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Oro Valley ends fiscal year $2 million in the black

September 19, 2017

The Town of Oro Valley has ended Fiscal Year 2016/17 in a strong financial position while continuing to make valuable investments in our community. In the General Fund—the Town’s main operating fund—the ending fund balance increased by nearly $2 million to total $12.5 million, which is a strong 37 percent of the year-end expenditures in that fund for Fiscal Year 16/17. This is above the Town’s adopted policy minimum threshold of 25 percent of expenditures and is the highest the fund balance has been since Fiscal Year 2012/13.

General Fund
Contributing factors to this strong financial position in the General Fund—the Town’s main operating fund—include increased revenues from local development activity, strong consumer confidence trends, sports tourism activities drawing visitors to the community, and responsible control over spending by Town departments. The Town issued a total of 339 single family residential building permits during the fiscal year, which was significantly higher than the budgeted amount of 230. Local sales tax collections in the General Fund for the fiscal year totaled $17.1 million, which was $1.4 million, or 9 percent greater than the budgeted amount of $15.7 million. Overall department spending came in just under $900,000, or 2.5 percent, below the budgeted amount of $34.9 million.

Highway Fund and Bed Tax Fund
In the Town’s other main tax-based funds—the Highway Fund and the Bed Tax Fund—total revenues came in over budget, and expenditures ended the year under budget, with year-end fund balance amounts exceeding projections.

Community Center Fund
The Community Center Fund tracks all revenues and expenditures associated with both the Town-managed operations of recreation and fitness, and the Troon-managed operations of golf, food and beverage and tennis. Overall, total expenditures in this fund exceeded total revenues by more than $600,000 at year-end, which is a significant improvement from a difference of $863,000 in the previous fiscal year. This shortfall reduction was achieved through actively reducing operating expenditures where possible and increasing revenue through competitive golf rate packages, enhanced food and beverage offerings and strong growth seen in the fitness and recreation membership and program areas. This trend of reduced losses is expected to continue in this fund as the Town explores additional opportunities to reduce costs and grow revenue in all operating areas of this fund.

Significant capital investment at this facility continued during the fiscal year, with the issuance of $2 million in bonds to fund energy efficiency improvements, with the costs of this project fully paid for by the resulting energy savings.

Fiscal Year Highlights
During Fiscal Year 2016/17, the Town successfully completed many projects and celebrated the following achievements:
• Held several special events in the community, including the annual July 4th celebration, Holiday Tree Lighting Celebration, seasonal festivals at Steam Pump Ranch, Oro Valley Festival of the Arts, and several music concert series programs
• Approved the Your Voice, Our Future General Plan, which was successfully ratified by voters in November 2016
• Adopted the 2017 Strategic Plan
• Adopted a balanced budget for Fiscal Year 2017/18 in the amount of $128.6 million, reflecting the community’s values and priorities
• Completed design of the La Cholla roadway widening project
• Completed the La Cañada/Moore intersection study
• Secured regional funding for a traffic signal light on La Cañada at the entrance to the Community Center
• Completed the Town’s annual pavement preservation program, including multi-use paths
• Offered more than 36,000 hours of service and more than 568,000 miles via the Sun Shuttle Dial-A-Ride transit service
• Received Certificate of Achievement for Financial Reporting Excellence, Distinguished Budget
Presentation Award and Popular Annual Financial Reporting Award from Government Finance
Officers Association
• Adopted a new hands-free driving ordinance to increase public safety in Oro Valley
• Successfully refunded $14.3 million in outstanding excise tax revenue bonds at a lower interest rate, resulting in overall interest savings of nearly $1.1 million
• Increased efficiencies in the development review process while maintaining public participation, through consolidating the Conceptual Design Review Board and Planning and Zoning Commission
• Received a seventh consecutive Playful City USA community designation
• Hosted three national level synchronized swimming competitions at the Aquatic Center
• Received the Educate and Enforce Award by the United States Department of Transportation as part of the 2016 Mayor’s Challenge
• Received the Governor’s Office of Highway Safety funding for six DUI breath detection devices, six speed detection devices and a $30,000 reimbursement for DUI enforcement overtime
• Delivered a total of 3.03 billion gallons of water to our customers, and took 4,191 water quality samples with all results meeting regulatory requirements

In summary
Overall, cash balances in all funds within the Town budget increased by nearly $3.8 million during the fiscal year. Maintaining strong cash reserves protects the Town during emergency situations and in instances of revenue shortfalls during economic downturns. Strong cash balances also help the town in maintaining its excellent investment-grade bond ratings, which are currently ‘AA’ from Standard & Poor’s, and ‘AA-‘ from Fitch Ratings.

To learn more about the Town of Oro Valley’s budget and financial position, visit the Finance Department’s web page at www.orovalleyaz.gov.
 

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