Oro Valley staff report lower-than-expected revenues through December and project personnel and transfer savings

Town staff told the Oro Valley Budget and Finance Commission on March 19 that preliminary, unaudited financial results through December 2024 show lower general fund revenues and projected savings on the expenditure side.

“Our amounts, our actuals, and our estimates are both preliminary. They’re obviously unaudited,” staff member Wendy said when she began the presentation, cautioning that year-end results could change. Through December, general fund revenues were at 47% of budget and about $1.7 million (roughly 6%) below last year, she said; the two largest revenue sources—local sales tax and state-shared revenues—were down year over year.

Construction sales tax was the largest driver of the local sales-tax decline, falling about 25% compared with the prior fiscal year, staff reported. Retail sales tax growth and remote-seller categories were weaker than in prior years, and officials said holiday sales were not yet fully reflected in the December figures.

On the expenditure side, staff reported estimated personnel savings of about $970,000 driven by turnover, lower replacement salaries and some vacancies. Operations and maintenance (O&M) spending is projected to come in about 3% below last year with expected savings of roughly $400,000 across departments. Transfers out to other funds are forecast to be slightly lower than budgeted—year-end transfers are estimated at about $9.192 million compared with a budgeted $9.4 million.

Because of projected expenditure savings, the town estimates a use of general fund balance of about $2.5 million for the fiscal year versus a budgeted use of roughly $4.1 million. Ending general fund balance is estimated at about $19.6 million, which staff noted would exceed the council’s 30% reserve policy by about $4.3 million.

Staff also reviewed other funds: - Highway fund: Revenues flat when transfers are excluded; some capital transfers were needed to supplement pavement-preservation activity. Highway user revenues are on budget. - Community Center fund: Revenues are up roughly 4% year over year. Golf rounds were reported up 8.4% year over year and nearly 9.8% above budget; the fund is expected to add to its balance and end the year near $2 million. - Capital fund: Capital outlay through December was about $2.5 million and is expected to accelerate in the second half of the fiscal year; planned transfers to grants and other funds will be posted at year end and will depend on actual grant awards. - Water utility fund: Water sales are projected about 1.2% below budget because consumption trends are lower; interest earnings are expected to exceed budget by roughly $200,000. Meter replacements are expected to drive higher capital spending in the water fund. - Stormwater fund: Revenues expected to end on budget; two capital projects noted (Sierra Wash at Via Mandarina and Oro Valley Country Club drainage and pavement improvements); ending fund balance estimated about $756,000.

Staff emphasized that many figures remain preliminary and unaudited and that the March financials will reflect payments and billings posted after December.