Overview
David, the town’s Chief Financial Officer, walked residents through how Oro Valley’s finances work. He pointed people to three documents on the town website: the monthly financial report to Council, the annual budget (draft, going online within a week or so), and the 148-page Annual Comprehensive Financial Report (ACFR). The town also publishes a Popular Annual Financial Report and a two-page budget summary.
The finance team
- Eight full-time employees, a fraction of Marana’s staff, yet the town produces more reports.
- A five-member citizen Budget and Finance Commission advises Council monthly.
- The town has earned the GFOA “Triple Crown” (budget, ACFR, and popular report awards) for 14 years, which he says is rare in Southern Arizona.
Why the budget matters
The budget gives the town its legal authority to spend (appropriations). GFOA says a budget should work as a policy document, an operations guide, a financial plan, and a communications tool.
Fund structure
- The town runs about 16 to 17 funds, each a self-balancing set of accounts, so residents can see how restricted money is used.
- Types include the General Fund, a debt service fund for non-enterprise debt, enterprise funds (water and stormwater, expected to cover 100% of their own costs), capital project funds, special revenue funds (Highway Fund for gas tax money, Community Center Fund), and an internal service fund for employee medical self-insurance.
- Investments follow Arizona law, meaning safe instruments like Treasuries and high-rated corporate bonds.
- Independent CPA audits go to the state Auditor General.
- Oro Valley has no financial relationship with Pima County beyond minor agreements like the library.
The budget
- The adopted budget is $128 million, down from about $151 million last year, mostly because of lower capital spending.
- Debt is about 7% and carries rates below current inflation.
- Most of the budget is operations and personnel.
- Police are the top priority, followed by Public Works (roads, fuel, facilities). IT spending has grown over the last five to six years and sits under Administrative Services.
- Benchmarking against Marana or Tucson can mislead, since those cities offer services Oro Valley doesn’t (sewer, housing, transit).
Revenue
- Local sales tax is the largest source, and state revenue sharing (income tax, sales tax, gas tax, vehicle license tax) is second. State sharing is population-based, so faster-growing places like Marana and newly incorporated San Tan Valley take a bigger slice of a fixed pie.
- Oro Valley has no town property tax, no grocery tax, no telecom tax, and can’t tax residential rentals under state law.
- A use tax (2.5%) passed Council in June and took effect July 1. It applies mainly to businesses buying equipment or inventory out of state, and it levels the field for local sellers.
- A commercial rental tax went to Council but wasn’t approved.
- Water sales are the fourth-largest source at about 15%.
The core problem
- Revenue is flat while costs climb. Pavement preservation costs are up about 300% since 2019.
- Over five years, retail sales tax grew 4.6%, construction tax fell 60%, utility tax rose 12%, restaurant and bar tax rose about 14%, hotel and motel tax fell 5.3%, and remote seller tax rose 16.7% (the best performer).
- Transaction privilege tax totaled about $28.8 million last year, down $1.1 million (3.8%) while inflation ran 3.5%. Total General Fund revenue was down 2.15%.
- The town is about 94% built out, so growth won’t fix this.
- Full-time-equivalent staffing has been flat for four years, with no new hires projected for five. The one exception is a possible police substation if the town annexes toward Rancho Cañada.
- The strategy is to diversify revenue and hold personnel steady.
Maintaining Financial Stability and Services
Finacial Reports
Know Your Town’s Budget
OV Path Forward – Financial Goals
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