Saturday, June 20, 2015

City Council 16-Jun-2015: Certified Tax Rate, 2015-16 Budget, Vacation Accrual & Park Building

The council meeting was attended by 9 residents initially and then as the meeting progressed the initial attendees left and members of staff (14+) came to listen to the vacation accrual discussion. While we did not finish the meeting until midnight this was a good meeting with lots of healthy discussion on multiple important issues.

You will notice several references to the city council agenda in this report. The link is to my marked up version of the council agenda which I thought some might find interesting. By way of background staff uses a Dropbox account to share agendas and other documents with council members. I review these prior to council meetings, make electronic notes and save a version of the document to the Dropbox folder with a “- Rod” added to the filename. My notes include my thoughts questions and I have on issues we’ll be voting on, corrections to minutes, typing errors  … . I think it is better for everyone when staff comes to council meetings aware of what the potential questions will be and other council members understand where I’m at on issues.

WORK SESSION: ASD LAND SWAP

Over the last couple of months the city and Alpine School District have been discussing swapping city owned land adjacent to Lone Peak High School with ASD owned land adjacent to Mountain Ridge Jr. High School. Lone Peak needs additional parking space and the city would benefit from additional park space so we see this as a win/win. We have settled on what the city would prefer and are awaiting final approval from ASD. Below are maps with rough outlines around the land being swapped. We get developed park land and ASD get undeveloped land that can be used for parking. The land is roughly equal at 4+ acres. We believe this is a win/win for both parties. Please refer to staff report pages 

2015-06-16 Lone Peak Land Swap

2015-06-16 Mountain Ridge Land Swap


APPEARANCES

  • Public Comment: A young man, Carson Seegmiller, addressed the council and proposed that the city allow him, as an eagle project, to create a mountain bike training area in the park land directly east of the Lone Peak Seminary bldg. He did a nice job on his presentation and indicated that no city funds would be needed on the project.

    2015-06-16 Mountain Bike Training Area

    Prior to the meeting we also received the following two presentation regarding mountain biking:
    - High School Mountain Biking Team meeting overview for parents
    - Lone Peak Mountain Bike Club welcome presentation

    Staff will be meeting with the Carson to go through the process items that need to be followed to make this happen.

CONSENT ITEMS

  1. RESOLUTION: Adopting Certified Tax Rate – As determined by Utah County.Unanimously approved. This years tax rate will be lower than last years but the actual dollars property owners pay to the city should be roughly the same as property values increased. The following discussion regarding the Certified Tax Rate may be useful:

    WHAT IS A CERTIFIED TAX RATE?

    Each year the county calculates a new certified tax rate for all taxing entities (i.e. cities, school districts, service districts) by taking the property tax revenue collected the previous year and dividing it by the current assessed property value within the taxing entities (exclusive of new growth). This is the tax rate is then applied to all assessed property (including growth) and the new total becomes the base for next year.

    Fictitious Example
     
    Let’s suppose in 2014 Highland City Property Taxes generated $1.5M and value of all property in Highland was $300M.This would represent tax rate of 0.5%.

     

    Assessed
    Property Value

    Tax
    Rate

    Tax
    Collections

    2014 – all property

    $300,000,000

    0.0050

    $1,500,000

    2015 – existing property

    $330,000,000

    0.4545

    $1,500,000

    2015 – new property

    $70,000000

    0.4545

    $318,182

    2015 – total (new base)

    $400,000,000

    0.4545

    $1,818,182

    Now for the 2015 tax year the appraised value for property taxed in 2014 has increased to $330M (a 10% increase). The 2015 tax rate will be 0.4545%. Because new residential homes and commercial buildings (e.g. Skye Estates and CVS Pharmacy) were built in 2014 another $70M in property value was added to Highland. Therefore in 2015 the total property tax revenue to Highland was increased from $1.5M to $1,82.

    End Fictitious Example

    What does this mean for the City of Highland and its residents?
    • While your property may increase or decrease in value, the actual dollar amount you pay from one year to the next should be roughly the same (unless a tax increase or decrease is passed). Note, if your property appreciates more or less than the average home in Highland then your city property tax bill will go up or down based on the difference from the average property value change.

    • The city’s revenue from property tax only increases when there is growth. Note, growth not only brings revenue but it also adds to costs (more cars on the road, more service requirements …).

    • There is no adjustment for inflation so over time the buying power of the property tax revenue declines. Can the city operate more efficiently? I believe that is the case. However, at some point in the future we will need to raise taxes or cut services.

    The legal cap on the certified tax rate for cities is 0.007 and for libraries 0.001. The Highland 2015 tax rates are 0.001362 and 0.000206 (total: 0.001568) which are about 20% of their respective limits. The anticipated property tax revenues for the city are: $1,501,373 general operations and $227,080 library.

    For more detailed information please refer to the following:

  2. RESOLUTION: Supporting HB 362 (2015) – Local Option General Sales Tax Dedicated to Transportation. The resolution encourages the county commissioners to put local sales tax item on a future election ballot. The state legislature passed a law allowing counties to impose a 0.25% sales tax if approved by a majority of the voters. In Utah County 0.05% will go to county roads, 0.10% will go to UTA, and 0.10% will go to cities for the sole purpose of funding transportation.  Passed 4 to 1. Brian Braithwaite, Dennis LeBaron, Rod Mann and Jessie Schoenfeld supported it and.Tim Irwin opposed it. My view is there is a legitimate need for road funding and I am not opposed to letting citizens vote on the issue. See page 6 on the Council Agenda

  3. MOTION: Final Plat Approval – Stoney Brook Subdivision located at 4800 West and 11200 North. Approved Unanimously. See page 25 on the Council Agenda.

