5) 115,017 115,017 115,017 115,017 115,018
2024 Experience 84,292 84,292 84,292 84,290
2023 Experience 23,872 23,872 23,870
2022 Experience (101,792) (101,790)
2021 Experience 128,961
Total Amortization 250,350 121,391 223,179 199,307 115,018
D. Rates of Return
D1. Market Value Rate of Return 11.9%
D2. Actuarial Value Rate of Return 9.4%
A. Investment Income
A1. Actual Investment Income $ 1,401,470
A2. Expected Amount for Immediate Recognition 826,384
A3. Amount Subject to Amortization 575,086
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 10,710,659
C2. Non-investment Net Cash Flow 1,547,498
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 13,334,891
C4. Market Value of Assets, June 30, 2025 13,993,786 6,893,472
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 13,334,891 6,568,894
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
23
MEMBER STATISTICS
STATISTICAL DATA – ACTIVE MEMBERS
June 30, 2025 June 30, 2024
Tiers 1 & 2 Tier 3 Tiers 1 & 2 Tier 3
ACTIVES
Number 38 35 46 29
Average Current Age 42.7 29.2 42.0 28.3
Average Age at Employment 26.5 26.3 26.2 25.9
Average Past Service 16.2 2.9 15.8 2.4
Average Annual Salary $106,438 $71,511 $107,180 $71,169
ACTIVES (TRANSFERRED)
Number 9 8 8 6
Average Current Age 37.8 29.5 37.6 28.6
Average Age at Employment 25.1 25.7 25.5 25.5
Average Past Service 12.6 3.8 12.2 3.1
Average Annual Salary $93,208 $75,237 $90,578 $74,123
Total Number (Active) 47 43 54 35
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
24
STATISTICAL DATA – INACTIVE MEMBERS
June 30, 2025 June 30, 2024
Tiers 1 & 2 Tier 3 Tiers 1 & 2 Tier 3
RETIREES
Number 49 1 42 0
Average Current Age 59.1 0.6 59.3 N/A
Average Annual Benefit $58,756 $110 $57,763 N/A
DROP RETIREES
Number 11 N/A 12 N/A
Average Current Age 52.0 N/A 53.8 N/A
Average Annual Benefit $63,695 N/A $65,115 N/A
BENEFICIARIES
Number 7 0 7 0
Average Current Age 71.5 N/A 70.5 N/A
Average Annual Benefit $36,891 N/A $36,168 N/A
DISABILITY RETIREES
Number 12 0 12 0
Average Current Age 57.5 N/A 56.5 N/A
Average Annual Benefit $43,100 N/A $42,255 N/A
INACTIVE / VESTED
Number 8 3 9 3
Average Current Age 49.6 33.2 47.4 32.2
Average Accumulated
Contributions $37,771 $13,986 $38,305 $13,517
TOTAL NUMBER (INACTIVE) 87 4 82 3
FORMER MEMBERS (TRANSFERRED) 7 6 6 6
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
25
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIERS 1 & 2
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<20 0 0 0 0 0 0 0 0 0 0
20 - 24 0 0 0 0 0 0 0 0 0 0
25 - 29 0 0 0 0 0 0 0 0 0 0
30 - 34 0 4 5 0 0 0 0 9 905,591 100,621
35 - 39 0 1 10 3 0 0 0 14 1,517,244 108,375
40 - 44 0 0 2 7 2 0 0 11 1,198,641 108,967
45 - 49 0 0 1 3 4 0 0 8 839,622 104,953
50 - 54 0 0 0 1 0 0 0 1 98,849 98,849
55 - 59 0 0 0 1 1 0 0 2 209,546 104,773
60 - 64 0 0 0 1 0 0 1 2 114,037 57,019
65+ 0 0 0 0 0 0 0 0 0 0
Total 0 5 18 16 7 0 1 47 4,883,530 103,905
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
26
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIER 3
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<20 0 0 0 0 0 0 0 0 0 0
20 - 24 3 0 0 0 0 0 0 3 188,112 62,704
25 - 29 21 2 0 0 0 0 0 23 1,636,652 71,159
30 - 34 10 3 0 0 0 0 0 13 941,195 72,400
35 - 39 1 3 0 0 0 0 0 4 338,839 84,710
40 - 44 0 0 0 0 0 0 0 0 0 0
45 - 49 0 0 0 0 0 0 0 0 0 0
50 - 54 0 0 0 0 0 0 0 0 0 0
55 - 59 0 0 0 0 0 0 0 0 0 0
60 - 64 0 0 0 0 0 0 0 0 0 0
65+ 0 0 0 0 0 0 0 0 0 0
Total 35 8 0 0 0 0 0 43 3,104,798 72,205
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
27
AGE DISTRIBUTIONS – INACTIVE MEMBERS
Retirees, Disableds and
Beneficiaries
Age Count
Average Annual
Pensions
<40 1 110
40-45 0 0
45-49 12 50,861
50-54 13 52,961
55-59 17 56,574
60-64 6 52,897
65-69 7 66,129
70-74 7 44,294
75-79 3 47,792
80-84 3 53,393
85-89 0 0
90-94 0 0
95-99 0 0
100+ 0 0
Total 69 52,965
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
28
ACTUARIAL ASSUMPTIONS AND METHODS
Interest Rate This is the assumed earnings rate on System assets, compounded
annually, net of investment and administrative expenses.
Tiers 1 & 2: 7.20% per year.
Tier 3: 7.00% per year.
Mortality Rate Active Lives:
PubS-2010 Employee mortality, adjusted by a factor of 1.03 for male
members and 1.08 for female members, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021). 100% of active deaths are assumed to be
in the line of duty.
Inactive Lives:
PubS-2010 Healthy Retiree mortality, adjusted by a factor of 1.03
for male retirees and 1.11 for female retirees, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021).
Beneficiaries:
PubS-2010 Survivor mortality, adjusted by a factor of 0.98 for male
beneficiaries and adjusted by a factor of 1.06 for female
beneficiaries, with generational improvements using 85% of the
most recent projection scale (currently Scale MP-2021).
Disabled Lives:
PubS-2010 Disabled mortality, adjusted by a factor of 1.08 for male
disabled members and 1.01 for female disabled members, with
generational improvements using 85% of the most recent projection
scale (currently Scale MP-2021).
The mortality assumptions sufficiently accommodate anticipated
future mortality improvements.
Retirement / DROP Rates These rates are used to project future decrements from the active
population due to retirement. The rates below are based on a 2022
experience study using actual plan experience.
Tier 1 – reaching age 62 before attaining 20 years of service:
Age-related rates based on age at retirement:
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
29
Police - 40% assumed at age 62 and 63, 35% assumed at age 64,
25% assumed at ages 65 and 66, 50% assumed at ages 67 – 69, and
100% assumed at age 70.
Fire - 25% assumed at age 62 and 63, 35% assumed at age 64, 25%
assumed at ages 65 and 66, 50% assumed at ages 67 – 69, and 100%
assumed at age 70.
Tier 1 – reaching age 62 after attaining 20 years of service:
Service-related rates based on service at retirement. See complete
tables at the end of this section.
65% are assumed to enter the DROP program while the remaining
35% are assumed to retire and commence benefits immediately.
DROP periods are assumed to be 5 years in length for future DROP
elections.
Tiers 2 & 3:
Age-related rates based on age at retirement. 50% assumed at age
53, 30% assumed at ages 54 – 59, 60% assumed at ages 60 – 63, and
100% assumed at age 64.
Disability Rate These rates are used to project future decrements from the active
population due to disability. Complete table of rates based on age
at disability are provided at the end of this section. These rates are
based on a 2022 experience study using actual plan experience.
90% of disablements are assumed to be duty-related.
Termination Rate These rates are used to project future decrements from the active
population due to termination. Complete table of rates based on
service at termination are provided at the end of this section. The
rates apply to members prior to retirement eligibility and are based
on a 2022 experience study using actual plan experience.
Inflation 2.50%.
Tier 3 Compensation Limit $140,952 for calendar 2024. Assumed increases of 2.00% per year
thereafter.
Cost-of-Living Adjustment 1.85%.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
30
Salary Increases See table at the end of this section. This is an annual increase for
individual member’s salary. These rates are based on a 2022
experience study using actual plan experience.
Marital Status For active members, 85% of males and 60% of females are assumed to be
married. Actual marital status is used, where applicable, for inactive
members.
Spouse’s Age Males are assumed to be three years older than females.
Benefit Commencement Deferred members are assumed to commence benefits as follows:
Tier 1: immediate refund of contributions
Tiers 2 & 3 (less than 15 years service): immediate refund of
contributions
Tier 2 (15+ years service): life annuity payable at age 52.5
Tier 3 (15+ years service): life annuity payable at age 55
Health Care Utilization For active members, 70% of retirees are expected to utilize retiree
health care. Actual utilization is used for inactive members.
Funding Method Entry Age Normal Cost Method.
Lateral Transfers When active members transfer between employers, the new
employer’s liability starts from their new date of hire with no past
service liability (i.e., all liability is accrued through normal cost). Per
PSPRS administrative decision, once the new employer’s liability is
fully funded, the liability will reflect all past service liability.
Actuarial Asset Method Each year the assumed investment income is recognized in full while
the difference between actual and assumed investment income are
smoothed over a fixed period (7 years for Tiers 1 & 2; 5 years for
Tier 3). Actuarial Assets shall not be less than 80% nor greater than
120% of the Market Value of Assets. Note that during periods when
investment performance exceeds (falls short) of the assumed rate,
the actuarial value of assets will tend to be less (greater) than the
market value of assets.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
31
Amortization Method See Funding Policy for complete details. In short:
Tiers 1 & 2:
Any positive UAAL (assets less than funding policy targets) is
amortized using a layered approach according to a Level
Dollar method over a closed period of 15 years (phased into
from current period).
Any negative UAAL (assets greater than funding policy
targets) is amortized according to a Level Dollar method
over an open period of 10 years.
Tier 3:
Any positive UAAL (assets less than liabilities) is amortized
according to a Level Dollar method over a closed period of
10 years.
No amortization is made of any negative UAAL (assets
greater than liabilities).
Payroll Growth 1.50% per year. This is the annual increase expected on total
employer payroll.
CHANGES SINCE THE PRIOR VALUATION
The payroll growth assumption was lowered from 2.00% to 1.50%.
There were no method changes since the prior valuation.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
32
SALARY INCREASE RATES
Age
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 15.00% 12.00% 14.00% 15.00% 12.00% 13.00%
21 14.00% 6.00% 12.00% 14.00% 11.00% 12.00%
22 13.00% 6.00% 10.00% 13.00% 10.00% 11.00%
23 12.00% 6.00% 9.00% 12.00% 9.50% 10.00%
24 11.00% 6.00% 8.00% 11.00% 9.00% 9.00%
25 10.00% 6.00% 7.00% 10.00% 8.50% 8.00%
26 9.00% 5.50% 6.50% 9.50% 7.50% 7.50%
27 8.00% 5.50% 6.25% 9.00% 6.50% 7.50%
28 7.50% 5.50% 6.00% 8.50% 5.75% 7.00%
29 7.00% 5.50% 5.80% 8.00% 5.75% 6.50%
30 6.50% 5.25% 5.60% 8.00% 5.50% 6.50%
31 6.00% 5.25% 5.40% 7.50% 5.50% 6.00%
32 5.50% 5.00% 5.20% 7.00% 5.00% 5.50%
33 5.10% 5.00% 5.00% 6.50% 5.00% 5.50%
34 4.90% 5.00% 4.90% 6.50% 5.00% 5.50%
35 4.70% 4.50% 4.80% 6.00% 5.00% 5.50%
36 4.50% 4.50% 4.70% 5.50% 5.00% 5.50%
37 4.30% 4.50% 4.60% 5.25% 4.50% 5.00%
38 4.10% 4.00% 4.50% 5.00% 4.50% 5.00%
39 4.00% 4.00% 4.40% 4.75% 4.50% 5.00%
40 3.90% 4.00% 4.30% 4.75% 4.50% 5.00%
41 3.80% 3.80% 4.20% 4.50% 4.50% 4.50%
42 3.70% 3.60% 4.10% 4.50% 4.00% 4.50%
43 3.60% 3.40% 4.00% 4.50% 4.00% 4.50%
44 3.50% 3.20% 3.90% 4.50% 4.00% 4.00%
45 3.50% 3.00% 3.80% 4.25% 4.00% 4.00%
46 3.50% 3.00% 3.70% 4.25% 3.75% 4.00%
47 3.50% 3.00% 3.60% 4.25% 3.75% 3.75%
48 3.50% 3.00% 3.50% 4.00% 3.75% 3.75%
49 3.50% 3.00% 3.50% 4.00% 3.50% 3.75%
50 3.25% 3.00% 3.50% 3.75% 3.50% 3.75%
51 3.25% 3.00% 3.50% 3.75% 3.50% 3.75%
52 3.25% 2.75% 3.50% 3.75% 3.50% 3.75%
53+ 3.25% 2.75% 3.50% 3.75% 3.25% 3.75%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
33
Service
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
0 13.0% 14.0% 13.5% 4.5% 10.0% 10.5%
1 8.0% 9.0% 11.5% 3.5% 6.0% 8.5%
2 6.0% 7.5% 10.5% 2.5% 4.5% 8.0%
3 4.5% 7.0% 9.5% 2.0% 4.0% 8.0%
4 3.6% 6.5% 9.0% 1.5% 4.0% 7.0%
5 3.3% 5.0% 8.0% 1.5% 4.0% 5.0%
6 3.3% 5.0% 7.0% 1.5% 4.0% 5.0%
7 3.3% 4.0% 6.5% 1.5% 3.0% 4.0%
8 2.4% 4.0% 6.5% 1.5% 3.0% 4.0%
9 2.4% 4.0% 6.0% 1.5% 3.0% 3.5%
10 2.4% 4.0% 5.0% 1.0% 2.0% 3.0%
11 1.8% 3.0% 4.0% 1.0% 2.0% 2.5%
12 1.8% 3.0% 4.0% 1.0% 1.5% 2.0%
13 1.3% 2.0% 3.5% 1.0% 1.0% 1.5%
14 1.3% 2.0% 3.0% 0.5% 1.0% 1.4%
15 0.8% 1.5% 2.5% 0.5% 1.0% 1.4%
16 0.8% 1.5% 2.0% 0.5% 0.5% 1.4%
17 0.8% 1.0% 2.0% 0.5% 0.5% 1.4%
18 0.8% 1.0% 1.8% 0.5% 0.5% 1.4%
19 0.8% 1.0% 1.8% 0.5% 0.5% 0.5%
20+ 0.5% 1.0% 1.8% 0.4% 0.5% 0.5%
TIER 1 RETIREMENT RATES– REACHING AGE 62 AFTER ATTAINING 20 YEARS OF SERVICE
TERMINATION RATES
Service
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 28% 28% 35% 14% 20% 20%
21 25% 25% 35% 17% 20% 25%
22 15% 16% 22% 7% 13% 15%
23 12% 12% 12% 7% 7% 10%
24 8% 9% 12% 7% 7% 10%
25 30% 22% 25% 17% 22% 30%
26 42% 42% 40% 30% 26% 30%
27 32% 30% 28% 23% 30% 30%
28 32% 30% 28% 30% 30% 30%
29 32% 20% 28% 30% 30% 30%
30 35% 25% 35% 30% 30% 35%
31 35% 33% 30% 40% 30% 35%
32 60% 50% 70% 55% 30% 35%
33 60% 50% 70% 55% 60% 60%
34+ 100% 100% 100% 100% 100% 100%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
34
DISABILITY RATES
Age
Maricopa
Police
Pima
Police
Other
Police
Maricopa
Fire
Pima
Fire
Other
Fire
20 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
21 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
22 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
23 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
24 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
25 0.050% 0.050% 0.120% 0.020% 0.020% 0.020%
26 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
27 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
28 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
29 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
30 0.100% 0.100% 0.160% 0.035% 0.020% 0.020%
31 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
32 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
33 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
34 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
35 0.230% 0.180% 0.240% 0.090% 0.100% 0.060%
36 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
37 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
38 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
39 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
40 0.450% 0.350% 0.320% 0.150% 0.150% 0.140%
41 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
42 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
43 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
44 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
45 0.520% 0.650% 0.550% 0.170% 0.300% 0.250%
46 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
47 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
48 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
49 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
50 0.650% 0.750% 0.750% 0.300% 0.420% 0.420%
51 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
52 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
53 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
54 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
55 0.800% 0.800% 0.800% 0.700% 0.750% 0.750%
56+ 1.000% 0.850% 0.900% 1.100% 0.800% 1.000%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
35
PLAN PROVISIONS
The following is a summary of the benefit provisions provided in Title 38, Chapter 5, Article 4 of the
Arizona Revised Statutes.
