Development News for Oro Valley, Arizona

Oral Valley Town Council Reviews Tentative Budget of $127.99 Million for FY 2026-2027

The Town Council reviewed and discussed the tentative budget for Fiscal Year 2026-2027, which totals $127.99 million. This represents a decrease of $2.1 million from the manager's recommended budget and a $23.5 million decrease from the current year's adopted budget. The general fund portion of the tentative budget is $55 million, a slight increase of 0.1% from the manager's recommendation and 0.7% higher than the current year's adopted budget. The budget is structurally balanced, with ongoing revenues covering ongoing expenditures, and remains well below the state-mandated spending limit of $179.8 million. Key components include personnel and operations & maintenance (69% of the townwide budget), capital (18%), water (24% of the general fund), and administrative services (23% of the general fund), which includes debt service (7% townwide) and self-insurance trust funds. Sales taxes and state shared revenues constitute 43% of total sources, with water sales at 15%. The Capital Improvement Plan (CIP) for next year is $24.2 million, with the water utility NERDS project being a significant portion. The council also discussed personnel costs, with a 3% general wage increase estimated to cost approximately $625,000 townwide for eligible employees. The general fund reserve is projected to be approximately $16.8 million at fiscal year-end, exceeding the 25% policy requirement. The council also discussed Marana's budget structure for comparison, noting its higher percentage of debt service. The tentative budget was approved for further consideration.

Oral Valley Approves Modest Increase to Water Base Rates to Cover Rising Operating Costs and Maintain Reserves

The Town Council discussed and considered a resolution (R26-29) to increase potable water base rates for the Oral Valley Water Utility. The proposed increase is solely to the base rate for drinking water, affecting 84% of customers with 5-8 inch meters, amounting to an average monthly increase of $1.86 (3.6% total bill increase). Reclaimed water rates and drinking water commodity rates will remain unchanged. The increase is driven by rising operating expenses, including personnel, operations & maintenance, power, and CAP water delivery costs, which are up $900,000 (5.94%) from last year. The utility aims to keep overall rate increases between 3-5% annually. The proposed increase is necessary to maintain required cash reserves, which are projected to be $4.7 million with the increase, exceeding the $3.7 million requirement. The utility is also facing potential CAP water allocation cuts (expected 20% starting January), which could lead to higher water costs. Oral Valley's proposed rates remain competitive compared to neighboring municipalities. The increase is scheduled to take effect July 4th and appear on August bills. The council unanimously approved the resolution.