Wednesday, April 23, 2014

John's Place: Goodies For Everyone....Except You And Me

The general fund is the one that pays for the running of the town. This general fund (operating fund) represents the bulk of revenue and spending by the town to run our police department, parks, the development portion of our Development and Infrastructure Department as well most other town department services such as finance and town clerk.

The 2014-14 town manager recommended general fund spend is approximately $32.3 million. This is an increase of about $4.0 million from this year. That’s 14%.

A Budget For The Employees

There is $1.5 million to increase employee compensation and to add staff positions. The FY 2014/15 recommended budget includes funding for step and merit pay increases for police employees. This added $500,000 one-time adjustment proposed by the Memo of Understanding (MOU-Union Contract) is a 6% increase in pay.

The FY 2014/15 recommended budget includes $1.1 million to implement the market study adjustments and related benefit costs. We’ve already opined that this study is bogus. Any recommended increase based on this study is, therefore, not valid.

Other increased benefit spending includes:
  • Spending for a self-funded model for dental insurance coverage;
  • A modest increase in premiums to fund expected costs in the Town's self-insurance fund; and 
  • An on-site health clinic. 
More Goodies Galore

There are also goodies for various departments and some constituencies:
  • $200,000 for each of the next three years to rewire the circuits for street lights in Sun City Vistoso. 
  • $200,000 for safety measure improvements to the Tangerine and First Avenue/Rancho Vistoso intersection. 
  • $964,800 for replacing seven (7) marked police vehicles ; one (1) general administration vehicle; four (4) trucks; a field groomer and matching funds for ten (10) grant-funded Transit.
  • $200,000 to design a police evidence facility. In 2015/16, an amount of $2.5 million has been identified to construct the facility. 
  • $233,000 for computer. 
A Call For Fiscal Prudence

“Spending” seems to be the credo of the town when projected increased windfall revenues appear all at once.  It might be more fiscally prudent to avoid immediate spending and put some more in the “rainy day (contingent fund)”

We wonder why the town manager didn’t recommend using the windfall revenue to eliminate the utility tax on the citizens? This is the same tax the Majority-4 doubled to fund shortfalls when they first came to office.  They were supposed to give it back. They never did.

How about getting input from the citizens on where to spend their money?

Tuesday, April 22, 2014

Heather's Corner: British Nobilty Cloaks Oro Valley Historic Property

There is an area of Oro valley called Suffolk Hills. It's name is derived from an interesting source. It's a piece of our local history that involves an Earl, a wealthy duchess, and the Viceroy of India. It is a most fascinating modern fairy tale that one could imagine.

Born in 1879, Margaret Leiter was youngest daughter of Chicago businessman Levi Ziegler Leiter who co-founded the Marshall Field & Company retail empire. Levi sent all three of his daughters to private boarding schools in England. After his death, they inherited a $48 million estate.

Margaret’s eldest sister Mary married the British Conservative statesman George Curzon, later 1st Marquess Curzon of Kedleston, who was Viceroy of India in the late years of the nineteenth century. It was while visiting her sister in India that Margaret was introduced to the Viceroy’s aide-de-camp Henry Molyneux Paget Howard, 19th Earl of Suffolk, 12th Earl of Berkshire. They were married in December 1906. Henry & Margaret had three children.  The Earl was killed in World War I at the Battle of Istabul in April 1917, serving as a major in the Wiltshire Battery, 3rd Wessex Brigade, Royal Field Artillery.

It is not certain why Margaret came to live in Arizona preceding his death, although it is known that she accompanied an Englishman by the name of Colonel Gillette who had respiratory problems, so climate may have been a major factor. In 1934, using the assumed name Marguerite Hyde, the Countess bought the land to the north of Westward Look & east of Oracle Road.

A local architect known for his modern designs, Richard A. Morse, began the task of possibly the first modernized architecturally designed home lacking in the typical characteristics of homes seen in Tucson at the time. In fact it was such a departure from the typical that it became nationally published in the book "The Modern House in America," in 1940 and in "Architectural Record Magazine," in 1941. She called the five bedroom house “Forest Lodge” as it was surrounded by citrus groves. She used the house as her winter residence; spending around four months each year there.

In 1954 she sold the property because she felt city development was encroaching on her property. The mansion eventually sold to Sisters of Immaculate Heart who started a school that still operates today. The caretaker’s building became the school office. Stables were converted into classrooms. The former garage now houses sixth-grade classes, and the mansion house itself is still home to eight sisters.