Membership Full-time employees of an eligible group, prior to attaining age 65,
who are engaged to work for more than six months in a calendar
year. Tier 3 Defined Contribution members are able to elect
participation in post-retirement health insurance subsidy.
Benefit Tiers Benefits differ for members based on their hire date:
Tier 1: Hired before January 1, 2012
Tier 2: Hired on or after January 1, 2012 but before July 1, 2017
Tier 3: Hired on or after July 1, 2017
Compensation Compensation is the amount including base salary, overtime pay, shift
and military differential pay, compensatory time used in lieu of
overtime pay, and holiday pay, paid to an employee on a regular
payroll basis and longevity pay paid at least every six months for which
contributions are made to the System. For Tier 3 members,
compensation is limited by statutory cap ($110,000 with adjustments
by the Board).
Average Monthly Benefit Tier 1: The highest compensation paid to member during three
Compensation consecutive years out of the last 20 years of Credited Service, divided
by months.
Tier 2: The highest compensation paid to member during five
consecutive years out of the last 20 years of Credited Service, divided
by months.
Tier 3: The highest compensation paid to member during five
consecutive years out of the last 15 years of Credited Service, divided
by months.
Credited Service Total periods of service, both before and after the member’s date of
participation, for which the member made contributions to the fund.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
36
Normal Retirement
Date Tier 1: First day of month following attainment of 1) 20 years of service
or 2) 62nd birthday and completion of 15 years of service.
Tier 2: First day of month following the attainment of age 52.5 and
completion of 15 years of service.
Tier 3: First day of month following the attainment of age 55 and
completion of 15 years of service.
Benefit Tier 1: 50% of Average Monthly Benefit Compensation, adjusted
based on Credited Service as follows (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Adjustment
15 years, but less than 20 Reduced 4% per year less than 20
20 years, but less than 25 Plus 2% per year between 20 and 25
25+ years Plus 2.5% per year above 20
Tier 2: Benefit multiplier (below) times Average Monthly Benefit
Compensation times Credited Service (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Multiplier
15 years, but less than 17 1.50%
17 years, but less than 19 1.75%
19 years, but less than 22 2.00%
22 years, but less than 25 2.25%
25+ years 2.50%
Tier 3: Benefit multiplier (below) times Average Monthly Benefit
Compensation times Credited Service (maximum benefit of 80% of
Average Monthly Benefit Compensation):
Credited Service Benefit Multiplier
15 years, but less than 17 1.50%
17 years, but less than 19 1.75%
19 years, but less than 22 2.00%
22 years, but less than 25 2.25%
25+ years 2.50%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
37
Form of Benefit For married retirees, an annuity payable for the life of the member
with 80% continuing to the eligible spouse upon death. For
unmarried retirees, the normal form is a single life annuity.
Early Retirement Only applicable to Tier 3 members
Date Attainment of age 52.5 and 15 years of Credited Service.
Benefit Actuarial equivalent of Normal Retirement benefit.
Form of Benefit Same as Normal Retirement
Disability Benefit – Accidental (duty-related)
Eligibility Total and permanent disability incurred in performance of duty.
Benefit Amount A maximum of:
a.) 50% of Average Monthly Benefit Compensation, and;
b.) The monthly retirement pension that the Member is
entitled to receive if he or she retired immediately.
Disability Benefit – Ordinary (not duty-related)
Eligibility Total and permanent disability not incurred in performance of duty.
Benefit Amount Normal Retirement pension that the member is entitled to receive,
prorated based on Credited Service earned over the required Credited
Service for Normal Retirement (maximum ratio of 1).
Disability Benefit – Other
Temporary Benefit equals 1/12 of 50% of compensation during year preceding
date of disability. Payments terminate after 12 months.
Catastrophic Benefit equals 90% of Average Monthly Benefit Compensation. After
60 months member receives greater of 62.5% Average Monthly
Benefit Compensation and accrued normal pension.
Pre-Retirement Death Benefit Payable following death of active member
Service Incurred 100% of Average Monthly Benefit Compensation, reduced by child’s
pension.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
38
Non-Service Incurred 80% of benefit based on calculation for accidental disability
retirement.
Child’s Pension 10% of pension for each child (maximum 20% paid) based on
calculation for accidental disability retirement. Payable to dependent
child under age 18 (23 if full-time student).
Guardian’s Pension Same as spouse’s pension. Payable (along with child’s pension) when
no spouse is being paid and there is at least one child under 18 (23, if
full-time student).
Accumulated Contributions Any contributions remaining upon the death of the last beneficiary
shall be paid as a lump sum.
Vesting (Termination)
Vesting Service Requirement Tier 1: 10 years.
Tiers 2 & 3: 15 years.
Non-Vested Benefit Tier 1: Lump sum payment of accumulated contributions, plus
additional amount based on years of Credited Service.
Service Additional % of Contributions
Less than 5 years 0%
5 years 25%
6 years 40%
7 years 55%
8 years 70%
9 years 85%
10+ years 100%
Tiers 2 & 3: Lump sum payment of accumulated contributions, with
interest at rate determined by the Board.
Vested Benefit Tier 1: Deferred retirement annuity based on two times member’s
accumulated contributions, deferred to age 62. Member is not
entitled to survivor benefits, benefit increases, or group health
insurance subsidy.
Tiers 2 & 3: Calculated same as normal retirement pension. Payable
if contributions left in fund until reach age requirement. Member is
entitled to survivor benefits, benefit increases, and group health
insurance subsidy.
Cost-of-Living Adjustment Payable to retired member or survivor of retired member
Tiers 1 & 2: Compound cost-of-living adjustment on base benefit. First
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
39
payment is made on July 1, 2018, with annual adjustments effective
every July 1 thereafter. Adjustment does not apply while in DROP.
Cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. Maximum increase of 2%.
Tier 3: Compound cost-of-living adjustment on base benefit beginning
earlier of first calendar year after the 7th anniversary of retirement or
when the retired member reaches 60 years of age.
A cost-of-living adjustment shall be paid on July 1 each year that the
funded ratio for members hired on or after July 1, 2017 is 70% or more.
The cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. The cost-of-living adjustment will not exceed:
2%, if funded ratio for members who are hired on or after July
1, 2017 is 90% or more;
1.5%, if funded ratio for members who are hired on or after
July 1, 2017 is 80-90%;
1%, if funded ratio for members who are hired on or after July
1, 2017 is 70-80%.
Deferred Retirement Option Plan (DROP)
Eligibility Tier 1 and 20 years of Credited Service.
DROP Period Maximum 84 months.
Member Contributions Cease upon DROP entry.
Benefit Amount Calculated based on Credited Service and average monthly
compensation as of the beginning of the DROP period, credited to
DROP participation account for DROP period.
Interest on DROP Beginning Year Interest Rate
Participation Account July 1, 2016 7.40%
July 1, 2018 7.30%
July 1, 2022 7.20%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
40
Payment of DROP Payable as lump sum distribution to Public Safety Personnel
Participation Account Defined Contribution Retirement Plan at earlier of 1) end of DROP
period, 2) at termination, or 3) five years.
Payment Monthly Benefit System commences payment of benefit amount at the earlier of 1)
the end of the DROP period and 2) at termination
Post-Retirement Health Insurance Subsidy
Eligibility Retired member or survivor who elect health coverage provided by
the state or participating employer.
Maximum Subsidy Amounts (monthly) Member Only With Dependents
Medicare Eligible $100 $170
One w/ Medicare N/A $215
Not Medicare Eligible $150 $260
Contributions
Employee Tiers 1 & 2: 7.65% (effective July 1, 2023).
Tier 3: 50% of total contribution, which is Normal Cost plus a level-
dollar amortization of unfunded actuarial accrued liability over a
closed period not to exceed 10 years.
Employer Tiers 1 & 2: Normal Cost plus amortization of unfunded actuarial
accrued liability over a closed period not to exceed 20 years (subject
to one-time election to extend to closed period not to exceed 30
years).
Tier 3: 50% of total contribution, which is Normal Cost plus a level-
dollar amortization of unfunded actuarial accrued liability over a
closed period not to exceed 10 years.
CHANGES SINCE THE PRIOR VALUATION
None.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
41
ACTUARIAL FUNDING POLICY
A pension plan funding policy describes how pension funding will improve for underfunded plans or maintain
funded benefits for funded plans over time for those benefits defined in Arizona Revised Statutes (ARS). Those
benefits defined in ARS are to be equitably managed and administered by the Arizona Public Safety Personnel
Retirement System (PSPRS agency).
This Actuarial Funding Policy identifies the funding objectives and elements of the actuarial funding policy set
by the Board for the PSPRS agency. The Board adopted this Funding Policy to help ensure the systematic
funding of future benefit payments for members of the retirement systems as established by the legislature.
This policy covers all retirements systems administered by the Board: The Public Safety Personnel Retirement
System (PSPRS); the Correction Officers Retirement Plan (CORP); and the Elected Officials Retirement Plan
(EORP).
To achieve the systematic funding of future benefits, metrics are identified to measure the progress, or the
lack of progress, over time to identify trends. These trends inform the continuation of the current policies or
identify areas of needed research for consideration.
This funding policy is reviewed annually and adopted by the Board in accordance with ARS 38-863.02. This
policy was reviewed and adopted by the Board in September 2025.
PSPRS STATEMENT OF PURPOSE
The Purpose of the Public Safety Personnel Retirement System is to provide uniform, consistent, and equitable
statewide retirement programs for those who have been entrusted to our care.
FUNDING OBJECTIVES
1. Maintain adequate assets so that current plan assets, plus future contributions and investment earnings,
are sufficient to fund all benefits expected to be paid to members and their beneficiaries.
a. Corollary 1a: Current and future contributions should be calculated based upon assumptions that
reflect the Board’s best estimate of future experience and methods that appropriately allocate
costs to address generational equity.
b. Corollary 1b: While the shorter-term objective is to fully fund the Actuarial Accrued Liability (AAL)
that estimates benefits earned as of the valuation date, contributions should target the long-term
Present Value of Benefits (PVB) to fund all benefits and help offset risks.
c. As closed plans mature, the target funding should be 110% of AAL or 100% of PVB, whichever is
greater.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
42
2. Maintain public policy goals of accountability and transparency through stakeholder communication and
education. Each policy element is clear in intent and effect, and each should be considered in a balanced
approach to determine how and when the funding requirements of the plan will be met.
a. Corollary 2a: Board shall provide stakeholders with separate reports and tools to help explain
current results as well as to help model future funding requirements.
3. Promote intergenerational equity. Defined benefit pensions are designed with a long-term perspective
and designed to minimize contribution volatility that cannot avoid some level of generational cost shift.
However, the goal is that each generation of members and employers (taxpayers) should, to the extent
possible, incur the cost of benefits for the employees who provide services to them, rather than shifting
those costs to other generations of members and employers (taxpayers).
a. Corollary 3a: A systematic reduction of the Unfunded Actuarial Accrued Liability (UAAL) over a
reasonable time period is paramount to achieving this objective.
Consideration can be given to reduce volatility, to the extent possible, of employer and employee contribution
rates as long as the integrity of the objectives listed above is not compromised.
ELEMENTS OF ACTUARIAL FUNDING POLICY
1. Actuarial Cost Method
a. The Entry Age Normal level percent of pay actuarial cost method of valuation shall be used in
determining the AAL and Normal Cost. Differences in the past between assumed experience and
actual experience (“actuarial gains and losses”) shall become part of the AAL. The Normal Cost
shall be determined on an individual basis for each active member.
2. Asset Smoothing Method
a. The investment gains or losses of each valuation period, resulting from the difference between
the actual investment return and assumed investment return, shall be recognized annually in level
amounts over five years (Tier 3) or seven years (Tiers 1 and 2) in calculating the Actuarial Value of
Assets (AVA).
b. The AVA so determined shall be subject to a 20% corridor relative to the Market Value of Assets
(MVA).
3. Amortization Method (Unfunded Amounts)
a. The AVA is subtracted from the computed AAL. Any unfunded amount is amortized as a level
percent of payroll over a closed period.
b. The unfunded liabilities, for EORP and Tiers 1 & 2 for both PSPRS and CORP, determined in the
6/30/2019 actuarial valuation will become the initial layer for each employer beginning with the
6/30/2020 actuarial valuation and amortized using the current closed year period for that
employer and continue to decrease each year.
i. The payroll growth rate assumption used to amortize the PSPRS Unfunded Liability will be
decreased by 0.75% each year with the intention of ultimately achieving 0.0%.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
43
ii. The payroll growth rate used to amortize the Correction Officers Retirement Plan (CORP)
Unfunded Liability will be reduced by 0.5% until 0.0% is reached.
iii. The payroll growth rate used to amortize the Elected Officials Retirement Plan (EORP)
Unfunded Liability will be 0.0%.
c. Gains and losses, for EORP and Tiers 1 & 2 for both PSPRS and CORP, for each employer beginning
with the 6/30/2020 actuarial valuation will be amortized as a new layer over the same
amortization period as the regular unfunded liability to a minimum of 15 years. Once the
amortization period for each employer decreases to 15 years, each subsequent year’s gains and
losses will be amortized as a new 15-year closed layer.
i. The payroll growth rate used to amortize the unfunded liability for all Plans under this
paragraph will be 0.0% (i.e. level-dollar amortization).
d. Tier 3 amortization methods are established in ARS 38-843.G and ARS 38-891.K.
4. Amortization Method (Overfunded Amounts)
a. The AVA is subtracted from the target funding level (greater of 110% of AAL or 100% of PVB). Any
overfunded amount is amortized as a level dollar amount over an open 10-year period.
5. Tier 3 Rate Calculation
a. Tier 3 is distinct from Tiers 1 & 2 in PSPRS and CORP as the contributions are a shared percentage
(50/50 split for PSPRS: for CORP, employer 1/3 and member 2/3 of the normal cost plus 50 percent
each, member and employer, of the UAAL amortization) for employers and members based on
the actuarially calculated rate. To reduce the impact of volatility to rates, the Tier 3 rates will be
smoothed over a 3-year rolling period based on the actuarially calculated rates for each year’s
actuarial valuation.
i. Beginning with the 6/30/2023 valuation, the prospective Tier 3 rates set by the Board of
Trustees are planned to be a rolling average of the actuarial calculated Tier 3 rates using
the 6/30/2023, 6/30/2022 and 6/30/2021 rates in the initial process.
ii. As assumptions may be updated year-to-year, the prior calculated rates are not updated
for those changes, the prior calculated rates are used to smooth in the new rates.
b. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board
committed to continue to monitor market conditions and directions with the intent to ultimately
adopt a single assumed rate of return for all investments for retirement systems/plans
administered by PSPRS agency.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
44
6. Assumed Rate of Return (ARR)
a. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board will
continue to monitor market conditions and directions with the intent to ultimately adopt a single
assumed rate of return for all investments for retirement systems/plans administered by PSPRS
agency.
7. EORP Floor Considerations
a. Establish a “floor” for EORP based on the immediately previous valuation by adjusting payroll
growth, amortization periods of the original layer or other possible options, to improve funding
in maintaining contribution levels opposed to reducing employer contributions.
METRICS TO MONITOR FUNDING OBJECTIVES
1. Appropriateness of Assumptions – Gain/Loss Experience (Corollary 1a)
a. Metric: Do the cumulative gain/loss layers over the prior five years exceed 8% of plan assets?
b. Measurement: History of annual gain/loss (split by asset and liability experience) and five-year
cumulative results will be tracked.
c. Action Plan: This metric assumes that a full experience study is performed at least every five years so
objective of measurement is to monitor interim experience. If the metric answer is yes, a review of
the sources or causes of gains and losses should be analyzed and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation are
intended to provide a basis for consideration if assumption changes are warranted between full
experience studies.
2. Funding Targets (Corollary 1b)
a. Metric: Has the funded status, on both an AAL and PVB basis when compared to the MVA, increased
over a five-year period?
b. Measurement: History of funded status measures will be tracked.
c. Action Plan: If the answer is no and not readily explainable (e.g., significant assumption change), a
review of the reason(s) for the decrease should be researched and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation
are intended to provide a basis for consideration if changes to assumptions and/or methods are
warranted between full experience studies.
3. Communication with Stakeholders (Corollary 2a)
a. Metric: Have reports and budgeting tools been provided to stakeholders in a timely fashion?
b. Measurement: Yes/No answer based on input from PSPRS administrator. (An annual standard survey
of stakeholders – 3 to 5 questions.)
c. Action Plan: If the answer is no, and periodically regardless (e.g., every three years), PSPRS staff will
revisit this metric to report to the Advisory Committee to provide a recommendation to the Board of
Trustees if current reports / tools are sufficient and if the delivery timing is appropriate.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
45
4. Timely Recognition of Costs (Corollary 3a)
a. Metric: Has the percentage of unfunded liability subject to negative amortization decreased over a
five-year lookback period?
b. Measurement: History of unfunded liability subject to negative amortization as a percentage of total
unfunded liability will be tracked.
c. Action Plan: If the answer is no, and not readily explainable (e.g., adopted assumption changes being
phased in are anticipated to address negative amortization), a review of the reason(s) for negative
amortization should be researched and presented to the Advisory Committee to provide a
recommendation to the Board of Trustees. The analysis and presentation are intended to provide a
basis for consideration if changes to assumptions and/or methods are warranted between full
experience studies.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
46
SUPPLEMENTARY INFORMATION
GLOSSARY
Accrued Benefit The benefit earned as of a specific date based on the provisions of
the plan and the member’s age, service, and salary as of that date.
