Marana's Fiscal Fiasco
Marana Town Council conducted a Study Session last night (10/13/20) and the top item was a discussion on Infrastructure Funding. Here is the link to the Infrastructure Funding Powerpoint Presentation. I requested to ask questions after the presentation but was denied.
Incredibly, we learned that Marana has committed to seven projects totaling $103.8 million and only $18.9 million is available to pay for these commitments! This leaves a funding gap of $84.9 million. See table below.
To fund this $84.9 million gap, there were a few proposals but the top proposal supported by most current town councilpersons is use of reserve funds and a sales tax increase! As you may recall from Lease-onomics Part I, Marana gets the bulk of its revenues from taxes and hardly any from property taxes. The table below shows one method of using reserve funds and an increase in sales tax to fund these projects.
Please note this $84.9 million funding gap only covers the projects Marana has committed to and does not include any other future infrastructure projects. Where is that money coming from?
All of this is very alarming! Here are six take-aways:
First, how on earth can a municipality commit to spend $103.8 million without the funds to support the expenditures? Most well-run towns/cities have an approved long-term capital improvement plan with an associated funding plan. If its not in the plan, it does not become a project.
Second, the two water projects (Water Treatment Campuses and Northwest Recharge, Recovery and Delivery System) should be funded within the Marana Water Fund and be paid by Marana Water Customers. Using General Funds and/or Sales Taxes would put that burden on all residents including those that are Tucson Water customers, who get no benefit from these projects.
Third, Marana must enforce the long-standing policy in many towns/cities that the cost of infrastructure to serve new customers/residents should be born solely by new customers/residents and not existing customers/residents.
Fourth, Marana needs to take into account the other very high taxes that Marana residents are required to pay including Pima County Property Taxes, Arizona Water Taxes & Municipal Franchise Taxes on utility bills, Vehicle Registration Fees and more. I can tell you that I pay higher taxes/fees in Pima County Arizona than I did in Riverside County California. Marana should be working to reduce these other tax burdens on its residents.
Fifth, if there are no funds for the project, then get out of the commitment. For example, Tangerine Road Phase II (Dove Mountain Blvd to I-10) does not need to be constructed now or for a very long time. There is light traffic on this stretch and the road is in good condition.
Sixth, Marana needs to prepare a comprehensive capital improvement plan by fund with an associated funding plan with the input of Marana residents.
You should watch the video on this one. During the discussion after the presentation, right out of the gate, the Mayor blamed the Marana staff for this fiasco. Classic political move----blame it on someone else.
Well my friends, the members of this Town Council have been around for decades and they are responsible for getting us into this mess. Now they propose to use our rainy day reserve funds and raising taxes as camouflage for their fiscal mismanagement. Their cover is blown!