An interesting end to the story.

Margaret bought 3,500 acres in the Nortwest foothills of Santa Catalina mountains in the town of Oracle. This Suffolk house nestled against the mountains was lavish in design and remained her residence until her death in 1968. Motorola bought 300 acres and then donated the land to the University of Arizona in 1980. In 1984, the University sold this land to a group called Biosphere Ventures for $3.4 million and in turn created the one-of-a-kind experimental terrarium.

If you haven't had the opportunity to experience some of this history, take a drive around the area and wave to the sisters in the school yard of Immaculate Heart.  And if you're inclined to, stop off at their little store along the roadside, "The Cottage," and donate some items or search the shelves for second-hand treasures. All proceeds go toward the school.

Want to learn more?
Heather Nenadovich has lived in Oro Valley a total of five years. She has a B.A. in Psychology from the University of Arizona. Her husband is Canadian so she is a hockey fan by default and so are her two very clever children. When not being a mommy, she enjoys hiking in Catalina State Park, hand building pottery, and gardening. Her favorite things about living in Oro Valley are the towns recognition of art and culture, their commitment to preserving nature and the Christmas parade. (Also anything from GMG Chinese Bistro.)

Monday, April 21, 2014

Hiremath Castigates Garner For Going Public With Issues Regarding Oro Valley Police Spending

Last week was an extremely busy week for The Oro Valley Police Department.  The department arrested and charged a youth who was brandishing a wooden marching rifle in Kreigh Park.  The charge is a felony charge.  The department arrested two individuals for  allegedly providing prostitution services at an Oro Valley Spa.

At the end of the week, the department found itself defending some of its practices in an article that was published in the Arizona Daily Star.   The Daily Star's reporter, Phil Villarreal, spoke with council members Garner and Zinkin  regarding their claim that police department operations could be more efficiently run at less cost.   He also spoke to Chief Sharp and Mayor Hiremath.   The mayor and the chief both defended the practices of the department.

The article prompted one Oro Valley Resident to write a spirited email to the mayor and council members.  In it, the individual voice dismay over the need for overtime and take-home cars.    Resident seemed generally surprised.  Apparently, the writer of the email has never read our publication.

Later in the week, Mayor Hiremath wrote a seething one paragraph email to many accusing council member Garner of attacking town employees; and of not following "protocol" by going public with his concerns.

Apparently Mayor Hiremath does not have the self-control to stay above the fray.

Council member Garner has served the town on council for more years than Mayor Hiremath.  Garner knows what is right thing to do for the people of Oro Valley.

We spoke with council member Garner.  We asked him the intent of his remarks.  His response was simple:  "I work for the people of Oro Valley.  They are my only constituents."

We  applaud council members Garter and Zinkin for standing up for the people. They are not allowing the council to ignore its responsibility to provide oversight to the police department.  We have not been able to identify one instance during the past four years in which Majority-4 exercised the role that they have been charged to do in regards to the oversight of the police department. It is only Garner and Zinkin who provide this oversight.  And for this the Mayor castigates them.

As council member Zinkin notes in his comments in the article, none of this disclosure would be needed if the chief of police reported to the town manager as is the practice in every other community in Arizona.

Some will accuse Garner and Zinkin of being anti-police.  They will accuse them of threatening the very safety of the community by merely asking questions.

Garner and Zinkin are not anti-police.

Garner and Zinkin are pro-Oro Valley Resident.

What do you think?

Friday, April 18, 2014

Bits and Pieces


Oro Valley State Representative Adam Kwansman made the most bizarre appeal to his colleagues this week.  In supporting a bill that would allow state single family homeowners to keep poultry at their homes, Kwansman begged fellow legislators to pass the bill because it would be good for his relationship with a girl.  Was he joking? Who knows?  (Source)
Oro Valley Elections: Always Rancorous

We thought you'd enjoy this old-time negative campaign add that appeared in the local advertising circular in 2004. The advertisement "names names" and "fear mongers."

"Oro Valley Candidates 2004 and the town council candidates they support are driving down the road to property taxes. By opposing commercial development in Oro Valley, they are cutting off sales tax revenue that Oro Valley needs to fund critical services."

With ads like this, it is no wonder that only a few want to run for town council or mayor.  Who would want to deliberately set themselves up for this insanity?