Actuarial Accrued Liability The portion of the anticipated future benefits allocated to years
prior to the valuation date determined according to the plan’s
Actuarial Cost Method.
Actuarial Value of Assets The asset value used in the valuation to determine contribution
requirements. It represents the plan’s Market Value of Assets (see
below), with adjustments according to the plan’s Actuarial Asset
Method. These adjustments produce a “smoothed” value that is
likely to be less volatile from year to year than the Market Value of
Assets.
Actuarial Assumptions Assumptions regarding the occurrence of future events affecting
plan costs. These assumptions include rates of investment earnings,
changes in compensation, rates of mortality, withdrawal,
disablement, and retirement as well as statistics related to marriage
and family composition.
Actuarial Cost Method A method of determining the portion of the cost of a plan to be
allocated to each year; sometimes referred to as the "actuarial
funding method." Each cost method allocates a certain portion of
the actuarial present value of benefits between the Actuarial
Accrued Liability and future normal costs to ensure the plan is
adequately and systematically funded.
Actuarial Gain or Loss The change in Unfunded Actuarial Accrued Liability resulting from
experience different from Actuarial Assumptions. Gains decrease
the Unfunded Actuarial Accrued Liability and losses increase the
Unfunded Actuarial Accrued Liability.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
47
Actuarial Present Value The estimated amount of funds required as of a specified date to
provide a payment or series of payments in the future. It is
determined by discounting future payments at predetermined rates
of interest, and by probabilities of payments between the specified
date and the expected date of payment.
Amortization Payment The portion of the plan contribution designated to pay interest and
reduce the outstanding principal balance of Unfunded Actuarial
Accrued Liability. If the amortization payment is less than the
accrued interest on the Unfunded Actuarial Accrued Liability the
outstanding principal balance will increase.
Decrements Events which result in the termination of membership in the system
such as retirement, disability, withdrawal, or death.
Entry Age Normal Cost Method Under this method, the normal cost is the sum of the individual
normal costs for all active participants. For an active participant,
the normal cost is the participant’s normal cost accrual rate,
multiplied by the participant’s current compensation.
The normal cost accrual rate equals:
(i) the present value of future benefits for the participant,
determined as of the participant’s entry
age, divided by
(ii) the present value of the compensation expected to be paid to
the participant for each year of the participant’s anticipated future
service, determined as of the participant’s entry age.
In calculating the present value of future compensation, the salary
scale is applied both retrospectively and prospectively to estimate
compensation in years prior to and subsequent to the valuation
year based on the compensation used for the valuation.
The accrued liability is the sum of the individual accrued liabilities
for all participants and beneficiaries. A participant’s accrued liability
equals the present value, at the participant’s attained age, of future
benefits less the present value at the participant’s attained age of
the individual normal costs payable in the future. A beneficiary’s
accrued liability equals the present value, at the beneficiary’s
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
48
attained age, of future benefits. The unfunded accrued liability
equals the total accrued liability less the actuarial value of assets.
Under this method, the entry age used for each active participant is
the participant’s age at the time he or she would have commenced
participation if the plan had always been in existence under current
terms, or the age as of which he or she first earns service credits for
purposes of benefit accrual under the current terms of the plan.
Funded Ratio A measure of the ratio of the plan assets to liabilities of the system.
Typically, the assets used in the measure are the Actuarial Value of
Assets as determined by the asset valuation method. The Funded
Ratio depends not only on the financial strength of the plan but also
on the asset valuation method used to determine the assets and on
the Actuarial Cost Method used to determine the liabilities.
Interest Rate The assumed long-term rate of return on plan assets.
Market Value of Assets The fair market value of plan assets as of the valuation date.
Normal Cost The current year's cost for benefits yet to be funded. Under the
Entry Age Normal cost method, it is determined for each participant
as the present value of future benefits, determined as of the
Member’s entry age, amortized as a level percentage of
compensation over the anticipated number of years of
participation, determined as of the entry age.
Present Value of Benefits The single sum value on the valuation date of all future benefits to
be paid to current plan participants.
Projected Annual Payroll The projected annual rate of pay for the fiscal year following the
fiscal year beginning on the valuation date of all covered Members.
Projected Benefits The benefits expected to be paid in the future based on the
provisions of the plan and the Actuarial Assumptions. The projected
values are based on anticipated future advancement in age and
accrual of service as well as increases in salary paid to the
participant.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
49
Total Annual Payroll The projected annual rate of pay for the fiscal year beginning on the
valuation date of all covered Members.
Ultimate Cost The total cost to the plan once the last benefit has been paid. The
Ultimate Cost equals
Benefit Payments
Plus: Expenses
Less: Investment Income
The Ultimate Cost is independent of the Actuarial Cost Method
selected.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and the
Liability Actuarial Value of Assets. Under the Entry Age Normal Actuarial
Cost Method, an actuarial gain or loss, based on actual versus
expected UAAL, is determined in conjunction with each valuation
of the plan.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
50
DISCUSSION OF RISK
ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and
Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary’s
professional judgment, may reasonably be anticipated to significantly affect the plan’s future financial
condition.
Throughout this report, actuarial results are determined using various actuarial assumptions. These results
are based on the premise that all future plan experience will align with the plan’s actuarial assumptions;
however, there is no guarantee that actual plan experience will align with the plan’s assumptions. It is possible
that actual plan experience will differ from anticipated experience in an unfavorable manner that will
negatively impact the plan’s funded position.
Below are examples of ways in which plan experience can deviate from assumptions and the potential impact
of that deviation. Typically, this results in an actuarial gain or loss representing the current-year financial
impact on the plan’s unfunded liability of the experience differing from assumptions; this gain or loss is
amortized over a period of time determined by the plan’s amortization method. When assumptions are
selected that adequately reflect plan experience, gains and losses typically offset one another in the long term,
resulting in a relatively low impact on the plan’s contribution requirements associated with plan experience.
When assumptions are too optimistic, losses can accumulate over time and the plan’s amortization payment
could potentially grow to an unmanageable level.
Investment Return: When the rate of return on the Actuarial Value of Assets falls short of the
assumption, this produces a loss representing assumed investment earnings that were not realized.
Further, it is unlikely that the plan will experience a scenario that matches the assumed return in each
year as capital markets can be volatile from year to year. Therefore, contribution amounts can vary in
the future.
Salary Increases: When a plan participant experiences a salary increase that was greater than
assumed, this produces a loss representing the cost of an increase in anticipated plan benefits for the
participant as compared to the previous year. The total gain or loss associated with salary increases
for the plan is the sum of salary gains and losses for all active participants.
Payroll Growth: The plan’s payroll growth assumption, if one is used, causes a predictable annual
increase in the plan’s amortization payment in order to produce an amortization payment that
remains constant as a percentage of payroll if all assumptions are realized. If payroll increases less
than the plan’s payroll growth assumption, the plan’s amortization payment can increase significantly
as a percentage of payroll even if all assumptions other than the payroll growth assumption are
realized.
Demographic Assumptions: Actuarial results take into account various potential events that could
happen to a plan participant, such as retirement, termination, disability, and death. Each of these
potential events is assigned a liability based on the likelihood of the event and the financial
consequence of the event for the plan. Accordingly, actuarial liabilities reflect a blend of financial
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
51
consequences associated with various possible outcomes (such as retirement at one of various
possible ages). Once the outcome is known (e.g. the participant retires) the liability is adjusted to
reflect the known outcome. This adjustment produces a gain or loss depending on whether the
outcome was more or less favorable than other outcomes that could have occurred.
Contribution risk: This risk results from the potential that actual employer contributions may deviate
from actuarially determined contributions, which are determined in accordance with the Board’s
funding policy. The funding policy is intended to result in contribution requirements that if paid when
due, will result in a reasonable expectation that assets will accumulate to be sufficient to pay plan
benefits when due. Contribution deficits, particularly large deficits and those that occur repeatedly,
increase future contribution requirements and put the plan at risk for not being able to pay plan
benefits when due.
IMPACT OF PLAN MATURITY ON RISK
For newer pension plans, most of the participants and associated liabilities are related to active members who
have not yet reached retirement age. As pension plans continue in operation and active members reach
retirement ages, liabilities begin to shift from being primarily related to active members to being shared
amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred.
It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk
characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as
long of a time horizon to recover from losses (such as losses on investments due to lower than expected
investment returns) as plans where the majority of the liability is attributable to active members. For this
reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial
inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small
positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the
size of the fund is shrinking, which can result in less assets being available for investment in the market.
To assist with determining the maturity of the plan, we have provided some relevant metrics in the table
following titled “Plan Maturity Measures and Other Risk Metrics”. For a better understanding of the overall
Plan and the impact of these risks, please refer to the consolidated PSPRS valuation report.
LOW DEFAULT RISK OBLIGATION MEASURE
ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, was revised
as of December 2021 to include a “low-default-risk obligation measure” (LDROM). This liability measure is
consistent with the determination of the actuarial accrued liability shown on page 8 in terms of member data,
plan provisions, and assumptions/methods, including the use of the Entry Age Normal Cost Method, except
that the interest rate is tied to low-default-risk fixed income securities. The S&P Municipal Bond 20 Year High
Grade Rate Index (daily rate closest to, but not later than, the measurement date) was selected to represent
a current market rate of low risk but longer-term investments that could be included in a low-risk asset
portfolio. The interest rate used in this valuation was 4.81%, resulting in an LDROM of $125,012,506 for Tiers
1 and 2 and $496,952,639 for Tier 3. The LDROM should not be considered the “correct” liability
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
52
measurement; it simply shows a possible outcome if the Board elected to hold a very low risk asset portfolio.
The Board actually invests the pension plan’s contributions in a diversified portfolio of stocks and bonds and
other investments with the objective of maximizing investment returns at a reasonable level of risk.
Consequently, the difference between the plan’s Actuarial Accrued Liability disclosed earlier in this section
and the LDROM can be thought of as representing the expected taxpayer savings from investing in the plan’s
diversified portfolio compared to investing only in high quality bonds.
The actuarial valuation reports the funded status and develops contributions based on the expected return of
the plan’s investment portfolio. If instead, the plan switched to investing exclusively in high quality bonds, the
LDROM illustrates that reported funded status would be lower (which also implies that the Actuarially
Determined Contributions would be higher), perhaps significantly. Unnecessarily high contribution
requirements in the near term may not be affordable and could imperil plan sustainability and benefit security.
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
53
PLAN MATURITY MEASURES AND OTHER RISK METRICS – TIERS 1 & 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
SUPPORT RATIO
Total Actives 47 54 59 71 75
Total Inactives 87 82 79 67 64
Actives / Inactives 54.0% 65.9% 74.7% 106.0% 117.2%
ASSET VOLATILITY RATIO
Market Value of Assets (MVA) 94,785,694 87,451,926 79,847,757 75,900,900 51,161,889
Total Annual Payroll 4,883,530 5,654,920 6,036,925 6,042,533 6,174,801
MVA / Total Annual Payroll 1,940.9% 1,546.5% 1,322.7% 1,256.1% 828.6%
ACCRUED LIABILITY (AL) RATIO
Inactive Accrued Liability 66,116,339 60,222,648 57,674,718 46,880,574 41,295,836
Total Accrued Liability 90,269,748 87,755,942 85,636,864 76,438,334 70,792,554
Inactive AL / Total AL 73.2% 68.6% 67.3% 61.3% 58.3%
FUNDED RATIO
Actuarial Value of Assets (AVA) 91,172,990 86,551,076 81,319,622 77,967,201 46,773,089
Total Accrued Liability 90,269,748 87,755,942 85,636,864 76,438,334 70,792,554
AVA / Total Accrued Liability 101.0% 98.6% 95.0% 102.0% 66.1%
NET CASH FLOW RATIO
Net Cash Flow 1 (2,152,653) (484,773) (1,793,766) 27,917,489 1,738,938
Market Value of Assets (MVA) 94,785,694 87,451,926 79,847,757 75,900,900 51,161,889
Net Cash Flow / MVA (2.3%) (0.6%) (2.2%) 36.8% 3.4%
Arizona Public Safety Personnel Retirement System
Actuarial Valuation as of June 30, 2025 - Oro Valley Police Dept. (122)
54
PLAN MATURITY MEASURES AND OTHER RISK METRICS - TIER 3 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
2 Tier 3 results are shown for the Risk Sharing group, where applicable.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
SUPPORT RATIO
Total Actives 4,241 3,661 3,052 2,417 2,560
Total Inactives 728 570 450 327 307
Actives / Inactives 582.6% 642.3% 678.2% 739.1% 833.9%
ASSET VOLATILITY RATIO
Market Value of Assets (MVA) 266,158,721 184,210,874 119,338,352 74,774,123 51,992,240
Total Annual Payroll 367,097,197 295,480,312 226,680,964 165,151,543 115,883,115
MVA / Total Annual Payroll 72.5% 62.3% 52.6% 45.3% 44.9%
ACCRUED LIABILITY (AL) RATIO
Inactive Accrued Liability 21,448,721 16,792,236 9,349,377 4,598,114 2,290,610
Total Accrued Liability 247,440,343 165,671,690 110,961,191 68,939,204 42,733,537
Inactive AL / Total AL 8.7% 10.1% 8.4% 6.7% 5.4%
FUNDED RATIO
Actuarial Value of Assets (AVA) 253,309,023 178,758,433 119,101,476 76,171,857 45,863,401
Total Accrued Liability 247,440,343 165,671,690 110,961,191 68,939,204 42,733,537
AVA / Total Accrued Liability 102.4% 107.9% 107.3% 110.5% 107.3%
NET CASH FLOW RATIO
Net Cash Flow 1 55,470,509 47,922,185 36,208,171 25,802,686 18,607,209
Market Value of Assets (MVA) 266,158,721 184,210,874 119,338,352 74,774,123 51,992,240
Net Cash Flow / MVA 20.8% 26.0% 30.3% 34.5% 35.8%
Arizona Corrections Officer
Retirement Plan
Town Of Oro Valley - Dispatchers (556)
Actuarial Valuation
As of June 30, 2025
Contributions Applicable to the Plan/
Fiscal Year Ending June 30, 2027
13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · www.foster-foster.com
November 2025
Board of Trustees
Arizona Corrections Officer Retirement System
Re: Actuarial Valuation as of June 30, 2025 for Town of Oro Valley - Dispatchers (556)
Dear Members of the Board,
This report details the annual actuarial valuation of the Arizona Correction Officer Retirement Plan (CORP) as
of June 30, 2025. The valuation was performed to measure the plan’s liability and funding levels and to
determine the actuarially appropriate funding requirements for the applicable plan year. This report was
prepared for use by the Board and those designated or approved by the Board. Use of the results for other
purposes may not be applicable and could produce significantly different results.
DATA AND ASSUMPTIONS
In preparing this report, we have relied on personnel, plan design, and asset information supplied by the Public
Safety Personnel Retirement System (PSPRS). In our opinion, the assumptions used in the valuation, as
adopted by the Board, represent reasonable expectations of anticipated fund experience. Other sets of
assumptions and methods could also be reasonable and could produce materially different results. While we
cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and
reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the
information and believe that it has produced appropriate results. This information, along with any
adjustments or modifications, is summarized in various sections of this report.
DISCLOSURES AND LIMITATIONS
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to factors such as the following: plan experience differing from that anticipated by the economic
or demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period); and changes in plan provisions or applicable law. Due to the limited scope of this
report, we did not provide an analysis of these potential differences.
The computed contribution rates shown in the “Contribution Results” section should be considered minimum
contribution rates that comply with the Board’s funding policy and Arizona Statutes. Users of this report
should be aware that contributions made at that rate do not guarantee benefit security. Given the importance
of benefit security to any retirement system, we suggest that contributions to the System in excess of those
presented in this report be considered.
The funding percentages and unfunded accrued liability as measured based on the actuarial value of assets
will differ from similar measures based on the market value of assets. These measures, as provided, are
appropriate for determining the adequacy of future contributions, but may not be appropriate for the purpose
of settling a portion or all of its liabilities.
This valuation assumes the continuing ability of the participating employers to make the contributions
necessary to fund this plan. A determination regarding whether or not the participating employers are
actually able to do so is outside our scope of expertise. Consequently, we did not perform such an analysis.
