Oro Valley finance chief: parks and community center finances solid as golf revenue outperforms budget

Dave Gephart, the town chief financial officer, told the Oro Valley Parks & Recreation Advisory Board on Feb. 17 that the community center fund is performing close to expectations and that golf operations have outperformed budget in the first half of the fiscal year.

"When you take out that $593,000 and you look at the total revenues the Community Center Fund has brought in, it shows 58%. When you take that $5.93 out, we're at 49.31%," Gephart said, explaining how council action to migrate a half‑cent sales tax to the general fund affects midyear comparisons.

Gephart said contracted operating revenue — driven largely by golf and food‑and‑beverage activity — is ahead of the prior year and budget. He reported contracted revenue of about $2.85 million through the first six months compared with $2.6 million the prior period, and a town year‑end revenue estimate of about $6.6 million for the fund. He also said the community center beginning fund balance was $2.92 million and staff currently anticipate an ending balance around $640,000.

Board members questioned whether fee increases passed by council had chased away users; Gephart said the fee change is forecast to add roughly $200,000 in revenue and that internal staff estimates differ on the final year‑end forecast. "I think our estimate is lean, and I think it has room to come up," he said.

The CFO flagged an operational issue that had been driving higher costs: credit‑card merchant fees. He said the town renegotiated its merchant contract after large fee increases and expects fees to fall going forward. "These fees are going to drop through the floor and they already have, honestly," Gephart said, adding the town negotiated a one‑year contract to preserve flexibility.

Golf was described repeatedly as the primary revenue driver in community center results. Gephart said golf operations are already at about 51% of budget halfway through the year and that the department expects to outperform last fiscal year’s results. On an operating basis he reported a net operating loss figure in the packet (a $67,749 net operating loss through the first six months) but emphasized that revenue improvements and capital timing have driven substantial year‑over‑year improvement.

The presentation included discussion of debt‑service transfers tied to parks and recreation obligation bonds and the effect of moving the half‑cent sales tax into the general fund; Gephart said those debt service obligations migrated with the revenue source. He also outlined three high‑level options for how the town could treat golf financially going forward: leave it status quo, set it up as a special revenue fund, or establish an enterprise fund — each option has tradeoffs around accountability, reinvestment and comparability of historical results.

Board members raised policy concerns about separating golf from other parks and recreation priorities. "I worry that golf would become, like, golf, where there's so many more people who are not golfers to serve," one member said, urging that revenue be used to support broader community benefits. Gephart and others said any structural change would be a Town Council decision and that staff would continue to refine the strategic and accounting analyses.

The board did not take formal action on fund structure at the Feb. 17 meeting; Gephart said staff will continue analysis and bring options forward to the Budget and Finance Commission and, ultimately, council if directed.

Next procedural step: staff will continue budget forecasting and present follow‑up materials in subsequent quarters and to advisory commissions before any council decision.