Red light, green light: City Council must decide if Tucson is on board RTA

It’s go time for the city of Tucson and the RTA.

The Regional Transportation Authority’s voter-approved, half-cent sales tax will run out in 2026, after 20 years of road projects.

The RTA Next planning has been going on for three years now, with the city griping and complaining the whole way. 

We’ve heard the frustration. It won’t get it’s fair share. It’s not getting it’s fair share. It should go it alone and abandon the regional approach to a transportation system that can only be described as “regional.”

The city has calculated that joining the RTA would cost it $600 million. Tucson sales would account for $1.6 billion of a 20-year tax extension, but just $1 billion in projects is programmed for Tucson in the drafts approved by the RTA board.

So Pima County and Sahuarita are trying to rush to the rescue with their own compromise plan that would give Tucson just under half of the RTA budget, plus the right of first refusal on the first $360 million generated in excess of projections, which would take it to 55 percent of the budget.

All the funding is predicated on a University of Arizona Eller College pessimistic scenario for revenues. The take from the sales tax could easily surpass those projections.

The City Council will discuss the compromise during its study session Tuesday.

The numbers are hard to parse because the RTA likes to use adjusted dollars. So the forecast is not actually the amount it expects to spend, it’s the projection of 2022 buying power it expects to have.

The RTA is expected to raise $3.1 billion but crunches the numbers down to $2.5 billion after adjusting for inflation. Few other governments work this way. For planning purposes, though, it’s not a horrible idea. It’s just not at all an accurate way for me to say how much they plan on spending.

Councilmembers Kevin Dahl and Paul Cunningham have been leaning toward “no” on re-upping with the RTA. Steve Kozachik had been, too but he retired. His successor, Karin Uhlich, has seemed pessimistic. Some of the collective scowling may be hard negotiating with the other eight jurisdictions.

But the Council seems to like its odds going its own way with its own half-cent sales tax election and keeping all the money for itself.

Plans for a city-only summer sales tax election are going nowhere because the Council missed an April 25 deadline.

There’s always November… or March.

But even that’s a tough stretch, considering the Council hasn’t done the thing it likes best: Going to the public to figure out what residents want. For transportation bonds, that has proven to be a critical step.

Tucson has tried before to send a staff plan to voters. It was in 2003. It failed by 20 points. So Tucson went hat in hand to Pima County and wound up with the RTA. The only way to get money for Tucson roads was to get the county to put together the regional approach — a strategy the city now seems to see little use in pursuing.

Budget season underway

There are just 41 days left until the end of fiscal year 2024. So budget time is upon us.

The City Council and Pima County Board of Supervisors will vote to establish tentative budgets this week. A tentative budget sets a global spending limit for a government. Money can be moved around but it can’t exceed the total amount, where cities, towns and counties are concerned.

One interesting reversal of fortunes is manifesting in sales tax versus property tax revenues.

The city general fund is mostly run by sales tax revenues. The county’s pool of discretionary dollars gets filled with more with property taxes. Historically, sales tax revenues rise faster than the take from property taxes.

That’s not the case this year. Property values are booming and even with a cap on the increase in assessed valuations, which local governments use to determine taxes, county revenues off property are increasing 7.8 percent. The city’s sales tax revenues have climbed by 3.8 percent and are projected to rise by 4 percent next fiscal year.

Historically. property values increase by just 2 percent. That’s not been the case lately.

Still, both governments are bracing for trouble. Coronavirus relief money must be budgeted by December and local governments have allowed themselves to absorb temporary federal dollars into their operations budget. Now they need to start to adjust those budgets down.

The city will get a little more, overall and the county will get a little less. Global numbers are tricky because the elected leaders only have discretion over a portion of the budget. Tucson Water will spend what it takes in to keep the faucets running. Then there are bonds, special districts and the city has some voter-approved sales tax expenditures to pay for specific programs.

Tucson’s budget runs $2.4 billion and Pima County’s total budget will be about $1.7 billion. The city’s general fund runs about a third of its total budget and the county’s general fund runs just under $500 million.