In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and
costs. These results are reviewed in the aggregate and for individual sample lives. The output from the
software is either used directly or input into internally developed models to generate the costs. All internally
developed models are reviewed as part of the process. As a result of this review, we believe that the models
have produced reasonable results. We do not believe there are any material inconsistencies among
assumptions or unreasonable output produced due to the aggregation of assumptions.
ACTUARIAL CERTIFICATION
The valuation has been conducted in accordance with all applicable laws and regulations, as well as generally
accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued
by the Actuarial Standards Board; specifically No. 6 for Measuring Retiree Group Benefit Obligations/No. 4 for
Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, No. 23 for Data Quality,
No. 27 for Selection of Economic Assumptions for Measuring Pension Obligations, No. 35 for Selection of
Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, No. 44, Selection and
Use of Asset Valuation Methods for Pension Valuations, and No. 51, Assessment and Disclosure of Risk
Associated with Measuring Pension Obligations.
In our opinion, the Minimum Required Contribution set forth in this report constitutes a reasonable actuarially
determined contribution under Actuarial Standard of Practice No. 4.
The undersigned are familiar with the immediate and long-term aspects of pension/OPEB valuations and meet
the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions
contained herein. All of the sections of this report are considered an integral part of the actuarial opinions.
To our knowledge, no associate of Foster & Foster, Inc. working on this report has any direct financial interest
or indirect material interest in the Arizona Correction Officer Retirement Plan, nor does anyone at Foster &
Foster, Inc. act as a member of the PSPRS Board of Trustees. Thus, there is no relationship existing that might
affect our capacity to prepare and certify this actuarial report.
Respectfully submitted,
Foster & Foster, Inc.
____________________________ ____________________________
Bradley R. Heinrichs, FSA, EA, MAAA Paul M. Baugher, FSA, EA, MAAA
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
4
TABLE OF CONTENTS
SUMMARY................................................................................................................................ 5
CONTRIBUTION RESULTS .............................................................................................................. 8
Development of Employer Contributions – Tiers 1 & 2 Members ............................................... 8
Development of Contributions – Tier 3 Defined Contribution (DC) Members ............................ 9
Contribution Rate Summary ....................................................................................................... 10
Impact of Additional Contributions ............................................................................................ 11
Historical Summary of Rates ...................................................................................................... 11
LIABILITY SUPPORT ................................................................................................................... 12
Liabilities and Funded Ratios by Benefit - Tiers 1 & 2 ................................................................ 12
Derivation of Experience (Gain)/Loss ......................................................................................... 13
Amortization of Unfunded Liabilities - Tiers 1 & 2 ..................................................................... 14
ASSET SUPPORT ....................................................................................................................... 15
MEMBER STATISTICS ................................................................................................................. 18
Statistical Data – Active Members - Tiers 1 & 2 ......................................................................... 18
Statistical Data – Inactive Members - Tiers 1 & 2 ....................................................................... 19
Active Age, Service and Pay Distributions – Tiers 1 & 2 ............................................................. 20
Age Distributions – Inactive Members ....................................................................................... 21
ACTUARIAL ASSUMPTIONS AND METHODS ..................................................................................... 22
PLAN PROVISIONS .................................................................................................................... 27
ACTUARIAL FUNDING POLICY ...................................................................................................... 33
SUPPLEMENTARY INFORMATION .................................................................................................. 38
Glossary ...................................................................................................................................... 38
Discussion of Risk ....................................................................................................................... 42
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
5
SUMMARY
The regular annual actuarial valuation of the Arizona Corrections Officer Retirement Plan for the Town of Oro
Valley - Dispatchers, performed as of June 30, 2025, has been completed and the results are presented in this
Report. The purpose of this valuation is to:
Compute the employers’ recommended contribution rates for the fiscal year ending June 30, 2027.
This information is contained in the section entitled “Contribution Results”.
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and active
members and compare accumulated assets with the liabilities to assess the funded condition. This
information is contained in the section entitled “Liability Support.”
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
EMPLOYER CONTRIBUTION REQUIREMENTS (AS A PERCENTAGE OF PAYROLL)
Tiers 1 & 2 Members
Pension 6.00% 6.00%
Health 0.00% 0.00%
Total 6.00% 6.00%
FUNDED STATUS
Tiers 1 & 2 Members
Pension 100.2% 102.8%
Health 384.1% 316.0%
Total 101.9% 104.3%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
6
CHANGES FROM PRIOR YEAR
Changes in the results from the prior year’s valuation can be illustrated in the following tables along with high-
level explanations for the entire Plan below:
CONTRIBUTION RATE
Tiers 1 & 2
Pension Health
Contribution Rate Last Valuation 6.00% 0.00%
Asset Experience (2.99%) (0.14%)
Payroll Base 0.00% (0.25%)
Liability Experience 24.71% (0.48%)
Additional Contribution 0.00% 0.00%
Assumption/Method Change 0.00% 0.00%
Other (21.72%) 0.87%
Contribution Rate This Valuation 6.00% 0.00%
FUNDED STATUS
Tiers 1 & 2
Pension Health
Funded Status Last Valuation 102.8% 316.0%
Asset Experience 0.6% 3.5%
Liability Experience (5.0%) 50.4%
Additional Contribution 0.0% 0.0%
Assumption/Method Change 0.0% 0.0%
Other 1.8% 14.2%
Funded Status This Valuation 100.2% 384.1%
Assets Experience – Asset gains and losses (relative to the assumed earnings rate) are smoothed over seven
years for Tiers 1 and 2. The return on the market value of assets for the year ending June 30, 2025 was 11.0%.
On a smoothed, actuarial value of assets basis, the average return was 7.9%. This return exceeded the 2024
assumed earnings rate of 7.2%.
Payroll Base – Under the current amortization policy for Tiers 1 and 2, the contribution rate is developed as a
level percentage of payroll. Payroll for this purpose includes members of this plan and the defined
contribution plan’s members that would have been in this plan. To the extent that actual payroll is
lower/greater than last year’s projected payroll, the contribution rate will increase/decrease as a result.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
7
Liability Experience – Experience overall was favorable, driven by higher than expected investment returns,
lower than expected salary increases for actives, and favorable overall decrement experience.
Additional Contribution – Monies contributed in excess of the required contribution rate in order to pay down
the unfunded liability.
Assumption / Method Change – The Board continued the decrease in the payroll growth assumption from
1.00% to 0.50%.
Other – This is the combination of all other factors that could impact liabilities year-over-year, with the
primary sources being changes in member data.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
8
CONTRIBUTION RESULTS
DEVELOPMENT OF EMPLOYER CONTRIBUTIONS – TIERS 1 & 2 MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
PENSION
Normal Cost
Total Normal Cost 9.47% $8,057 9.19% $17,597
Employee Cost (7.65%) (6,508) (7.65%) (14,644)
Employer (Net) Normal Cost 1.82% 1,549 1.54% 2,953
Amortization of Unfunded Liability 0.98% 834 0.00% 0
Total Employer Cost (Pension) 2.80% 2,383 1.54% 2,953
HEALTH
Normal Cost 0.19% $160 0.20% $389
Amortization of Unfunded Liability (0.19%) (160) (0.20%) (389)
Total Employer Cost (Health) 0.00% 0 0.00% 0
Total Employer Cost (Pension + Health) 2.80% 2,383 1.54% 2,953
Total Minimum Contribution Requirement
(if applicable) 6.00% 6.00%
Alternate Contribution Rate (ACR) 1 6.00% 6.00%
Underlying Payroll (as of valuation date) 85,074 191,430
The results above are shown both prior to and after the application of the statutory minimum contribution
requirement of 6% of payroll.
1 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to an 6% minimum) and is charged when retirees return to active status.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
9
DEVELOPMENT OF CONTRIBUTIONS – TIER 3 DEFINED CONTRIBUTION (DC) MEMBERS
Valuation Date June 30, 2025 June 30, 2024
Applicable to Fiscal Year Ending 2027 2026
Rate Dollar Rate Dollar
TIER 3 DC ONLY
Employee Cost 7.00% $ 0 7.00% $ 0
Employee Health Subsidy Program Cost 0.18% 0 0.20% 0
Employee Disability Program Cost 0.43% 0 0.43% 0
Total Employee Cost 7.61% 0 7.63% 0
Employer Cost 5.00% 0 5.00% 0
Employer Health Subsidy Program Cost 0.18% 0 0.20% 0
Employer Disability Program Cost 0.43% 0 0.43% 0
Total Employer Cost (before Legacy) 5.61% 0 5.63% 0
ER Legacy Cost of Tiers 1 & 2 Amort of Unfunded
Liabilities 1 0.98% 0
0.00% 0
Total Employer Cost (with Legacy) 6.59% 0 5.63% 0
Underlying Payroll (as of valuation date) 0 0
1 Pursuant to ARS § 38-891(A), the amortization of positive unfunded liabilities for Tiers 1 & 2 shall be applied to all Tier
3 payroll on a level percent basis. However, while it is statutorily required to present the rates in this manner, these are
the minimums where alternate methods for paying down that unfunded liability is at the discretion of each employer.
Further, to understand the effects of reform in relation to Tier 3, compare the total rate of Tier 3 before application of
those legacy costs.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
10
CONTRIBUTION RATE SUMMARY
Tier 1 Tier 2 Tier 3
Membership Date On or After 7/1/1986 1/1/2012 7/1/2018
Available Retirement Plan DB Only DB Only DB Only 1 DC Only
EMPLOYEE CONTRIBUTION RATE
PSPRS DB Rate 7.65% 7.65% N/A PSPRS DC Rate 2 7.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 0.43%
Total EE Contribution Rate 7.65% 7.65% N/A 7.61%
EMPLOYER CONTRIBUTION RATE
PSPRS DB Normal Cost 1.82% 1.82% N/A PSPRS DB Tier 1 & 2 Legacy Cost 3 0.98% 0.98% N/A 0.98%
PSPRS DC Rate 5.00%
Employer Health Subsidy Program Cost 0.18%
PSPDCRP Disability Program Rate 0.43%
Total ER Contribution Rate 2.80% 2.80% N/A 6.59%
Employer Alternate Contribution Rate 4 6.00% 6.00% 6.00% 6.00%
Exhibit summarizes employee and employer contributions based on Statute and the results of June 30, 2025
actuarial valuation. Pension and health components are combined, where applicable.
1 Applicable to AOC Probation and Surveillance only.
2 Although the default contribution rate is 7%, Tier 3 members in the DC plan may choose an employee contribution rate
anywhere be-tween 5% and 40%.
3 Per statute (ARS § 38-891(A), any positive unfunded liability for Tiers 1 and 2 is to be applied to all Tier 3 (DB and DC)
payrolls.
4 The Alternate Contribution Rate is the sum of the positive amortization rates for Tiers 1 & 2 Pension and Health (subject
to a 6% minimum) and is charged when retirees return to active status.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation Report as of June 30, 2025 – Town of Oro Valley - Dispatchers (556)
11
IMPACT OF ADDITIONAL CONTRIBUTIONS
Additional Contribution (000s)
Impact On $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100
Funded Status - June 30, 2025 100.2% 100.4% 100.6% 100.9% 101.1% 101.4% 101.6% 101.8% 102.1% 102.3% 102.5%
FYE 2027 Contribution Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Table shows the hypothetical change in the funded status and contribution rate from the June 30, 2025 actuarial valuation results for Tiers 1 & 2 if
an additional contribution of the amount shown had been made to the Fund on June 30, 2025. This illustration can help estimate the impact of
contributing additional monies to the fund in the future.
HISTORICAL SUMMARY OF RATES
Pension Health
Valuation
Date June 30
Fiscal Year
Ending June 30
Normal
Cost
Unfunded
Amortization Total Normal
Cost
Unfunded
Amortization Total
TIERS 1 & 2 2021 2023 2.83% 115.62% 118.45% 0.24% (0.24%) 0.00%
(Employer) 2022 2024 2.25% 126.19% 128.44% 0.23% (0.23%) 0.00%
2023 2025 1.51% 0.00% 1.51% 0.21% (0.21%) 0.00%
2024 2026 1.54% 0.00% 1.54% 0.20% (0.20%) 0.00%
2025 2027 1.82% 0.98% 2.80% 0.19% (0.19%) 0.00%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
12
LIABILITY SUPPORT
LIABILITIES AND FUNDED RATIOS BY BENEFIT - TIERS 1 & 2
Pension and health liabilities were not impacted under the lateral transfer methodology.
