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Oro Valley manager recommends $130 million budget, $26.6M in next-year CIP with water and streets topping the list
Summary
Town staff presented a $130 million manager's recommended FY27 budget and a $26.6 million capital improvement program emphasizing water system work and street preservation; much of next year's CIP is carryover from previously approved projects.
Mayor Winfield opened the Oro Valley Town Council budget study session on May 4 and turned the meeting over to Chief Financial Officer Dave Gephardt, who presented the manager's recommended FY27 operating budget and a 10-year capital improvement program. Gephardt said the total recommended budget is approximately $130,000,000 and that proposed CIP projects for the coming fiscal year total about $26,600,000, down from $44.5 million in the current year.
Gephardt said the recommended CIP concentrates spending on the water system and streets: "31% of the town's CIP budget is being spent on water infrastructure, driven by the Northwest Recharge Recovery Delivery System projects," and that water and streets together account for much of the program. He added that carryover projects represent "a little over 50% of the total CIP budget for next fiscal year," meaning many line items are continuations of previously approved work.
The presentation broke the CIP down by function. Parks and recreation projects total about $3.43 million and include $375,000 for JDK north parking-lot improvements and $2.0 million for the Vistoso Trails Nature Preserve pond. Public safety projects are budgeted at roughly $2.43 million and include remediation and design for police headquarters and a $170,000 drones-as-first-responder program. Technology, vehicles and facility projects total roughly $3.56 million and include server, equipment and vehicle replacements.
Council members pressed staff for additional detail in several areas. Councilmember Murphy asked whether staff could produce a bundled estimate if the council wanted to expand the JDK north lot; staff said the $375,000 estimate currently covers the existing asphalt only and offered to prepare a separate estimate for expansion. Vice Mayor Barrett asked for clearer life-cycle operating-cost lines for significant CIP investments so council can see future maintenance obligations; Gephardt agreed to add that analysis.
On the operating side, Gephardt said townwide revenues are projected at about $109.4 million, with roughly half coming from sales tax and state-shared revenues and 18% from water sales. He noted continued softness in construction-related local sales taxes since 2022 and said the manager's recommended budget maintains a 25% general-fund reserve while meeting operating needs.
Gephardt said staff imposed a 0.5% reduction target to department O&M budgets where possible and is not proposing any new full-time positions for FY27. He described key cost drivers as higher medical insurance claims, election costs, software license renewals and increased utility charges tied to new or expanded facilities. Gephardt also told council he will present a recommendation to the Budget & Finance Commission about aligning construction and use-tax revenues with the capital fund to protect one-time revenues for one-time projects.
The council recessed briefly and then continued detailed fund-level presentations. Gephardt closed the session by saying the budget is structurally balanced and staff is available for follow-ups; Mayor Winfield thanked the budget team and adjourned the study session.