The state is about to smack local governments with a big bill. The Legislature is looking at a $1.8 trillion deficit, courtesy of a flat tax and universal vouchers to benefit wealthier Arizonans. All of this is courtesy of former Gov. Doug Ducey and the 55th Legislature before they left office in 2023.

Neither the city, the county nor any other local governing body in Arizona yet knows how deeply the state will cut shared revenues. 

The city is guessing a $27.4 million hit. The county has a different problem, in that 1 in 4 general fund dollars are used to pay for services the state used to fund but offloaded to counties when the Legislature faced previous budget problems.

When the 56th Legislature and Gov. Katie Hobbs figure out what needs to be cut, those local governments may have to absorb more pain.

Fare-free transit remains the biggest ongoing consideration for the present and future. Right now the city expects to be able to cover the costs until 2026, when some decisions will have to be made.

The city is also budgeting for voters approving a half-cent sales tax increase in an election yet to be scheduled.

In Pima County, County Administrator Jan Lesher is proposing a 6.7-cent-per-$100-of-assessed-value increase in the primary tax rate, offset by a 9.5-cent reduction in the secondary tax rate as old debt is retired.

The money would be used on capital investments typically paid for by voter approved bonds. Voters stopped approving county bonds about 10 years ago. The costs remain but the funding source has been denied.

So the board is going a different route. Frankly, I think they should probably consider asking for another bond after doing some research to find out what voters want and why they stopped approving county bonds. Tying operational tax rates to debt service tax rates creates problems.

This PAYGO plan was established under former County Administrator Chuck Huckelberry. As one tax falls by a penny, bump the other by a penny. The property owner witnesses no change in their bill. However, the tax rate would have fallen if supervisors left the tax rates alone. Hence, a tax increase.

Included in that property tax increase is just under a half-cent bump in library taxes paid for out of the secondary tax rate.

Additionally, Supervisor Matt Heinz is calling for a 9-cent-per-$100-of-assessed-valuation increase in the primary tax, which pays for daily operations.

Heinz says that would cost the average home owner $20.18 this year.

His plan is to use $3 million for affordable housing and open space, and $7.5 million for the county’s prosperity initiative.

That would leave the home owners with a 16-cent tax hike on $100 of assessed value.

Heinz likes to just put stuff on the agenda and see if there are three votes, rather than working to gather consensus for these ideas over time. It doesn’t usually work. This year there might be a discussion because of ongoing needs in affordable housing and cuts in quality programs like JobPath.

Heinz might not get 9 cents. He might get a couple.

Weird, but not at all goofy

Back over to the City Council, the city will get a look at the progress in turning the Los Reales Landfill into the Los Reales Sustainability Campus.

The city has bought some land, built an access road, made some investments in tree recycling and opened a new landfill cell (or should I call it “sustainability cell?”).

Another element is to turn the methane, the gas that gathers under all landfills, into a resource to be sold on the natural gas market.

The project is in the bid phase and a contract is expected to be awarded in the fall. Then the city can pump the gas off somewhere.

It’s weird but not at all goofy.

Methane is created by the natural decomposition of organic compounds dumped in landfills. All landfill operators have to release the methane somehow, because methane can either leak or possibly even explode. So they gotta do something with it. Why not sell it?

The City Council will vote during its regular meeting on an agreement to store Central Arizona Project Water for Gilbert, Scottsdale and Peoria.

Those Phoenix-area communities will get credit for CAP water stored here and then be able to pump more in The Valley. Meanwhile, Tucson water customers will just pump the actual water stored on behalf of parts of metro-Phoenix.

The deal has been in the works since August 2023 and the three contracts are ready for approval.

Speed limits will be reduced by five miles per hour on selected street sections around Tucson, if the Council approves a proposal by the city’s traffic engineers.

Alvernon Way, East 22nd and East Old Spanish Trail are the key roads affected by the proposed change.

Of all of them, East Broadway between Country Club and Wilmot roads is probably the most-traveled stretch. The new speed limit would drop from 40 miles per hour to 35 miles per hour.

