Budget commission hears FY23-24 financial update; Oro Valley reports $1.6 million WIFA water grant

The Oro Valley Budget and Finance Commission on May 21 heard a fiscal-year-to-date financial update that showed stronger-than-expected revenue performance and reported a WIFA grant for the town's water department of roughly $1.6 million.

Wendy Mack, the town's director presenting the update, told commissioners that overall sources across major funds are up about 7% year over year, driven largely by increased state-shared revenue. "All of the amounts, the year end estimates, the actuals are preliminary. They obviously are unaudited and subject to change," Mack said, emphasizing the figures are estimates rather than final audited results.

Mack said the general fund is projected to finish the year with an ending balance of about $21 million, roughly 42% of budgeted expenditures — well above the town council's 30% reserve policy. She attributed a significant portion of the positive variance to higher state shared revenue, stronger-than-expected interest income and a rebate from the Arizona municipal retention pool. "Our revenues and expenditures overall on our funds are performing well compared to budget," Mack said.

Staff liaison Mr. Gebhardt briefed the commission earlier in the meeting that the town had received "a WIFA grant award for our water department of a little over $1,600,000," and that the town manager's recommended budget has been distributed. Gebhardt said the tentative budget is planned for presentation to town council on June 5 and noted a water-rate increase is already on the June 5 council agenda. He added that the Path Forward survey results will be presented when scheduled; he said three survey instruments were used and the phone survey is the statistically valid instrument.

Commissioners pressed for context on several items. One commissioner asked why operations and maintenance lines showed only about 62% spent through March while year-end estimates project higher percentages; Mack said departments often incur additional spending late in the fiscal year and that staff build conservative cushions into year-end estimates. Another commissioner raised concern that several funds show budgeted spending higher than revenues over the long term; Mack replied that planned uses of fund balance are attributable to one-time needs and that staff and council will review the CIP and other revenue options, including potential bond financing for major infrastructure items.

On the highway fund Mack said higher year-over-year sources through March largely reflect a budgeted transfer from the capital fund; the fund is expected to come in roughly on budget, with capital work (mill and overlay projects and pavement preservation) driving higher uses. In the community center fund Mack reported stronger contracted operating revenues, increased member dues and recreation activity, projecting a favorable year-end variance and a year-end balance increase rather than a drawdown.

Mayor Windfield, speaking as council liaison, said the Path Forward presentation likely will move from June 5 to June 19 and highlighted the recent Naranja Park grand reopening, including the town's RC Field and the pump track. The commission did not take any formal budget actions at the meeting; staff will present the tentative budget to council as planned.

The commission asked staff to continue refining year-end estimates and to present additional context about capital needs and financing options as the tentative budget proceeds to council.