Council reviews proposed use tax, telecom tax, commercial rental tax and department fee increases; public outreach planned

Town staff presented a package of proposed revenue measures and fee updates during the June 18 study session, including three new local tax options (use tax, telecommunications tax and a commercial rental tax) and department-level fee proposals for stormwater and parks & recreation. Staff said the proposals are intended to address long-term capital needs, public safety and pavement preservation. The council did not vote on any ordinance; staff will carry out additional public outreach in July and return with refined proposals this fall.

Finance: Chief Financial Officer David Gephardt reviewed town revenue trends and said operating costs, especially personnel and O&M, are growing faster than operating income over the five-year forecast. He presented three potential new local revenue categories that Oro Valley does not currently levy: a use tax (to capture out-of-state purchases), a telecommunications tax (primarily on cellular service), and a commercial rental tax (to cover commercial rentals and self-storage). Gephardt said estimated revenue ranges depend on the tax rate chosen and that staff proposed restricting any new tax revenue primarily for capital needs, not ongoing operations. Council members asked that staff refine the revenue estimates and said they want the public outreach material in advance of July engagement sessions.

Stormwater: Public Works/Engineered Systems staff and the Stormwater Utility Commission outlined a proposed increase in the stormwater monthly charge. The commission recommended raising the equivalent residential unit (ERU)-based charge by $2 per month (from $4.50 to $6.50 per ERU), a roughly 44% increase, to generate about $651,000 per year and to fund an ongoing CIP and match requirements for grant-funded flood projects. Staff said construction costs have risen roughly 60% over the past decade in key line items and that many stormwater projects are aging and need capital funding. Staff and commissioners said they prefer a stable, dedicated revenue source rather than reliance on uncertain grant funding. Council members asked whether a phased increase (smaller annual steps) would be possible; staff said that approach could be considered and asked for council direction following outreach.

Parks & Recreation: Deputy Director Matt Jankowski presented proposed membership and rental fee changes for the Community and Recreation Center, the Oro Valley Aquatic Center, Steampunk Ranch and Steampunk Ranch event rentals, archery memberships and field rental rates. Staff noted some fees had not been adjusted in more than a decade; proposed changes include resident/nonresident differentials and peak/non-peak pricing adjustments. Parks staff estimate the combined fee package could generate approximately $400,000 annually. Several council members said incremental increases over multiple years could reduce rate shock; staff said they had engaged user groups and that the proposed schedule provides time for groups to plan.

Public outreach: Staff outlined planned outreach including three July virtual engagement sessions, targeted outreach to the Chamber and boards/commissions and further meetings with user groups; staff will return to council in October with refined proposals and seek any ordinance direction by mid-October. The stormwater rate, because of statutory notice requirements, must follow a specific ordinance and public hearing schedule that staff will implement if council directs.

Ending: Councilmembers emphasized the need for clear public communication, requested draft outreach materials in advance and suggested staff consider phased or incremental increases where feasible.