June 30, 2025 June 30, 2024
PENSION
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 3,733,130 $ 2,625,259
Vested Members 1,149 28,152
Active Members 489,939 1,434,762
Total Actuarial Present Value of Benefits 4,224,218 4,088,173
Actuarial Accrued Liability (AAL)
All Inactive Members 3,734,279 2,653,411
Active Members 440,328 1,342,545
Total Actuarial Accrued Liability 4,174,607 3,995,956
Actuarial Value of Assets (AVA) 4,181,047 4,106,486
Unfunded Actuarial Accrued Liability (6,440) (110,530)
PVB Funded Ratio (AVA / PVB) 99.0% 100.4%
AAL Funded Ratio (AVA / AAL) 100.2% 102.8%
HEALTH
Actuarial Present Value of Benefits (PVB)
Retirees and Beneficiaries $ 16,521 $ 10,733
Active Members 9,569 19,848
Total Present Value of Benefits 26,090 30,581
Actuarial Accrued Liability (AAL)
All Inactive Members 16,521 10,733
Active Members 8,815 18,088
Total Actuarial Accrued Liability 25,336 28,821
Actuarial Value of Assets (AVA) 97,324 91,076
Unfunded Actuarial Accrued Liability (71,988) (62,255)
PVB Funded Ratio (AVA / PVB) 373.0% 297.8%
AAL Funded Ratio (AVA / AAL) 384.1% 316.0%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
13
DERIVATION OF EXPERIENCE (GAIN)/LOSS
Tiers 1 & 2
Pension Health
(1) Unfunded Actuarial Accrued Liability as of June 30, 2024 (110,530) (62,255)
(2) Normal Cost Developed in Last Valuation 2,953 389
(3) Actual Contributions 9,118 0
(4) Expected Interest On (1), (2), and (3) (8,068) (4,454)
(5) Expected Unfunded Actuarial Accrued Liability as of June
30, 2025: (1)+(2)-(3)+(4) (124,763) (66,320)
(6) Changes to UAAL Due to Assumptions, Methods and
Benefits 0 0
(7) Change to UAAL Due to Actuarial (Gain)/Loss 118,323 (5,668)
(8) Unfunded Actuarial Accrued Liability as of June 30, 2025 (6,440) (71,988)
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
14
AMORTIZATION OF UNFUNDED LIABILITIES - TIERS 1 & 2
Date Established Outstanding Balance Years Remaining Amortization Rate
PENSION 6/30/2019 0 11 0.00%
6/30/2021 98,877 11 14.60%
6/30/2022 137,514 12 19.19%
6/30/2023 (257,983) 13 (34.23%)
6/30/2024 (86,485) 14 (10.97%)
6/30/2025 101,637 15 12.39%
Total (6,440) 0.98%
HEALTH 6/30/2019 0 10 0.00%
6/30/2021 0 10 0.00%
6/30/2022 0 10 0.00%
6/30/2023 0 10 0.00%
6/30/2024 0 10 0.00%
6/30/2025 (69,454) 10 (10.94%)
Total (69,454) (10.94%)
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
15
ASSET SUPPORT
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR YEAR ENDED JUNE 30, 2025
Tiers 1 & 2
Pension Health
ADDITIONS Contributions
Member Contributions $ 33,885,185 $ 0
Employer Contributions 158,736,763 0
Health Insurance 0 238,176
Total Contributions 192,621,948 238,176
Investment Income Net Increase in Fair Value 391,272,119 13,909,651
Interest and Dividends 73,029,160 2,596,174
Other Income 42,339,729 1,504,460
Less Investment Expenses (9,979,582) (290,972)
Net Investment Income 496,661,426 17,719,313
Non-investment Income
Transfers In 60,728 0
Total Additions 689,344,102 17,957,489
DEDUCTIONS Distributions to Members Benefit Payments 242,275,675 0
Health Insurance Subsidy 0 5,259,944
Refund of Contributions 12,401,433 0
Total Distributions 254,677,108 5,259,944
Administrative Expenses 4,190,027 141,085
Transfers Out 225,843 0
Other 0 0
Total Deductions 259,092,978 5,401,029
NET INCREASE / (DECREASE) 430,251,124 12,556,460
NET POSITION HELD IN TRUST Prior Valuation 4,499,633,348 162,705,984
Beginning of the Year Adjustment (4) (0)
End of the Year 4,929,884,468 175,262,444
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
16
DEVELOPMENT OF PENSION ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 24,385,543 24,385,543 24,385,543 24,385,543 24,385,543 24,385,543 24,385,540
2024 Experience 17,668,689 17,668,689 17,668,689 17,668,689 17,668,689 17,668,690
2023 Experience 2,641,788 2,641,788 2,641,788 2,641,788 2,641,789
2022 Experience (55,178,167) (55,178,167) (55,178,167) (55,178,167)
2021 Experience 57,594,125 57,594,125 57,594,122
2020 Experience (13,457,282) (13,457,281)
2019 Experience (5,782,112)
Total Amortization 27,872,584 33,654,697 47,111,975 (10,482,147) 44,696,021 42,054,233 24,385,540
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 7.9%
A. Investment Income
A1. Actual Investment Income $ 492,471,399
A2. Expected Amount for Immediate Recognition 321,772,601
A3. Amount Subject to Amortization 170,698,798
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 4,461,039,238
C2. Non-investment Net Cash Flow (62,220,275)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 4,748,464,148
C4. Market Value of Assets, June 30, 2025 4,929,884,468 4,340,788
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 4,748,464,148 4,181,047
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
17
DEVELOPMENT OF HEALTH ACTUARIAL VALUE OF ASSETS - TIERS 1 & 2
Year Ended June 30
B. Amortization Schedule 2025 2026 2027 2028 2029 2030 2031
2025 Experience (A3 / 7) 908,800 908,800 908,800 908,800 908,800 908,800 908,798
2024 Experience 672,291 672,291 672,291 672,291 672,291 672,294
2023 Experience 86,024 86,024 86,024 86,024 86,021
2022 Experience (2,435,759) (2,435,759) (2,435,759) (2,435,757)
2021 Experience 3,479,700 3,479,700 3,479,703
2020 Experience (806,920) (806,919)
2019 Experience (382,213)
Total Amortization 1,521,923 1,904,137 2,711,059 (768,642) 1,667,112 1,581,094 908,798
D. Rates of Return
D1. Market Value Rate of Return 11.0%
D2. Actuarial Value Rate of Return 8.1%
A. Investment Income
A1. Actual Investment Income $ 17,578,228
A2. Expected Amount for Immediate Recognition 11,216,630
A3. Amount Subject to Amortization 6,361,598
C. Actuarial Value of Assets Total Employer
C1. Actuarial Value of Assets, June 30, 2024 159,542,103
C2. Non-investment Net Cash Flow (5,021,768)
C3. Preliminary Actuarial Value of Assets, June 30, 2025: (A2 + B + C1 + C2) 167,258,888
C4. Market Value of Assets, June 30, 2025 175,262,444 101,981
C5. Final Actuarial Value of Assets, June 30, 2025 (C3 Within 20% Corridor of C4) 167,258,888 97,324
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
18
MEMBER STATISTICS
STATISTICAL DATA – ACTIVE MEMBERS - TIERS 1 & 2
June 30, 2025 June 30, 2024
ACTIVES
Number 1 2
Average Current Age 53.8 53.9
Average Age at Employment 35.9 32.3
Average Past Service 17.9 21.6
Average Annual Salary $82,396 $72,947
ACTIVES (TRANSFERRED)
Number 0 0
Average Current Age N/A N/A
Average Age at Employment N/A N/A
Average Past Service N/A N/A
Average Annual Salary N/A N/A
TOTAL NUMBER (ACTIVE) 1 2
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
19
STATISTICAL DATA – INACTIVE MEMBERS - TIERS 1 & 2
June 30, 2025 June 30, 2024
RETIREES
Number 5 4
Average Current Age 66.8 68.4
Average Annual Benefit $47,234 $41,072
BENEFICIARIES
Number 1 1
Average Current Age 71.0 70.0
Average Annual Benefit $39,312 $38,541
DISABILITY RETIREES
Number 1 1
Average Current Age 54.0 53.0
Average Annual Benefit $5,084 $4,984
INACTIVE / VESTED
Number 1 2
Average Current Age 43.1 43.7
Average Accumulated
Contributions $1,121 $12,051
TOTAL NUMBER (INACTIVE) 8 8
FORMER MEMBERS (TRANSFERRED) 0 0
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
20
ACTIVE AGE, SERVICE AND PAY DISTRIBUTIONS – TIERS 1 & 2
Past Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30+ Total Count Total Pay Average Pay
<25 0 0 0 0 0 0 0 0 0 0
25 - 29 0 0 0 0 0 0 0 0 0 0
30 - 34 0 0 0 0 0 0 0 0 0 0
35 - 39 0 0 0 0 0 0 0 0 0 0
40 - 44 0 0 0 0 0 0 0 0 0 0
45 - 49 0 0 0 0 0 0 0 0 0 0
50 - 54 0 0 0 1 0 0 0 1 82,396 82,396
55 - 59 0 0 0 0 0 0 0 0 0 0
60 - 64 0 0 0 0 0 0 0 0 0 0
65+ 0 0 0 0 0 0 0 0 0 0
Total 0 0 0 1 0 0 0 1 82,396 82,396
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
21
AGE DISTRIBUTIONS – INACTIVE MEMBERS
Retirees, Disableds and
Beneficiaries
Age Count
Annual
Pensions
<40 0 0
40-45 0 0
45-49 0 0
50-54 1 5,084
55-59 2 58,557
60-64 0 0
65-69 1 54,916
70-74 2 33,290
75-79 1 36,868
80-84 0 0
85-89 0 0
90-94 0 0
95-99 0 0
100+ 0 0
Total 7 40,080
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
22
ACTUARIAL ASSUMPTIONS AND METHODS
Interest Rate 7.20% per year. This is the assumed earnings rate on System assets,
compounded annually, net of investment and administrative
expenses.
Mortality Rate Active Lives:
PubS-2010 Employee mortality, adjusted by a factor of 1.28 for male
members and 1.11 for female members, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021). 100% of active deaths are assumed to be
in the line of duty.
Inactive Lives:
PubS-2010 Healthy Retiree mortality, adjusted by a factor of 1.33
for male retirees and 1.13 for female retirees, with generational
improvements using 85% of the most recent projection scale
(currently Scale MP-2021).
Beneficiaries:
PubS-2010 Survivor mortality, adjusted by a factor of 0.99 for male
beneficiaries and adjusted by a factor of 1.09 for female
beneficiaries, with generational improvements using 85% of the
most recent projection scale (currently Scale MP-2021).
Disabled Lives:
PubS-2010 Disabled mortality, adjusted by a factor of 1.02 for male
disabled members and 0.98 for female disabled members, with
generational improvements using 85% of the most recent projection
scale (currently Scale MP-2021).
The mortality assumptions sufficiently accommodate anticipated
future mortality improvements.
Retirement / DROP Rates These rates are used to project future decrements from the active
population due to retirement. The rates below are based on a 2022
experience study using actual plan experience.
Tier 1 – reaching 20 (25 for dispatchers) years of service after age
62:
Age-related rates based on age at retirement: 35% per year from
age 62 - 74 and 100% assumed at age 75.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
23
Tier 1 – reaching 20 (25 for dispatchers) years of service before age
62:
Service-related rates based on service at retirement. See complete
table of rates at the end of this section.
Tier 2:
Age-related rates based on age at retirement:
Age Rate
53 - 54 40%
55 30%
56 - 57 15%
58 - 59 30%
60 - 61 65%
62+ 100%
Disability Rate These rates are used to project future decrements from the active
population due to disability. Complete table of rates based on age
at disability are provided at the end of this section. These rates are
based on a 2022 experience study using actual plan experience.
80% of disablements are assumed to be duty-related.
Termination Rate These rates are used to project future decrements from the active
population due to termination. Complete table of rates based on
service at termination are provided at the end of this section. The
rates apply to members prior to retirement eligibility and are based
on a 2022 experience study using actual plan experience.
Inflation 2.50%.
Cost-of-Living Adjustment 1.85%.
Salary Increases See table at the end of this section. This is an annual increase for
individual member’s salary. These rates are based on a 2022
experience study using actual plan experience.
Marital Status For active members, 75% of males and 50% of females are assumed to be
married. Actual marital status is used, where applicable, for inactive
members.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
24
Spouse’s Age Males spouses are assumed to be two years older than females
members and female spouses are assumed to be three years
younger than males members.
Benefit Commencement Deferred members are assumed to commence benefits as follows:
Less than 10 years service (all tiers): immediate refund of
contributions
Tier 1 (10+ years service): life annuity payable at age 62
Tiers 2 & 3 (10+ years service): immediate refund of
contributions
Reverse DROP Election Based on experience provided by PSPRS, 20% of eligible members
are assumed to elect the reverse DROP benefit. Interest is credited
at 2.00% annually.
Health Care Utilization For active members, 60% of retirees are expected to utilize retiree
health care. Actual utilization is used for inactive members.
Funding Method Entry Age Normal Cost Method.
Lateral Transfers When active members transfer between employers, the new
employer’s liability starts from their new date of hire with no past
service liability (i.e., all liability is accrued through normal cost). Per
PSPRS administrative decision, once the new employer’s liability is
fully funded, the liability will reflect all past service liability.
Actuarial Asset Method Each year the assumed investment income is recognized in full while
the difference between actual and assumed investment income are
smoothed over a fixed 7-year period. Actuarial Assets shall not be
less than 80% nor greater than 120% of the Market Value of Assets.
Note that during periods when investment performance exceeds
(falls short) of the assumed rate, the actuarial value of assets will
tend to be less (greater) than the market value of assets.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
25
Amortization Method See Funding Policy for complete details. In short:
Tiers 1 & 2:
Any positive UAAL (assets less than funding policy targets) is
amortized using a layered approach according to a Level
Dollar method over a closed period of 15 years (phased into
from current period).
Any negative UAAL (assets greater than funding policy
targets) is amortized according to a Level Dollar method
over an open period of 10 years.
Payroll Growth 0.50% per year. This is the annual increase expected on total
employer payroll.
Changes Since the Prior Valuation
The payroll growth assumption was lowered from 1.00% to 0.50%.
There were no method changes since the prior valuation.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
26
RETIREMENT RATES TERMINATION RATES OTHER RATES
Service Rate Service
Tier 1 and
Tier 2 Tier 3 Age
Disability
Rate
Salary
Scale
20 32% 0 23.0% 15.0% 20 0.020% 6.25%
21 32% 1 20.0% 13.5% 21 0.020% 6.00%
22 20% 2 16.5% 12.0% 22 0.020% 5.50%
23 17% 3 15.5% 11.0% 23 0.020% 5.25%
24 17% 4 14.0% 9.0% 24 0.020% 5.25%
25 17% 5 10.5% 8.0% 25 0.020% 5.25%
26 24% 6 10.0% 7.0% 26 0.020% 5.25%
27 17% 7 9.0% 6.0% 27 0.020% 5.00%
28 17% 8 8.0% 6.0% 28 0.020% 5.00%
29 17% 9 8.0% 6.0% 29 0.020% 5.00%
30 25% 10 8.0% 6.0% 30 0.020% 4.75%
31 25% 11 6.5% 2.5% 31 0.020% 4.75%
32 25% 12 5.0% 2.5% 32 0.020% 4.50%
33 25% 13 4.0% 2.5% 33 0.020% 4.50%
34 30% 14 3.0% 2.5% 34 0.020% 4.25%
35 30% 15 3.0% 2.5% 35 0.035% 4.25%
36 30% 16 2.0% 2.0% 36 0.035% 4.00%
37+ 100% 17 2.0% 1.5% 37 0.035% 4.00%
18 2.0% 1.0% 38 0.035% 3.75%
19 2.0% 0.5% 39 0.035% 3.75%
20+ 2.0% 0.5% 40 0.045% 3.75%
41 0.045% 3.75%
42 0.045% 3.75%
43 0.045% 3.50%
44 0.045% 3.50%
45 0.055% 3.50%
46 0.055% 3.50%
47 0.055% 3.50%
48 0.055% 3.50%
49 0.055% 3.50%
50 0.080% 3.50%
51 0.080% 3.50%
52 0.080% 3.25%
53 0.080% 3.25%
54 0.080% 3.25%
55 0.100% 3.25%
56 0.100% 3.25%
57 0.100% 3.25%
58 0.100% 3.00%
59 0.100% 3.00%
60 0.200% 3.00%
61+ 0.000% 3.00%
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
27
PLAN PROVISIONS
The following is a summary of the benefit provisions provided in Title 38, Chapter 5, Article 6 of the
Arizona Revised Statutes.
Membership Full-time employees of a participating employer in a designated
position, whose customary employment is at least 40 hours each
week. Includes employees hired after July 1, 2018 only if they are a
judiciary probation or surveillance officer who makes the
irrevocable election to participate in the plan.
Benefit Tiers Benefits differ for members based on their hire date:
Tier 1: Hired before January 1, 2012
Tier 2: Hired on or after January 1, 2012 but before July 1, 2018
Tier 3: Hired on or after July 1, 2018
Salary Salary is the amount including base salary, shift and military
differential pay, and holiday pay, paid to an employee on a regular
payroll basis. For Tier 3 members, salary is limited by statutory cap
($70,000 with adjustments by the Board).
Average Monthly Benefit Tier 1: One-thirty-sixth of the highest total salary during a period
Salary of thirty-six consecutive months of service within the last one hundred
twenty months of service.
Tiers 2 & 3: One-sixtieth of the highest total salary during a period of
sixty consecutive months of service within the last one hundred
twenty months of service.
Credited Service Total periods of service, both from service other State plans and those
compensated periods of service for which the member made
contributions to the fund.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
28
Normal Retirement
Date Tier 1: First day of the month following attainment of 1) age 62 with
10 years of Credited Service, 2) 20 (25, if dispatcher) years of Credited
Service, or 3) age and Credited Service points equal to 80.
Tier 2: First day of month following the attainment of 1) age 52.5 with
25 years of Credited Service, or 2) age 62 with 10 years of Credited
Service.
Tier 3: First day of month following the attainment of age 55 with 10
years of Credited Service.
Benefit Tier 1: 2.50% times Credited Service (up to 20 years) times Average
Monthly Salary. If Credited Service exceeds 20 years, an additional
2.00% accrual is provided for up to five years. If Credited Service
exceeds 25 years, the additional accrual for service in excess of 20
years is increased to 2.50%. Maximum benefit equals 80% of
Average Monthly Salary.
Tier 2: 2.50% times Credited Service times Average Monthly Salary
(maximum benefit equals 80% of Average Monthly Salary).
Tier 3: Benefit multiplier (below) times Average Monthly Benefit
Salary times Credited Service (maximum benefit of 80% of Average
Monthly Benefit Salary):
Credited Service Benefit Multiplier
10 years, but less than 15 1.25%
15 years, but less than 20 1.50%
20 years, but less than 22 1.75%
22 years, but less than 25 2.00%
25+ years 2.25%
Form of Benefit For married retirees, an annuity payable for the life of the member
with 80% continuing to the eligible spouse upon death. For
unmarried retirees, the normal form is a single life annuity.
Early Retirement Only applicable to Tier 3 members
Date Attainment of age 52.5 and 10 years of Credited Service.
Benefit Actuarial equivalent of Normal Retirement benefit.
Form of Benefit Same as Normal Retirement
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
29
Disability Benefit –Duty-Related
Eligibility Total and permanent disability incurred in performance of duty.
Benefit Amount The greater of 1) 50% of Average Monthly Salary, and 2) the Normal
Retirement pension that the member is entitled to receive.
Disability Benefit – Ordinary (not duty-related)
Eligibility Total and permanent disability not incurred in performance of duty.
Benefit Amount Dispatchers: Normal Retirement pension that the member is entitled
to receive prorated on Credited Service (maximum 25 years) over 25.
All Others: Normal Retirement pension that the member is entitled to
receive prorated on Credited Service (maximum 20 years) over 20.
Pre-Retirement Death Benefit
Payable to Eligible Survivor Payable to eligible spouse for life; payable to eligible children until
adopted, age 18, or age 23 if full-time student. Note that this benefit
is only payable following death of an active member.
Service Incurred: 100% of Average Monthly Salary.
Non-Service Incurred: 100% of Average Monthly Salary.
Vesting (Termination)
Vesting Service Requirement 10 years.
Non-Vested Benefit Tier 1: Lump sum payment of accumulated contributions, plus
additional amount based on years of Credited Service.
Service Additional % of Contributions
Less than 5 years 0%
5 years 25%
6 years 40%
7 years 55%
8 years 70%
9 years 85%
10+ years 100%
Tiers 2 & 3: Lump sum payment of accumulated contributions, with
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
30
interest at rate determined by the Board.
Vested Benefit Tier 1: Deferred lump sum based on two times member’s
accumulated contributions, deferred to age 62. Member is not
entitled to survivor benefits, benefit increases, or group health
insurance subsidy.
Tiers 2 & 3: Deferred retirement annuity calculated same as normal
retirement pension. Payable if contributions left in fund until reach
age requirement. Member is entitled to survivor benefits, benefit
increases, and group health insurance subsidy.
Cost-of-Living Adjustment Payable to retired member or survivor of retired member
Tiers 1 & 2: Compound cost-of-living adjustment on base benefit. First
payment is made on July 1, 2018, with annual adjustments effective
every July 1 thereafter.
Cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. Maximum increase of 2%.
Tier 3: Compound cost-of-living adjustment on base benefit beginning
earlier of first calendar year after the 7th anniversary of retirement or
when the retired member reaches 60 years of age.
A cost-of-living adjustment shall be paid on July 1 each year that the
funded ratio for members hired on or after July 1, 2017 is 70% or more.
The cost-of-living adjustment will be based on the average annual
percentage change in the Metropolitan Phoenix-Mesa Consumer Price
Index published by the United States Department of Labor, Bureau of
Statistics. The cost-of-living adjustment will not exceed:
2%, if funded ratio for members who are hired on or after July
1, 2017 is 90% or more;
1.5%, if funded ratio for members who are hired on or after
July 1, 2017 is 80-90%;
1%, if funded ratio for members who are hired on or after July
1, 2017 is 70-80%.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
31
Reverse Deferred Retirement Option Plan (Reverse DROP)
Eligibility Tier 1 and eligible for normal pension with at least 24 years of
Credited Service (25 years for dispatchers). Must not have been
awarded disability pension.
Reverse DROP Date First day of month immediately following completion of required
Credited Service or date not more than 60 consecutive months
before the date the member elects to participate in the Reverse
DROP, whichever is later.
Benefit Amount Calculated based on Credited Service and Average Monthly Salary as
of the Reverse DROP Date.
Reverse DROP Lump Sum Accumulated benefit amounts (with interest) from Reverse DROP
date to the date the member elected to participate in Reverse DROP.
Interest is equal to the yield on five-year Treasury note as of the first
day of the month, as published by the Federal Reserve Board.
Post-Retirement Health Insurance Subsidy
Eligibility Retired member or survivor who elect health coverage provided by
the state or participating employer.
Maximum Subsidy Amounts Member Only With Dependents
(monthly) Medicare Eligible $100 $170
One w/ Medicare N/A $215
Not Medicare Eligible $150 $260
Contributions
Employee Tiers 1 & 2:
Non-Dispatchers: 8.41% of salary, or 50/50 split of total
employer and employee costs, whichever is lower, until the
plan is 100% funded. Minimum contribution of 7.65% of
salary.
Dispatchers: 0.45% less than non-dispatcher rate until plan is
100% funded; equal thereafter.
Tier 3: 66.7% of the Normal Cost plus 50% of a level-dollar
amortization of unfunded actuarial accrued liability over a closed
period not to exceed 10 years.
Employer Tiers 1 & 2: Normal Cost, plus amortization of unfunded actuarial
accrued liability over a closed period not to exceed 20 years.
Contribution will never be less than 6% of payroll.
Tier 3: 33.3% of the Normal Cost plus 50% of a level-dollar
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
32
amortization of unfunded actuarial accrued liability over a closed
period not to exceed 10 years.
Changes Since the Prior Valuation
None.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
33
ACTUARIAL FUNDING POLICY
A pension plan funding policy describes how pension funding will improve for underfunded plans or maintain
funded benefits for funded plans over time for those benefits defined in Arizona Revised Statutes (ARS). Those
benefits defined in ARS are to be equitably managed and administered by the Arizona Public Safety Personnel
Retirement System (PSPRS agency).
This Actuarial Funding Policy identifies the funding objectives and elements of the actuarial funding policy set
by the Board for the PSPRS agency. The Board adopted this Funding Policy to help ensure the systematic
funding of future benefit payments for members of the retirement systems as established by the legislature.
This policy covers all retirements systems administered by the Board: The Public Safety Personnel Retirement
System (PSPRS); the Correction Officers Retirement Plan (CORP); and the Elected Officials Retirement Plan
(EORP).
To achieve the systematic funding of future benefits, metrics are identified to measure the progress, or the
lack of progress, over time to identify trends. These trends inform the continuation of the current policies or
identify areas of needed research for consideration.
This funding policy is reviewed annually and adopted by the Board in accordance with ARS 38-863.02. This
policy was reviewed and adopted by the Board in September 2025.
PSPRS STATEMENT OF PURPOSE
The Purpose of the Public Safety Personnel Retirement System is to provide uniform, consistent, and equitable
statewide retirement programs for those who have been entrusted to our care.
FUNDING OBJECTIVES
1. Maintain adequate assets so that current plan assets, plus future contributions and investment earnings,
are sufficient to fund all benefits expected to be paid to members and their beneficiaries.
a. Corollary 1a: Current and future contributions should be calculated based upon assumptions that
reflect the Board’s best estimate of future experience and methods that appropriately allocate
costs to address generational equity.
b. Corollary 1b: While the shorter-term objective is to fully fund the Actuarial Accrued Liability (AAL)
that estimates benefits earned as of the valuation date, contributions should target the long-term
Present Value of Benefits (PVB) to fund all benefits and help offset risks.
c. As closed plans mature, the target funding should be 110% of AAL or 100% of PVB, whichever is
greater.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
34
2. Maintain public policy goals of accountability and transparency through stakeholder communication and
education. Each policy element is clear in intent and effect, and each should be considered in a balanced
approach to determine how and when the funding requirements of the plan will be met.
a. Corollary 2a: Board shall provide stakeholders with separate reports and tools to help explain
current results as well as to help model future funding requirements.
3. Promote intergenerational equity. Defined benefit pensions are designed with a long-term perspective
and designed to minimize contribution volatility that cannot avoid some level of generational cost shift.
However, the goal is that each generation of members and employers (taxpayers) should, to the extent
possible, incur the cost of benefits for the employees who provide services to them, rather than shifting
those costs to other generations of members and employers (taxpayers).
a. Corollary 3a: A systematic reduction of the Unfunded Actuarial Accrued Liability (UAAL) over a
reasonable time period is paramount to achieving this objective.
Consideration can be given to reduce volatility, to the extent possible, of employer and employee contribution
rates as long as the integrity of the objectives listed above is not compromised.
ELEMENTS OF ACTUARIAL FUNDING POLICY
1. Actuarial Cost Method
a. The Entry Age Normal level percent of pay actuarial cost method of valuation shall be used in
determining the AAL and Normal Cost. Differences in the past between assumed experience and
actual experience (“actuarial gains and losses”) shall become part of the AAL. The Normal Cost
shall be determined on an individual basis for each active member.
2. Asset Smoothing Method
a. The investment gains or losses of each valuation period, resulting from the difference between
the actual investment return and assumed investment return, shall be recognized annually in level
amounts over five years (Tier 3) or seven years (Tiers 1 and 2) in calculating the Actuarial Value of
Assets (AVA).
b. The AVA so determined shall be subject to a 20% corridor relative to the Market Value of Assets
(MVA).
3. Amortization Method (Unfunded Amounts)
a. The AVA is subtracted from the computed AAL. Any unfunded amount is amortized as a level
percent of payroll over a closed period.
b. The unfunded liabilities, for EORP and Tiers 1 & 2 for both PSPRS and CORP, determined in the
6/30/2019 actuarial valuation will become the initial layer for each employer beginning with the
6/30/2020 actuarial valuation and amortized using the current closed year period for that
employer and continue to decrease each year.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
35
i. The payroll growth rate assumption used to amortize the PSPRS Unfunded Liability will be
decreased by 0.75% each year with the intention of ultimately achieving 0.0%.
ii. The payroll growth rate used to amortize the Correction Officers Retirement Plan (CORP)
Unfunded Liability will be reduced by 0.5% until 0.0% is reached.
iii. The payroll growth rate used to amortize the Elected Officials Retirement Plan (EORP)
Unfunded Liability will be 0.0%.
c. Gains and losses, for EORP and Tiers 1 & 2 for both PSPRS and CORP, for each employer beginning
with the 6/30/2020 actuarial valuation will be amortized as a new layer over the same
amortization period as the regular unfunded liability to a minimum of 15 years. Once the
amortization period for each employer decreases to 15 years, each subsequent year’s gains and
losses will be amortized as a new 15-year closed layer.
i. The payroll growth rate used to amortize the unfunded liability for all Plans under this
paragraph will be 0.0% (i.e. level-dollar amortization).
d. Tier 3 amortization methods are established in ARS 38-843.G and ARS 38-891.K.
4. Amortization Method (Overfunded Amounts)
a. The AVA is subtracted from the target funding level (greater of 110% of AAL or 100% of PVB). Any
overfunded amount is amortized as a level dollar amount over an open 10-year period.
5. Tier 3 Rate Calculation
a. Tier 3 is distinct from Tiers 1 & 2 in PSPRS and CORP as the contributions are a shared percentage
(50/50 split for PSPRS: for CORP, employer 1/3 and member 2/3 of the normal cost plus 50 percent
each, member and employer, of the UAAL amortization) for employers and members based on
the actuarially calculated rate. To reduce the impact of volatility to rates, the Tier 3 rates will be
smoothed over a 3-year rolling period based on the actuarially calculated rates for each year’s
actuarial valuation.
i. Beginning with the 6/30/2023 valuation, the prospective Tier 3 rates set by the Board of
Trustees are planned to be a rolling average of the actuarial calculated Tier 3 rates using
the 6/30/2023, 6/30/2022 and 6/30/2021 rates in the initial process.
ii. As assumptions may be updated year-to-year, the prior calculated rates are not updated
for those changes, the prior calculated rates are used to smooth in the new rates.
b. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board
committed to continue to monitor market conditions and directions with the intent to ultimately
adopt a single assumed rate of return for all investments for retirement systems/plans
administered by PSPRS agency.
6. Assumed Rate of Return (ARR)
a. At the May 2023 Board Meeting, the Board changed the assumed rate of return for CORP Tier 3,
which was at 7.2%, to match the 7.0% assumed rate of return for PSPRS Tier 3. The Board will
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
36
continue to monitor market conditions and directions with the intent to ultimately adopt a single
assumed rate of return for all investments for retirement systems/plans administered by PSPRS
agency.
7. EORP Floor Considerations
a. Establish a “floor” for EORP based on the immediately previous valuation by adjusting payroll
growth, amortization periods of the original layer or other possible options, to improve funding
in maintaining contribution levels opposed to reducing employer contributions.
METRICS TO MONITOR FUNDING OBJECTIVES
1. Appropriateness of Assumptions – Gain/Loss Experience (Corollary 1a)
a. Metric: Do the cumulative gain/loss layers over the prior five years exceed 8% of plan assets?
b. Measurement: History of annual gain/loss (split by asset and liability experience) and five-year
cumulative results will be tracked.
c. Action Plan: This metric assumes that a full experience study is performed at least every five years so
objective of measurement is to monitor interim experience. If the metric answer is yes, a review of
the sources or causes of gains and losses should be analyzed and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation are
intended to provide a basis for consideration if assumption changes are warranted between full
experience studies.
2. Funding Targets (Corollary 1b)
a. Metric: Has the funded status, on both an AAL and PVB basis when compared to the MVA, increased
over a five-year period?
b. Measurement: History of funded status measures will be tracked.
c. Action Plan: If the answer is no and not readily explainable (e.g., significant assumption change), a
review of the reason(s) for the decrease should be researched and presented to the Advisory
Committee to provide a recommendation to the Board of Trustees. The analysis and presentation
are intended to provide a basis for consideration if changes to assumptions and/or methods are
warranted between full experience studies.
3. Communication with Stakeholders (Corollary 2a)
a. Metric: Have reports and budgeting tools been provided to stakeholders in a timely fashion?
b. Measurement: Yes/No answer based on input from PSPRS administrator. (An annual standard survey
of stakeholders – 3 to 5 questions.)
c. Action Plan: If the answer is no, and periodically regardless (e.g., every three years), PSPRS staff will
revisit this metric to report to the Advisory Committee to provide a recommendation to the Board of
Trustees if current reports / tools are sufficient and if the delivery timing is appropriate.
4. Timely Recognition of Costs (Corollary 3a)
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
37
a. Metric: Has the percentage of unfunded liability subject to negative amortization decreased over a
five-year lookback period?
b. Measurement: History of unfunded liability subject to negative amortization as a percentage of total
unfunded liability will be tracked.
c. Action Plan: If the answer is no, and not readily explainable (e.g., adopted assumption changes being
phased in are anticipated to address negative amortization), a review of the reason(s) for negative
amortization should be researched and presented to the Advisory Committee to provide a
recommendation to the Board of Trustees. The analysis and presentation are intended to provide a
basis for consideration if changes to assumptions and/or methods are warranted between full
experience studies.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
38
SUPPLEMENTARY INFORMATION
GLOSSARY
Accrued Benefit The benefit earned as of a specific date based on the provisions of
the plan and the member’s age, service, and salary as of that date.
Actuarial Accrued Liability The portion of the anticipated future benefits allocated to years
prior to the valuation date determined according to the plan’s
Actuarial Cost Method.
Actuarial Value of Assets The asset value used in the valuation to determine contribution
requirements. It represents the plan’s Market Value of Assets (see
below), with adjustments according to the plan’s Actuarial Asset
Method. These adjustments produce a “smoothed” value that is
likely to be less volatile from year to year than the Market Value of
Assets.
Actuarial Assumptions Assumptions regarding the occurrence of future events affecting
plan costs. These assumptions include rates of investment earnings,
changes in compensation, rates of mortality, withdrawal,
disablement, and retirement as well as statistics related to marriage
and family composition.
Actuarial Cost Method A method of determining the portion of the cost of a plan to be
allocated to each year; sometimes referred to as the "actuarial
funding method." Each cost method allocates a certain portion of
the actuarial present value of benefits between the Actuarial
Accrued Liability and future normal costs to ensure the plan is
adequately and systematically funded.
Actuarial Gain or Loss The change in Unfunded Actuarial Accrued Liability resulting from
experience different from Actuarial Assumptions. Gains decrease
the Unfunded Actuarial Accrued Liability and losses increase the
Unfunded Actuarial Accrued Liability.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
39
Actuarial Present Value The estimated amount of funds required as of a specified date to
provide a payment or series of payments in the future. It is
determined by discounting future payments at predetermined rates
of interest, and by probabilities of payments between the specified
date and the expected date of payment.
Amortization Payment The portion of the plan contribution designated to pay interest and
reduce the outstanding principal balance of Unfunded Actuarial
Accrued Liability. If the amortization payment is less than the
accrued interest on the Unfunded Actuarial Accrued Liability the
outstanding principal balance will increase.
Decrements Events which result in the termination of membership in the system
such as retirement, disability, withdrawal, or death.
Entry Age Normal Cost Method Under this method, the normal cost is the sum of the individual
normal costs for all active participants. For an active participant,
the normal cost is the participant’s normal cost accrual rate,
multiplied by the participant’s current compensation.
The normal cost accrual rate equals:
(i) the present value of future benefits for the participant,
determined as of the participant’s entry
age, divided by
(ii) the present value of the compensation expected to be paid to
the participant for each year of the participant’s anticipated future
service, determined as of the participant’s entry age.
In calculating the present value of future compensation, the salary
scale is applied both retrospectively and prospectively to estimate
compensation in years prior to and subsequent to the valuation
year based on the compensation used for the valuation.
The accrued liability is the sum of the individual accrued liabilities
for all participants and beneficiaries. A participant’s accrued liability
equals the present value, at the participant’s attained age, of future
benefits less the present value at the participant’s attained age of
the individual normal costs payable in the future. A beneficiary’s
accrued liability equals the present value, at the beneficiary’s
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
40
attained age, of future benefits. The unfunded accrued liability
equals the total accrued liability less the actuarial value of assets.
Under this method, the entry age used for each active participant is
the participant’s age at the time he or she would have commenced
participation if the plan had always been in existence under current
terms, or the age as of which he or she first earns service credits for
purposes of benefit accrual under the current terms of the plan.
Funded Ratio A measure of the ratio of the plan assets to liabilities of the system.
Typically, the assets used in the measure are the Actuarial Value of
Assets as determined by the asset valuation method. The Funded
Ratio depends not only on the financial strength of the plan but also
on the asset valuation method used to determine the assets and on
the Actuarial Cost Method used to determine the liabilities.
Interest Rate The assumed long-term rate of return on plan assets.
Market Value of Assets The fair market value of plan assets as of the valuation date.
Normal Cost The current year's cost for benefits yet to be funded. Under the
Entry Age Normal cost method, it is determined for each participant
as the present value of future benefits, determined as of the
Member’s entry age, amortized as a level percentage of
compensation over the anticipated number of years of
participation, determined as of the entry age.
Present Value of Benefits The single sum value on the valuation date of all future benefits to
be paid to current plan participants.
Projected Annual Payroll The projected annual rate of pay for the fiscal year following the
fiscal year beginning on the valuation date of all covered Members.
Projected Benefits The benefits expected to be paid in the future based on the
provisions of the plan and the Actuarial Assumptions. The projected
values are based on anticipated future advancement in age and
accrual of service as well as increases in salary paid to the
participant.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
41
Total Annual Payroll The projected annual rate of pay for the fiscal year beginning on the
valuation date of all covered Members.