Fact is, the thing that will drive Oro Valley to the need for property taxes is the drastic over expansion of the town budget, an over expansion like Oro Valley is going to see in 2014-15

Wednesday, April 16, 2014

Does Oro Valley Government "Want It Both Ways?"

The most key assumption underlying a budget is the assumption about the economy.  In this case, is the Oro Valley economy robust or is it still recovering from the recession?

Oro Valley's Town Manager Caton's proposed 2014-15 budget most certainly assumes a robust economy.  Caton presents a budget that projects robust revenue growth.   His plan is to spend it all.   As our colleague John Musolf posted Monday, Caton plans a diminimus increase in the contingency fund.  Caton is not going to put aside funds for a rainy day in 2014-15.  No.  Caton wants the town to spend virtually all of the revenue increase, an increase of 14% over prior year.

This assumption of a robust Oro Valley economy is in stark contrast to that presented to council at the regular session meeting January 15. Oro Valley Economic Develop Manager, Amanda Jabobs observed:
"The economy is beginning to recover. But we have not fully recovered. And we won’t in the next year.”  According to a UA economist, she noted, the recovery remains painfully slow by historical standards."  (January 15, 2014 Item 8 discussion.)
Jacobs reports to Town Manger Caton.  Certainly, he must have reviewed and approved such an important comment.

At that same meeting,  Oro Valley Mayor Hiremath voiced his opinion on the economy, concurring with Jacobs:
"We are no where close as a nation or close as a town to being out of this recession. So though we may have substantial growth over a prior year, it is a relative issue based on pre recsssion times." (January 15, 2014 Item 8 discussion.)
So, we ask, what has changed so dramatically in the past 3 months to cause the town manager to assume a robust economy?  Because, for all we see, which includes a jobless recovery, a continued rock bottom interest rate policy that has failed to stimulate investment, and a now stuttering stock market, the recovery, if there is one, is very tepid and very fragile.  

Is the economy still in recession as the mayor and the town economic development manager asserted three months ago in support of extending a temporary A-Frame permission for 2 years?  Or during this three-month period has the economy radically changed allowing the town to spend a substantial increase in forecasted revenue? Is it possible that the projected revenue increase is a mirage?  Much of it is from economy-sensitive construction fees. These are one-time revenues.

If indeed the economy has recovered, then there was no need to extend the A-frame policy in January.  Mayor Hiremath asserted that it was precisely because there was a slow recovery that this "special favor" be granted to business.

If, on the other hand, the Oro Valley economy is in recession, as Hiremath and Jacobs asserted in January,  then a 14% increase in spending is fiscally irresponsible.

If, indeed, Mayor Hiremath agrees with this extensive spending increase, then he should recommend that the temporary A-Frame policy be rescinded.  He should also recommend giving the community back the doubling of the utility tax he championed in 2010.  After all, in order to agree to a 14% spending increase he would most certainly have to acknowledge that there is no longer a recession; thus, the A-Frame sign relief and the double utility taxes are no longer needed.

Mayor Hiremath has not publicly opined on the budget.  Will he support such massive increased spending or will he advise caution, as his remarks in January would indicate?  We shall see.

In the meantime, it appears to us that we are witnessing a situation in which town government assumes one set of economic assumptions to serve one purpose and then a opposite set to achieve another purpose.  Perhaps they "want it both ways."

Tuesday, April 15, 2014

Heather's Corner: You Won Believe What Oro Valley's Got Going On

I'm sure many of you are familiar with the Great American Playhouse.  If you aren't or if you haven't yet experienced it for yourself, have I got a treat for you.

Located at 13005 N. Oracle Rd., in what once was a grocery store, lies what I have found to be this far, Oro Valley's most enjoyable hidden gem. Once greeted at the door you are brought inside a creative, and surprisingly very talented, world of live theatre acts, pianist extraordinaire, and a encore second act variety show called, "The Olio," that combines wit, humor, and audience participation.  Did I mention they offer a generous menu with time honored favorites like pizza, meatball subs, and ice cream? You can sip on a cool glass of beer too all whilst being in the presence of a "family-oriented" entertainment and all age appropriate show. Are you sold?!

My family and I attended a Saturday afternoon show a few weeks back. We were astounded that we hadn't stumbled upon it before. We brought with us two four year olds who enjoyed the sing-a-longs, wild costumes, and props while the adults shared laughs in humor you can only appreciate with age on your side.