  4. MOTION: Final Plat Amendment – Stirling Pointe located at approx. 12070 north and Highland Blvd. Approved Unanimously. See page 30 on the Council Agenda.

PUBLIC HEARING

  1. Final Budget & Pressurized Irrigation Fund Transfer – Fiscal Year 2015-2016. Following a short budget presentation by the city finance director. There was no public comment.

ACTION ITEMS

  1. RESOLUTION: Approval and Adoption of Final Budget - Fiscal Year 2015-2016. The budget was unanimously approved with the following amendments:
    1) Adding administrative costs and rent the library in the amount indicated below.
    2) Adding $6,500 back into the library budget following an earlier $9,000 cut.


    Expense Item

    Library
    Allocation

    Telephone

    $2,132

    Prof & Tech Services

    $1,440

    Bldg. Maintenance

    $4,397

    Bldg. Utilities

    $9,781

    Rent

    $37,567

    Property Insurance

    $1,415

    Total

    $56,731

    Note, the library will end the year with about a $112,000 reserve (while this is included in the general fund this money can only be spent on the library). With the planned budget the reserve will be reduced by about $37,000). Essentially this means the city will be able to use those $37,000 for other purposes such as roads and trails.

    Please refer to the online budget. I will update when I get the final budget data from the finance director. See also page 36 on the Council Agenda.

  2. MOTION: Request to Expand Existing Easement in Beacon Hills Subdivision - Questar Gas. Approved unanimously. Questar wants to expand a current gas pipeline easement (16 ft. to 30 ft.) where the pipeline is being upgraded. This had already been reviewed with the council and we needed to agree to a price (land was valued at $1 per sq./ft.) and the final contract. We will be getting $3,250. See page 81 on the Council Agenda.

    2015-06-16 Questar Easement

  3. MOTION: Metropolitan Water District Agreement – Allow portion of Country Club drive to be on District Property. Unanimously approved. A small portion of the road was built on land owned by Metropolitan Water District of Salt Lake and Sandy. The agreement will allow us to continuing using it for another 25 years at a cost of $2,000. Brian Braithwaite asked our attorney to check to see if they would agree to extend the agreement for 50 years for a little bit more money. See page 92 on the Council Agenda.

  4. MOTION: Sewer Replacement Project – 10400 North Sewer. Unanimously approved. A 2500 ft. section of sewer line on 10400 N is currently running at 75% of capacity. If the line is increased for 10 inch to 12 inch it will serve the community at build out. Because the sewer line runs down the middle of the road about half of the road will be torn out and replaced. If we rebuild the entire road at the same time the city will save about 50% of the estimated $330,000 cost to rebuild this section of road. The sewer project will be an impact fee funded project because it is tied directly to growth. The plan is to bid the sewer line replacement and road work in the fall and then start work in April. See page 124 on the Council Agenda.

    2015-06-16 Sewer Line Expansion 10400 N

MAYOR, CITY COUNCIL AND STAFF COMMUNICATION ITEMS

  • Sanitary Sewer Maintenance Plan – Nathan Crane
    Staff is updating sewer maintenance plans and will include the associated costs when a comprehensive utility rate analysis is done this fall.  See page 129 on the Council Agenda.

  • Engineering Design Standards – Nathan Crane
    Staff has been updating the Design Criteria and Standard Drawings for public improvements (roads, intersections, utility conduits, parkways …). Input on them is requested by July 8. See page 140 in the Council Agenda.

  • Personnel Vacation Policy – Brian Braithwaite
    Current policy allows employees to accrue an unlimited number of vacation hours. Brian is proposing that we limit this and cap it at 200% of annual leave. Employees would rather have the limit applied on their hiring anniversary date rather than have an absolute cap and proposed this with a 175% cap. A number of employees attended the meeting with an expectation that a decision would be made at the council meeting. However, as this was on the discussion agenda rather than being listed as an action item no decision was possible. While there unanimity on the council that vacation should be capped we need a specific proposal to either amend or approve. There are some that would prefer cap of XX hours for everyone rather than use a % of leave. Brian and staff will work out a proposal and bring it to a future council meeting.

  • Park Maintenance Building – Nathan Crane
    We discussed next steps on the park maintenance building. Outsourcing mowing an trimming is an option that would reduce the storage space requirements. Some believe that doing mowing in-house is far more economical however, a thorough analysis needs to be done. In any case my view is that we will not have time to build anything this year and thus will need to make arrangements for storing the equipment this winter. This could be in trailers or a rented storage facility.

ADJOURN TO A CLOSED EXECUTIVE SESSION

  • The sale of real property Pursuant to Section 52-4-205(1)(e) of the Utah State Code Annotated.

  • The character, professional competence, or physical or mental health of an individual. Pursuant to Section 52-4-205(1)(a) of the Utah State Code Annotated.

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