Truth in Taxation

Public HearingAugust 11, 2011 7:00 pm

On May 3, 2011, the West Bountiful City Council adopted a balanced

tentative budget maintaining current

service levels.

A Balanced Budget

The City has not applied regular funding to streets

maintenanceThe current budget for the Capital Streets Plan remains

unfunded by $8.1 million

Why Increase Property Taxes?

Option #1 60 years no maintenance 1 Rebuild at 30 years ($5.00 per square foot) Total cost for rebuild only – 20 miles @ $5.00 sf

= $15,312,000

Option # 2 60 years with maintenance Four slurry seals, two overlays with rebuild at 60

years ($3.00 per square foot) Total cost for maintenance/rebuild plan – 20 miles

@ $3.00 sf = $9,187,200

CARING FOR STREETS SAVES $6,124,800

Proactive maintenance for Streets will save millions of future dollars.

Leading Road Infrastructure Projects 700 West from 1000 to 1600 1550 N from 700 W to 725 W 800 West from Porter to 2350 725 West 800 West from Pages to DSB 400 N from 1100 W to 1450 W 800 W from 100 N to Pages 900 W from Pages South

Current Total Unfunded Street Liability is $8.174 million

Examples of Capital Streets Projects

B and C Road Funds Fuel tax collected and redistributed by the state based on

miles/type of road

Impact Fees Can only be used on collector roads (500 S, 500 W, and 400 N)

Federal, State, and Private Grants Rarely available or predictable

Use of Fund Balance Currently 6 to 7 years to accrue for one project Currently 31 projects over next 20 years Fund Balance alone stretches projects from 20 years to 200 years

Funding Sources for Streets

Full Time benefitted employees reduced from 25 to 20 (20% reduction)

401(k) benefit taken from employees saving $100,000 per year

Employee contributing additional 10% to benefit package

No COLA or salary increases for FY 2012 Constant effort to hold line on overtime and comp Transferred Justice Court to County Spending reductions and freezes last three years Contracts evaluated and renegotiated or rebid Grant for solar 10% reduction in electric costs

City Efficiencies

Davis County Comparison – Tax Rate

Woods C

ross

Certified

South W

eber

Kaysville

Bountiful

Woods C

ross

Propose

d

Centerville

WEST

BOUNTIFUL C

ERTIFIED

North Sa

lt Lake

Syra

cuse

Certified

Clinton

Layto

n

Fruit H

eights

Farm

ingtonSu

nset

West

Point (inclu

ding NDFD

)

Syra

cuse

Propose

d

WEST

BOUNTIFUL P

ROPOSED

Clearfield (in

cluding N

DFD)

0

0.0005

0.001

0.0015

0.002

0.0025

0.003

0.0035

Average Certified Rate in Davis County in 2011

is .001735

What does it mean to me?

Property ValueCertified Tax Rate

Proposed Tax Rate

Annual Increase

Monthly Increase

$ 100,000 $81.35 $135.91 $54.56 $4.55

$ 200,000 $162.69 $271.81 $109.12 $9.09

$ 300,000 $244.04 $407.72 $163.68 $13.64

$ 400,000 $325.38 $543.62 $218.24 $18.19

$ 500,000 $406.73 $679.53 $272.80 $22.73

$ 600,000 $488.07 $815.43 $327.36 $27.28

$ 700,000 $569.42 $951.34 $381.92 $31.83

$ 800,000 $650.76 $1087.24 $436.48 $36.37

$ 900,000 $732.11 $1223.15 $491.04 $40.92

$ 1,000,000 $813.45 $1359.05 $546.50 $45.47

Median tax-assessed home

value

Effect of Proposed Property Tax

Tax Collection

Proposed Tax Rate $1,016,656

Certified Tax Rate -$608,512

Increased Collections $408,144

Conclusions

The City has reduced costs to balance operating budget, but does not have long term funding for Streets Capital Plan, consisting of:

31 Projects across the community

Maintenance of existing street to prolong life and save money

Replacement of dead streets in connection with other utilities (Water, Storm Drain…)

The Plan is underfunded by $8.1 million

The proposed property tax increase averages about $10 month for a $200,000 home

Conclusions This increase in property taxes will allow for the proper maintenance of City streets on a pay as you go basis.

Maintaining the streets properly will save $6.9 million per streets life cycle.

General Fund Revenue Summary

All figures taken from Fiscal Year 2012 Tentative Budget, as adopted by City Council on May 3, 2011

How does the City use all the money?

Legislative 1%

Court 1% Administration

6%

Engineering 3%

Non-Departmental 6%

Buildings 1%

Planning and Zoning 1%

Police Department 28%

Fire Protection 11% Streets

6%

Class 'C' Roads 6%

Parks 11%

Debt Service (Bonds)

5% Transfers 14%

What about Sales Tax?

West Bountiful receives approximately $1.56M per year in Sales Tax Revenue

Of this revenue, $458,000 is committed to outside agencies by Sales Tax Sharing Agreements:

Bountiful City – 14% (Commons) to 35% (Gateway)

Term of agreement is 50 years Developer – 43% (Commons)

Term of agreement is 10 years

If you were to buy a computer from Costco for $1,000, your final payment would be $1,066.00 including sales tax.

The sales tax would be distributed as follows: State of Utah $ 47.00 Davis County $ 8.00 Shared based on population $ 5.00 Shared by interlocal agreement $ 2.85 West Bountiful City $ 2.15 Rap Tax $ 1.00

Sales Tax Distribution

Proactive maintenance for Streets will save millions of future dollars. Option #1 60 years no maintenance

1 Rebuild at 30 years $4.50 to $5.00 per square foot Option # 2 60 years with maintenance

Four slurry seals Two overlays No rebuild until end of 60 years $2.35 to $2.75 per square

foot

For ½ mile of street 29’ times 2,640’ = 76,560 Sq. Feet Option #1 Cost is $382,800 Option # 2 Cost is $$210,540 Savings of $172,260 per half mile of street

The City currently has just over 20 miles of streets Total savings from Option #2 is $6,890,400 per

rebuild cycle

CARING FOR STREETS SAVES MONEY

Reasons for the proposed Increase

Streets Maintenance Cycle