Ironwood Hills Drive from the city limits (near Shannon Road) to Greasewood Road would see a drop from 45 miles per hour to 40 miles per hour and then on to Silverbell Road, the top speed would be lowered to 35 miles per hour from 40.

The Council is also looking to apply for a grant to rehabilitate 300 mobile homes and buy two trailer parks to improve the stock of affordable housing.

Some 50,000 manufactured homes dot Tucson’s landscape and 35 percent of them were built prior to 1978. Low-income families can struggle to keep up with the maintenance on these homes and it can be deadly. In 2023, 40 percent of all indoor, heat-related deaths happened in manufactured homes.

Pima County supervisors will discuss the process to replace former Constable Oscar Vasquez.

Vasquez had been… a lot …

The constable working Justice Precinct 4 on the West Side had been admonished and urged to resign for multiple reasons.

He failed to show for work for six months, refused to evict problem tenants from one rental, and publicly urinated on another unit while serving a notice. He sent a woman inappropriate and unwanted images. Finally the supervisors suspended him after discipline was recommended by a state board overseeing constables.

Earlier this month, he scratched out a resignation letter on a pad of paper and submitted it to the clerk (after earlier trying to resign with a note to the wrong official).

So the board is going to figure out how to replace him with an appointee. Luckily, supervisors have plenty of experience replacing people and know exactly how to do it (but look for at least one Supe to suggest that the slot be left empty until its filled in the November election).

The board also needs to set up a process to fill the seats on the Tanque Verde Valley Fire District board, where all three members are set to resign sometime around the beginning of June. None of them indicated an effective date they’re leaving office, but they all said they’re out of there soon.

In other burning news, Supervisor Steve Christy wants the county to help his constituents living on Mount Lemmon with getting fire insurance.

A letter from Mount Lemmon Homeowners and Business Economic Associations identified key points of concern: Availability of insurance, affordability, coverage gaps and the impact on property values.

Sounds fair. Although, I have seen voting patterns on Mount Lemmon and part of me wonders how they feel about the government assisting in the availability, affordability and coverage gaps of health insurance, but no matter. Would that be “socialism?”

One option is not to build homes in pine stands as climate change ravages the world with wildfires. But who among us Tucson lowlanders doesn’t like Mount Lemmon? Or Summerhaven? So pitching in doesn’t seem that crazy.

The county just doesn’t have a firm grip on how to do that right now. Plus the budget is getting tighter.

One idea is to form a special taxing district to help cover part of the costs the rest of us could match because, again, who doesn’t like Summerhaven?

Staying with Dixie, South Tucson bond

The Town Council of Marana will vote on its $474 million tentative budget Tuesday. That figure excludes secondary tax revenues for debt service.

New hires and raises for current employees will be a focus of the new budget as presented to the council. The town is expected to add 31.5 new employees. Half of them will be hired at the town aquatics center.

Two-thirds of the budget is in capital, which is a big proportion compared to other local governments.

The 2024-25 budget proposal also includes 4 percent merit raises for employees.

Protecting raises for employees is a concern of Marana, Tucson and Pima County.

The town council will also vote on whether to reappoint Dixie DeBonis as the civil traffic hearing officer, a position she’s held since December 2018.

Down in Santa Cruz County, the board of supervisors will vote on a plan to improve the monitoring and ethics training in the county assessor’s office after a bribery scandal and investigation by the state auditor general.

Former Assessor Felipe Fuentes pleaded guilty to bribery in 2022 but the Auditor General’s Office found the case to not be emblematic of a problem in the office. Still, auditors recommended improved surveillance, controls and training.

Supervisors will vote on those recommendations Tuesday.

In South Tucson, the City Council will vote on whether to proceed with a $2 million bond to buy new fire equipment and vehicles.

The election will be held in November.

Council members will also discuss a “Home Rule” option for their future budgets. It would put to voters whether to abide by state spending limits or impose their own.

The council will also discuss how to recruit a new city manager.

City Clerk Veronica Moreno has been wearing a multiple of hats serving in her official role, acting city manager and personnel director.