It was a good time to be had by all. The four year olds are still talking about it to this day. And as I previously mentioned their talented cast, the musical director/pianist, Mike Padilla, has played musically in various settings, most notably in San Francisco's Top of the Mark and The Fairmount Hotel. Hubba, bubba!

The shows change every few months or so, which give you an opportunity to enjoy the same show or experience a new one. Currently they are performing "Quest of the Caveman," which promises to be a delight for the young and young at heart. So grab the family and settle in for a delightful afternoon or evening of fun and entertainment. But if all else fails and you are one of those naysayers who can't fathom the idea of a one stop shop variety show the whole family will enjoy, you can always just fill up on the bottomless free popcorn they serve. Either way, it's a win-win.
Heather Nenadovich has lived in Oro Valley a total of five years. She has a B.A. in Psychology from the University of Arizona. Her husband is Canadian so she is a hockey fan by default and so are her two very clever children. When not being a mommy, she enjoys hiking in Catalina State Park, hand building pottery, and gardening. Her favorite things about living in Oro Valley are the towns recognition of art and culture, their commitment to preserving nature and the Christmas parade. (Also anything from GMG Chinese Bistro.)

Monday, April 14, 2014

John's Place: Oro Valley Plans To Add Little To The Contingency Fund

At the April 2, 2014 Town Council Meeting The Town Manager's Recommended Budget for fiscal year 2014/15 in the amount of $107. 1 million; a $13.2 million, or 14.1% increase from the Adopted FY 2013/14 Budget totaling $93.9 million was presented.

The budget has received no citizen input.  There is, for example, no Oro Valley Finance and Bond Committee to review the budget.  There was no citizen input allowed at the April 2, 2014 council presentation or a subsequent budget study session held on April 9, 2014.  It is, therefore, the job of each Council Member to represent the citizens.

This budget is being presented as 'balanced' or 'provides a surplus.'  Yes. The budget is that. However, it is also a 14% increase over prior year, a fact that only LOVE has reported.

Why is a 14% increase problem?  It is a problem because the increase is based on a robust set of increased revenue projections. The assumption is that the economy will be robust.  The expectation is that construction fees will be robust.

We've been through the "boon-bust" cycle countless times.  We know that: "What comes up, must go down."  We also know that it is extraordinarily painful for the public sector to reduce spending.  It is, after all, not their money. It is your money.

Oro Valley's method of budgeting does not challenge each expenditure. Rather, it adds an increase each year.  It challenges only the increase, not the baseline spend.  Thus, a budget once set becomes the baseline for the future.  In essence, the 14% increase becomes a permanent cost to the citizens of Oro Valley.

It is the boom-bust cycle that requires fiscally responsible individuals, company's and public sector operations to build surpluses.  Oro Valley calls these surpluses a "contingency fund." In Oro Valley, it is build from general fund revenues.

Most of our citizens are not aware of Oro Valley's "contingency fund".   Oro Valley's councils have set a minimum 25% ratio between the operating fund expenditures and the contingency fund balance.

The contingency fund is a buffer for unexpected financial problems. It is also a means to set aside funds for specifically designated future projects.  It is like an individual's savings account.

A contingency fund is also used to manage risk.   In the public sector, there are two such risks. One, is the risk of a shortfall in revenues. The other is the risk of unexpected events.  For example, it is often used for risk management when an exceptional risk that, though unlikely, would have disruptive or catastrophic consequences.

This proposed budget is yet another year in which there will be little addition to the "contingency fund."

Given the the history of the majority-4 on council, 2014-15 could be another year in which they raid the contingency for some "unforeseen reason." The majority-4, with the consent of some other council members, took funds from this fund over the years to:
  • They authorized the use the of $2.1 million in contingency reserve funds to underground utility lines along Oracle and Tangerine roads in a three-project proposal brought forth by Tucson Electric Power. There was an ordinance that required “undergrounding” so it was an emergency.
  • They authorized $500,000 to aquatic center upgrade project
  • They raided the fund to build two multi-purpose fields in Naranja Park
The estimated year-end contingency reserve balance in the General Fund for FY 14/15 is $10.1 million. The good news is that this is about 31% of the recommended expenditure budget. The bad news is that it should be more, given such a vast expected increase in anticipated revenues.

Next week: Our take on the Oro Valley's most discretionary fund, the operating fund.