Ultimate Cost The total cost to the plan once the last benefit has been paid. The
Ultimate Cost equals
Benefit Payments
Plus: Expenses
Less: Investment Income
The Ultimate Cost is independent of the Actuarial Cost Method
selected.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and the
Liability Actuarial Value of Assets. Under the Entry Age Normal Actuarial
Cost Method, an actuarial gain or loss, based on actual versus
expected UAAL, is determined in conjunction with each valuation
of the plan.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
42
DISCUSSION OF RISK
ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and
Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary’s
professional judgment, may reasonably be anticipated to significantly affect the plan’s future financial
condition.
Throughout this report, actuarial results are determined using various actuarial assumptions. These results
are based on the premise that all future plan experience will align with the plan’s actuarial assumptions;
however, there is no guarantee that actual plan experience will align with the plan’s assumptions. It is possible
that actual plan experience will differ from anticipated experience in an unfavorable manner that will
negatively impact the plan’s funded position.
Below are examples of ways in which plan experience can deviate from assumptions and the potential impact
of that deviation. Typically, this results in an actuarial gain or loss representing the current-year financial
impact on the plan’s unfunded liability of the experience differing from assumptions; this gain or loss is
amortized over a period of time determined by the plan’s amortization method. When assumptions are
selected that adequately reflect plan experience, gains and losses typically offset one another in the long term,
resulting in a relatively low impact on the plan’s contribution requirements associated with plan experience.
When assumptions are too optimistic, losses can accumulate over time and the plan’s amortization payment
could potentially grow to an unmanageable level.
Investment Return: When the rate of return on the Actuarial Value of Assets falls short of the
assumption, this produces a loss representing assumed investment earnings that were not realized.
Further, it is unlikely that the plan will experience a scenario that matches the assumed return in each
year as capital markets can be volatile from year to year. Therefore, contribution amounts can vary in
the future.
Salary Increases: When a plan participant experiences a salary increase that was greater than
assumed, this produces a loss representing the cost of an increase in anticipated plan benefits for the
participant as compared to the previous year. The total gain or loss associated with salary increases
for the plan is the sum of salary gains and losses for all active participants.
Payroll Growth: The plan’s payroll growth assumption, if one is used, causes a predictable annual
increase in the plan’s amortization payment in order to produce an amortization payment that
remains constant as a percentage of payroll if all assumptions are realized. If payroll increases less
than the plan’s payroll growth assumption, the plan’s amortization payment can increase significantly
as a percentage of payroll even if all assumptions other than the payroll growth assumption are
realized.
Demographic Assumptions: Actuarial results take into account various potential events that could
happen to a plan participant, such as retirement, termination, disability, and death. Each of these
potential events is assigned a liability based on the likelihood of the event and the financial
consequence of the event for the plan. Accordingly, actuarial liabilities reflect a blend of financial
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
43
consequences associated with various possible outcomes (such as retirement at one of various
possible ages). Once the outcome is known (e.g. the participant retires) the liability is adjusted to
reflect the known outcome. This adjustment produces a gain or loss depending on whether the
outcome was more or less favorable than other outcomes that could have occurred.
Contribution risk: This risk results from the potential that actual employer contributions may deviate
from actuarially determined contributions, which are determined in accordance with the Board’s
funding policy. The funding policy is intended to result in contribution requirements that if paid when
due, will result in a reasonable expectation that assets will accumulate to be sufficient to pay plan
benefits when due. Contribution deficits, particularly large deficits and those that occur repeatedly,
increase future contribution requirements and put the plan at risk for not being able to pay plan
benefits when due.
IMPACT OF PLAN MATURITY ON RISK
For newer pension plans, most of the participants and associated liabilities are related to active members who
have not yet reached retirement age. As pension plans continue in operation and active members reach
retirement ages, liabilities begin to shift from being primarily related to active members to being shared
amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred.
It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk
characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as
long of a time horizon to recover from losses (such as losses on investments due to lower than expected
investment returns) as plans where the majority of the liability is attributable to active members. For this
reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial
inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small
positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the
size of the fund is shrinking, which can result in less assets being available for investment in the market.
To assist with determining the maturity of the plan, we have provided some relevant metrics in the table
following titled “Plan Maturity Measures and Other Risk Metrics”. For a better understanding of the overall
Plan and the impact of these risks, please refer to the consolidated PSPRS valuation report.
LOW DEFAULT RISK OBLIGATION MEASURE
ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, was revised
as of December 2021 to include a “low-default-risk obligation measure” (LDROM). This liability measure is
consistent with the determination of the actuarial accrued liability shown on page 8 in terms of member data,
plan provisions, and assumptions/methods, including the use of the Entry Age Normal Cost Method, except
that the interest rate is tied to low-default-risk fixed income securities. The S&P Municipal Bond 20 Year High
Grade Rate Index (daily rate closest to, but not later than, the measurement date) was selected to represent
a current market rate of low risk but longer-term investments that could be included in a low-risk asset
portfolio. The interest rate used in this valuation was 4.81%, resulting in an LDROM of $5,593,520 for Tiers 1
and 2. The LDROM should not be considered the “correct” liability measurement; it simply shows a possible
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
44
outcome if the Board elected to hold a very low risk asset portfolio. The Board actually invests the pension
plan’s contributions in a diversified portfolio of stocks and bonds and other investments with the objective of
maximizing investment returns at a reasonable level of risk. Consequently, the difference between the plan’s
Actuarial Accrued Liability disclosed earlier in this section and the LDROM can be thought of as representing
the expected taxpayer savings from investing in the plan’s diversified portfolio compared to investing only in
high quality bonds.
The actuarial valuation reports the funded status and develops contributions based on the expected return of
the plan’s investment portfolio. If instead, the plan switched to investing exclusively in high quality bonds, the
LDROM illustrates that reported funded status would be lower (which also implies that the Actuarially
Determined Contributions would be higher), perhaps significantly. Unnecessarily high contribution
requirements in the near term may not be affordable and could imperil plan sustainability and benefit security.
Arizona Corrections Officer Retirement Plan
Actuarial Valuation as of June 30, 2025 - Town of Oro Valley - Dispatchers (556)
45
PLAN MATURITY MEASURES AND OTHER RISK METRICS – TIERS 1 & 2
1 Determined as total contributions minus benefit payments. Administrative expenses are typically included but are considered part of the net interest rate
assumption for this plan.
6/30/2025 6/30/2024 6/30/2023 6/30/2022 6/30/2021
Support Ratio
Total Actives 1 2 2 2 2
Total Inactives 8 8 9 9 10
Actives / Inactives 12.5% 25.0% 22.2% 22.2% 20.0%
Asset Volatility Ratio
Market Value of Assets (MVA) 4,340,788 4,142,013 3,851,063 1,662,090 1,789,608
Total Annual Payroll 82,396 145,894 145,894 139,892 132,031
MVA / Total Annual Payroll 5,268.2% 2,839.1% 2,639.6% 1,188.1% 1,355.4%
Accrued Liability (AL) Ratio
Inactive Accrued Liability 3,734,279 2,653,411 2,694,780 2,630,985 2,569,215
Total Accrued Liability 4,174,607 3,995,956 3,910,076 3,721,151 3,551,295
Inactive AL / Total AL 89.5% 66.4% 68.9% 70.7% 72.3%
Funded Ratio
Actuarial Value of Assets (AVA) 4,181,047 4,106,486 3,929,592 1,710,819 1,649,829
Total Accrued Liability 4,174,607 3,995,956 3,910,076 3,721,151 3,551,295
AVA / Total Accrued Liability 100.2% 102.8% 100.5% 46.0% 46.5%
Net Cash Flow Ratio
Net Cash Flow 1 (245,403) (96,744) 2,032,267 (60,256) (10,257)
Market Value of Assets (MVA) 4,340,788 4,142,013 3,851,063 1,662,090 1,789,608
Net Cash Flow / MVA (5.7%) (2.3%) 52.8% (3.6%) (0.6%)
Budget and Finance Commission 4.
Meeting Date:03/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
PRESENTATION AND POSSIBLE DISCUSSION REGARDING THE TOWN'S PRELIMINARY FIVE-YEAR
FINANCIAL FORECAST THROUGH FY2030/2031. (Please reference attachments)
RECOMMENDATION:
N/A
EXECUTIVE SUMMARY:
The Town's adopted financial policies provide "as a part of the annual Town budget preparation cycle, the Finance
Department shall prepare a minimum five-year financial forecast of projected revenues and expenditures to
measure the financial sustainability of the Town's operations and service levels." As such, staff will present the
five-year financial forecast through FY 2030/31 for the General Fund, Highway Fund, Capital Fund and
Community Center Fund.
The forecast assumptions were compiled by referencing several sources of data, including the University of
Arizona, Joint Legislative Budget Committee (JLBC), State Finance Advisory Committee, Arizona Department of
Revenue, and the Arizona Department of Transportation. Staff also incorporated Town historical trend data and
professional judgment into formulation of this forecast.
BACKGROUND OR DETAILED INFORMATION:
N/A
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
N/A
Attachments
FY27 TOV Five-Year Forecast
Town of Oro Valley | Five-Year Financial Forecast | General Fund
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
GENERAL FUND
SUMMARY
The General Fund forecast reflects a fiscally conservative outlook. Revenues grow steadily, driven primarily by local sales tax,
while state-shared revenues remain modest due to the reduction in Oro Valley's per-capita allocation resulting from the
incorporation of San Tan Valley. Outflows stay closely aligned with revenues throughout the period, with personnel costs as
the primary expenditure driver. The fund balance declines in the near term before stabilizing at the Town's adopted 25% of
expenditures reserve requirement.
FIVE-YEAR FINANCIAL FORECAST – GENERAL FUND
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Revenue 57,502,135 59,777,100 62,684,131 64,250,761 66,159,524 67,600,893
Personnel 36,536,840 36,437,175 38,179,123 39,456,430 40,766,095 41,934,931
Operations & Maintenance 15,104,790 15,768,526 15,917,941 16,585,973 16,999,864 17,713,513
Capital 211,000 272,635 374,814 277,058 179,370 181,751
Total Expenditures 51,852,630 52,478,335 54,471,878 56,319,461 57,945,330 59,830,195
Transfers Out (11,004,547) (9,679,432) (7,713,868) (7,469,405) (7,807,727) (7,299,482)
Change in Fund Balance 16,654,052 16,978,197 15,926,121 15,400,705 16,021,922 15,070,180
Beginning Fund Balance 20,855,294 15,500,252 13,119,572 13,617,956 14,079,852 14,486,319
Ending Fund Balance 15,500,252 13,119,572 13,617,956 14,079,852 14,486,319 14,957,538
All amounts are in U.S. dollars and represent forecasted figures subject to revision.
REVENUE ASSUMPTIONS
Local Sales Tax
•In FY 2025/26, the Town Council eliminated the spending restriction on the half-cent sales tax previously dedicated to
the Community Center and redirected those revenues to the General Fund. All local sales tax collections are now
presented in the General Fund.
•A local Use Tax approved by Council and effective July 1, 2026 is projected to generate approximately 2% of retail
transaction privilege tax (TPT) revenue, totaling an estimated $1.2 million cumulatively over the forecast period.
•OV Marketplace development is projected to generate approximately $2.2 million in new sales tax revenue beginning in
FY 2026/27.
•Hotel and bed tax revenues are projected to grow 3% annually, with additional Marketplace-related revenue included
beginning FY 2026/27.
•Construction sales tax is projected to decline gradually as available developable land diminishes.
•Retail, restaurant and bar, utility, and other sales tax categories are assumed to grow modestly. Commercial
development revenues are based on conservative one-time estimates plus identified projects.
State Shared Revenues
•The incorporation of San Tan Valley dilutes the statewide population pool by approximately 1.6% annually, reducing
Oro Valley's share of state-shared revenues accordingly.
•Smart and Safe funding is projected to grow 1% annually.
Page 1 of 11
Town of Oro Valley | Five-Year Financial Forecast | General Fund
Charges for Services, Licenses & Permits
• Administrative overhead charges to the Town's enterprise funds and Parks and Recreation revenues are projected to
grow 3% annually.
• Permitting revenues are expected to slow as available land for new development decreases, with development
revenues tied to projected permitting activity.
Grants, Fines, Intergovernmental & Miscellaneous
• Police grants, fine revenues, RTA transit reimbursement, and miscellaneous in-lieu bed tax income each projected at
1% annual growth.
Interest Income
• Projected using a rolling three-year average interest rate applied to the beginning fund balance.
EXPENDITURE ASSUMPTIONS
Salaries & Benefits
• Police step increases included annually; general pay adjustments at 3% per year
• No new positions assumed over the forecast period.
• Public safety pension rate held flat at 12.61% plus $500,000 in supplemental contributions annually beginning in FY
2027/28
• Health insurance premiums increase 3% per year.
Operations & Maintenance
• Expenditures are projected to grow 2–3% annually, reflecting general inflationary pressures.
Capital Outlay
• Vistoso Trails Nature Preserve improvements funded at $200,000/year through FY 2028/29, then $100,000/year
thereafter.
TRANSFER ASSUMPTIONS
Transfers Out
• Fund balance above the 25% reserve threshold is transferred to the Capital Fund; CIP transfers equal 5% of projected
sales tax collections plus any excess reserve balance.
• Annual operating deficits in the Community Center Fund are covered by transfers from the General Fund.
Page 2 of 11
Town of Oro Valley | Five-Year Financial Forecast | Highway Fund
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
HIGHWAY FUND
SUMMARY
The Highway Fund relies primarily on Highway User Revenue Fund (HURF) receipts, which are projected to grow steadily in
line with Arizona Department of Transportation forecasts. However, HURF revenues are expected to come in lower than prior
forecasts, reflecting the reduction in Oro Valley's per-capita state allocation resulting from the incorporation of San Tan Valley.
As a result, HURF revenues alone are insufficient to cover the Fund's capital needs. To bridge this gap, a total of $11.5 million
will be transferred from the Capital Fund over the five-year forecast period, enabling the Town to advance critical roadway
projects while keeping the fund balance positive throughout the forecast.
Pavement preservation represents the Fund's largest recurring capital commitment, with costs growing at 3 percent annually
from a $3.2 million base. This ongoing investment is essential to extending the service life of the Town's existing road network.
FIVE-YEAR FINANCIAL FORECAST - HIGHWAY FUND
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Revenue 4,486,341 4,685,542 4,854,679 4,944,521 5,048,842 5,182,714
Personnel 1,350,500 1,378,534 1,405,177 1,432,384 1,460,167 1,488,541
Operations & Maintenance 1,283,443 1,266,991 1,246,482 1,277,852 1,310,131 1,343,349
Capital 4,790,000 4,333,000 5,528,898 5,488,880 3,556,726 3,661,628
Total Expenditures 7,423,943 6,978,525 8,180,556 8,199,116 6,327,025 6,493,518
Transfers In 2,000,000 3,000,000 3,000,000 3,000,000 1,500,000 1,000,000
Change in Fund Balance (937,602) 707,017 (325,877) (254,595) 221,816 (310,804)
Beginning Fund Balance 1,598,787 661,185 1,368,202 1,042,325 787,730 1,009,546
Ending Fund Balance 661,185 1,368,202 1,042,325 787,730 1,009,546 698,742
All amounts are in U.S. dollars and represent forecasted figures subject to revision.
REVENUE ASSUMPTIONS
Highway User Tax revenues are the primary driver of Fund revenues and form the basis for capital and operational planning.
• HURF revenues are projected to grow 2.1–2.6% annually, using a statistical model built on historical data and ADOT
state-level projections.
• The forecast assumes no change in the state's formula for distributing HURF revenues to cities and towns.
• Interest income is estimated using a rolling two-year average rate applied to the beginning fund balance.
EXPENDITURE ASSUMPTIONS
Personnel costs follow General Fund assumptions for pay and benefit adjustments, with no new positions anticipated during
the forecast period. Operations and maintenance expenditures are held at current service levels with 2–3% annual growth to
reflect inflationary pressures.
Capital expenditures are drawn from the adopted 10-Year Capital Improvement Program and include:
Page 3 of 11
Town of Oro Valley | Five-Year Financial Forecast | Highway Fund
• Pavement Preservation – $3.2 million base with 3% annual increases; no significant increase in lane miles assumed
• La Cañada Drive Phase III (Naranja Dr. to Tangerine Rd.) – FY 2026/27
• Public Works Operations Laydown Yard (Electricity) – FY 2026/27
• Rancho Vistoso Bridge Deck Repair over Honeybee Wash, Eastbound – FY 2026/27
• Asphalt Laydown Machine – FY 2026/27
• First Avenue Mill & Overlay (CDO Bridge to Tangerine Rd.) – FY 2027/28
• Rancho Vistoso Blvd Bridge Deck Replacement (over Big Wash, east & westbound) – FY 2027/28
• RV Blvd Mill/Overlay (Honey Bee Wash Bridge to Green Tree Drive) – FY 2028/29
• Annual bridge maintenance and arterial roadway improvements – ongoing throughout the forecast period
TRANSFER ASSUMPTIONS
Transfers from the Capital Fund total $11.5 million over five years, structured to align with planned CIP costs and tapering as
major construction is completed.
Page 4 of 11
Town of Oro Valley | Five-Year Financial Forecast | Community Center Fund – CRC Operations
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
COMMUNITY CENTER FUND – CRC OPERATIONS
SUMMARY
The Community Center Fund tracks operations of the Oro Valley Community and Recreation Center (CRC), including the
fitness facility, recreation programming, and related amenities. Golf operations at the El Conquistador courses, Pusch Ridge
course, and the Overlook Restaurant are presented separately.
Revenues are derived primarily from charges for services including memberships, recreation programs, and daily drop-in use.
A one-time membership and rental fee adjustment approved by Town Council and effective January 2026 results in a higher
revenue base compared to prior forecasts, though revenues are otherwise projected to grow modestly and in line with
historical trends.
In FY 2025/26, the Town Council eliminated the spending restriction on the half-cent sales tax and redirected those revenues
to the General Fund. As a result, the Community Center Fund no longer receives direct sales tax support. Consistent with the
Town's cost recovery model for recreation services, projected operating deficits are covered by transfers from the General
Fund. The fund balance is projected to reach zero by the end of the forecast period, which is an intentional outcome of this
funding structure.
FIVE-YEAR FINANCIAL FORECAST – CRC OPERATIONS
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Revenue 1,658,726 1,850,388 1,885,586 1,921,439 1,966,483 2,008,308
Personnel 1,300,447 1,315,046 1,353,815 1,393,734 1,434,837 1,477,159
Operations & Maintenance 1,138,897 903,569 922,765 942,525 962,870 983,824
Total Operating
Expenditures
2,439,344 2,218,615 2,276,580 2,336,259 2,397,707 2,460,982
Operating Income/(Loss) (780,618) (368,227) (390,994) (414,820) (431,224) (452,675)
Capital 1,778,700 50,000 360,000 100,000 200,000 -
Total Expenditures 4,218,044 2,268,615 2,636,580 2,436,259 2,597,707 2,460,982
Transfers In (GF) - 52,720 750,994 514,820 631,224 452,675
Change in Fund Balance (2,559,318) (365,506) - - - -
Beginning Fund Balance 2,924,825 365,506 - - - -
Ending Fund Balance 365,506 - - - - -
All amounts are in U.S. dollars and represent forecasted figures subject to revision.
Page 5 of 11
Town of Oro Valley | Five-Year Financial Forecast | Community Center Fund – CRC Operations
REVENUE ASSUMPTIONS
Charges for Services
• Charges for services, including CRC membership dues, recreation programs, and daily drop-in use, are projected to
grow at 2% annually based on historical participation trends.
• The forecast assumes no increases to membership or program fee rates during the forecast period.
Interest Income
• Interest earnings are projected using a rolling three-year average investment yield applied to projected fund balances.
Miscellaneous Revenue
• Miscellaneous revenues are assumed at approximately $3,500 annually, reflecting historical receipts such as insurance
recoveries, sale of surplus assets, and special event revenue.
EXPENDITURE ASSUMPTIONS
Salaries and Benefits
• Personnel costs reflect the same pay and benefit adjustment assumptions used in the General Fund forecast.
Operations and Maintenance
• Operations and maintenance expenditures are projected to increase 2–3% annually to reflect inflationary pressures on
supplies, services, and facility maintenance.
Capital Outlay
• Capital expenditures reflect projects and equipment replacements identified in the Town’s 10-Year Capital Improvement
Program (CIP).
Page 6 of 11
Town of Oro Valley | Five-Year Financial Forecast | Community Center Fund – Golf & Restaurant Operations
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
COMMUNITY CENTER FUND – GOLF & RESTAURANT OPERATIONS
SUMMARY
Golf operations include the 36-hole El Conquistador Golf Course and the 9-hole Pusch Ridge Golf Course, as The Overlook
Restaurant at the CRC facility. Golf revenues are projected to grow modestly through increases in green fees, membership
dues, and related sales, with food and beverage revenues also expected to increase steadily over the forecast period.
Operations are assumed to continue under the current operating model, with expenditures increasing primarily due to labor,
benefit, and operating cost inflation throughout the forecast period.
FIVE-YEAR FINANCIAL FORECAST – GOLF & RESTAURANT OPERATIONS
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Revenue 6,638,050 6,913,374 7,137,856 7,369,914 7,609,807 7,901,473
Operations & Maintenance 5,989,482 6,411,230 6,623,638 6,846,628 7,077,775 7,340,836
Operating Income/(Loss) 648,568 502,144 514,218 523,286 532,032 560,637
Capital 630,000 192,500 620,000 200,000 355,000 235,000
Total Expenditures 6,619,482 6,603,730 7,243,638 7,046,628 7,432,775 7,575,836
Change in Fund Balance 18,568 309,644 (105,782) 323,286 177,032 325,637
All amounts are in U.S. dollars and represent forecasted figures subject to revision.
REVENUE ASSUMPTIONS
Golf Operations (36-Hole and Pusch Ridge Courses)
• Forecast assumes continued 36-hole operations beginning in FY 2026/27, excluding normal overseeding closures.
• Green fees and membership dues are projected to increase 3.5% annually.
• Rounds played are projected to grow 1% annually.
• Pro shop sales are projected to increase 3% annually.
• Food, beverage, and alcohol sales are projected to increase 3% annually.
• Other golf-related revenues are projected to grow 1.5–3% annually.
Food & Beverage – Overlook Restaurant
• Food and beverage revenues are projected to increase approximately 3.5% annually.
• The forecast assumes no significant closures or operational interruptions during the forecast period.
HOA contributions
• HOA contributions for the Pusch 9 course assumed to continue throughout the forecast horizon
Page 7 of 11
Town of Oro Valley | Five-Year Financial Forecast | Community Center Fund – Golf & Restaurant Operations
EXPENDITURE ASSUMPTIONS
Operations & Maintenance
•The current golf operating model is assumed to continue through FY 2030/31 with no significant changes to staffing
levels.
•Labor costs are projected to increase approximately 3% annually for golf operations and 3.5% annually for food and
beverage operations.
•Benefits and workers' compensation costs are projected to increase approximately 5% annually.
•Golf operating expenses are projected to increase 4–5% annually.
•Food and beverage cost of goods sold and material costs are projected to increase 3.5–4% annually.
Capital Outlay
•Capital expenditures reflect projects and equipment replacements identified in the Town’s 10-Year Capital
Improvement Program (CIP). Planned capital costs are subject to revision.
Page 8 of 11
Town of Oro Valley | Five-Year Financial Forecast | Capital Fund
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
CAPITAL FUND
SUMMARY
The Capital Fund serves as the Town's primary vehicle for financing infrastructure investments, equipment, and fleet
replacement. Its principal funding source is transfers of excess reserves from the General Fund, supplemented by vehicle
replacement contributions, and interest income.
Capital expenditures are driven largely by the adopted 10-Year Capital Improvement Program. The Fund also provides $11.5
million in transfers to the Highway Fund over five years to supplement HURF revenues for roadway projects and contributes
local match funding to the Grants Fund for transit vehicle acquisitions.
The Capital Fund's reserve balance is projected to grow from $11.2 million to $14.5 million over the forecast period. While this
growth reflects sound fiscal planning, it is important to note that the Capital Fund requires a substantial ongoing reserve to
fund multi-year projects, absorb timing differences between project expenditures and revenue receipts, and respond to
unplanned infrastructure needs. Based on a two-year average of projected capital expenditures, the recommended minimum
reserve for the Capital Fund is approximately $7 million. Viewed in that context, the Fund's reserve position is adequate but
not excessive, and the projected balance should not be interpreted as discretionary funding available for new spending.
FIVE-YEAR FINANCIAL FORECAST - CAPITAL FUND
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Revenue 1,538,926 1,499,408 1,579,209 1,557,182 1,574,510 1,670,221
Operations & Maintenance 871 - - - - -
Capital 11,867,973 2,618,500 3,134,000 2,532,500 2,061,000 2,007,000
Total Expenditures 11,868,844 2,618,500 3,134,000 2,532,500 2,061,000 2,007,000
Transfers In 7,000,000 5,618,094 3,267,304 3,395,290 3,907,035 3,576,217
Transfers Out (2,234,200) (3,000,000) (3,120,800) (3,124,600) (1,628,400) (1,132,400)
Net Transfers 4,765,800 2,618,094 146,504 270,690 2,278,635 2,443,817
Change in Fund Balance (5,564,118) 1,499,002 (1,408,287) (704,628) 1,792,145 2,107,039
Beginning Fund Balance 16,771,987 11,207,869 12,706,870 11,298,583 10,593,955 12,386,101
Ending Fund Balance 11,207,869 12,706,870 11,298,583 10,593,955 12,386,101 14,493,139
All amounts are in U.S. dollars and represent forecasted figures subject to revision.
REVENUE ASSUMPTIONS
Capital Fund revenues reflect a mix of dedicated contributions, investment earnings, and policy-driven transfers from the
General Fund.
• Vehicle reserves grow at 3% annually, reflecting the replacement value of new non-enterprise fund vehicles charged
to the General Fund over their useful lives.
• Miscellaneous revenues, primarily vehicle sales proceeds and insurance recoveries, are assumed flat throughout the
forecast period.
• Interest income is estimated using a rolling three-year average rate applied to the beginning fund balance.
• General Fund transfers represent excess reserves above the Town's adopted 25% minimum reserve policy.
Page 9 of 11
Town of Oro Valley | Five-Year Financial Forecast | Capital Fund
EXPENDITURE ASSUMPTIONS
Capital outlays reflect projects programmed in the adopted 10-Year CIP and include facility improvements, technology
infrastructure, park amenities, and fleet replacement. Notable planned expenditures include Police Facility design and
engineering ($1.5 million) and the ongoing Vehicle Replacement Program, which averages approximately $1.4 million
annually.
TRANSFER ASSUMPTIONS
Transfers In
• Transfers from the General Fund represent excess reserves above the Town's adopted 25% minimum reserve policy.
Transfers Out
• To the Highway Fund – $11.5 million over five years to supplement HURF revenues for critical roadway projects.
• To the Grants Fund – Local match contributions for grant-funded transit vehicle acquisitions.
Page 10 of 11
Town of Oro Valley | Five-Year Financial Forecast | Fund Balance Summary
TOWN OF ORO VALLEY
Five-Year Financial Forecast | FY 2026/27 – FY 2030/31
FIVE-YEAR FORECAST FUND BALANCE SUMMARY
A central goal of the Town's financial planning is long-term fiscal sustainability. For most funds, this means maintaining or
growing reserves over time, and a stable or increasing fund balance signals that the Town is living within its means. However,
sustainability looks different depending on a fund's purpose. Some funds are designed to draw down reserves intentionally,
while others operate on a cost recovery model where an annual deficit is expected and covered by policy. It is also appropriate
in some years to spend down accumulated fund balance for one-time strategic investments; what is important is that ongoing
expenditures are funded by ongoing revenues.
Because these funds are interrelated and serve different functions, individual balances will fluctuate over the forecast period
and should not be evaluated in isolation. The table below summarizes the beginning and ending fund balance for each fund
over the five-year forecast period. In total, the combined fund balance across all four funds is projected to grow by 8.7%,
reflecting the Town's commitment to disciplined financial management and sustainable long-term planning.
Fund Beginning Balance
(FY 26/27) Ending Balance
(FY 30/31) Change %
General Fund 15,500,252 14,957,549 (542,703) -3.5%
Highway Fund 661,185 698,742 +37,557 +5.6%
Community Center Fund 365,506 -(365,506)-100%
Capital Fund 11,207,869 14,493,139 +3,285,270 +29%
Total 27,734,812 30,149,430 +2,414,618 +8.7%
All amounts are in U.S. dollars. Beginning balance reflects the FY 2025/26 forecasted ending balance; ending balance reflects the FY 2030/31
forecast.
General Fund - The slight decline in the General Fund balance reflects a one-time drawdown of reserves above the Town's
adopted 25% minimum in the first year of the forecast. From FY 2027/28 forward, the fund balance is projected to hold steady
at the 25% reserve level, consistent with the Town's financial policies and indicative of a structurally balanced budget.
Community Center Fund - The Community Center operates on a cost recovery model in which fees are not intended to
cover the full cost of operations. This is an intentional policy choice reflecting the Town's commitment to providing accessible
recreation services to the community. Annual operating deficits are covered by transfers from the General Fund, and the
projected zero ending balance is by design.
Capital Fund - The Capital Fund maintains a recommended minimum reserve of approximately $7 million, equivalent to a
two-year average of projected capital expenditures. The fund balance serves as a critical backstop for projects already
underway or encumbered, ensuring the Town can meet existing contractual obligations if General Fund transfers are reduced
or suspended due to a revenue downturn. The projected ending balance reflects adequate but not excessive reserves given
the Fund's ongoing commitments.
Page 11 of 11
Budget and Finance Commission 5.
Meeting Date:03/17/2026
Submitted By:David Gephart, Finance
SUBJECT:
PRESENTATION AND DISCUSSION OF BUDGET STABILIZATION PLAN
RECOMMENDATION:
N/A
EXECUTIVE SUMMARY:
What was formerly titled a "Draft Recession Plan", has been modified and is now called a "Budget Stabilization
Plan".
BACKGROUND OR DETAILED INFORMATION:
Changes from what was presented at the last meeting include the following:
Now titled "Budget Stabilization Plan", replacing the "Recession Plan" language1.
Under "Minor":
Added "Sweep unexpended operating appropriations"
Included "Department" under Stage 1, indicating that departments will be primarily responsible for
making cuts to spending and covering budget shortfalls.
2.
Under "Moderate":
Added "Cover shortfall with unassigned fund balances"
Included "Budget Team" under Stage 2, indicating that the Town Budget Team will take the lead in
communicating necessary spending cuts and budget changes to Town departments.
3.
Under "Significant":
Added "Review/Increase enterprise fund cost allocations"
Added "Cover shortfall with assigned fund balances"
Included "Town Manager" under Stage 3, indicating that the Town Manager will take the lead in
communicating and enforcing necessary spending cuts, Town business impacts, and
associated budget changes to Town departments.
4.
Under "Major":
Added "Consider" to "TPT increases"
Added "Cover shortfall with committed fund balances"
Added "Town Council" under Stage 4, indicating that Town Council will be presented with facts and
information, as well as options for addressing revenue shortfall. Town Council will be providing
direction to the Town Manager and departments for possible service-level reductions and other
measures to navigate through the fiscal pressures.
5.
Under "Crisis":
Removed "Once triggered remain in stage until General Fund balance is restored to 25%"
Added "Cover shortfall with any available unrestricted fund balances, including reserve draw-downs"
Added "Town Council" under Stage 5, with reasoning being the same as Stage 4.
6.
FISCAL IMPACT:
N/A
SUGGESTED MOTION:
I Move to recommend Town Council approval of the Oro Valley Budget Stabilization Plan as presented.
I Move to recommend Town Council approval of the Oro Valley Budget Stabilization Plan as presented.
Attachments
Budget Stabilization Plan
Trigger: Up to 22%
Minor Moderate Significant Major Crisis
•Expenditures reduced
where reasonably
possible
•Postpone filling
vacant positions
•Reduce capital
•Limit non-essential
services (ie.
community events)
•Delay large
purchases and
cancel service
contracts
•Discretionary training
and travel reductions
and restrictions
•Institute a partial
hiring freeze
•Operating fee
increases
•Strong justification
for large purchases
•Pause capital
•Institute a broad hiring
freeze; postpone salary
increases, reduce
other employee
benefits
•Partial workforce
reduction (part-time,
contract temporary)
•Additional operating
fee increases
•Major service cuts
•Institute separation
incentive plan and/or
suspend all salary
increases, reduce
other employee
benefits
•Eliminate capital
projects and
expenditures
•Consider TPT
increases
•Eliminate programs
and services
•Institute layoffs,
broad workforce
reduction
•Cease all capital
projects and
purchasing
•Explore options to
restructure debt
obligations (default is
not an option)
•Consider any and all
fee and tax increases
Trigger: Up to 2%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 2% - 4.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 5% - 9.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 10% - 14.99%
Projected Year End Shortfall in Total
General Fund Revenue
Trigger: 15+%
Projected Year End Shortfall in Total
General Fund Revenue
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
•Sweep
unexpended
operating
appropriations
•Cover shortfall with
unassigned fund
balances •Cover shortfall with
assigned fund
balances
•Cover shortfall with
committed fund
balances
Town Council
Town Council
•Cover shortfall with
any available
unrestricted fund
balances, including
reserve draw-
downs
Department
Budget Team
Town Manager
•Review/increase
enterprise fund
cost allocations