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December 12, 2013
Municipal tax adds new cash to Co. budget

The proposed 2014 budget for Tooele County significantly changes the way in which services provided to unincorporated areas may be funded.

The change adds up to a need for $1.5 million in revenue from a municipal service tax, according to Tooele County Commission Chairman Bruce Clegg.

“With the drop in revenue that the county has seen, the municipal service tax is needed so we can continue to provide services that citizens in the unincorporated areas of the county need and enjoy,” he said.

“We need additional funds to pay for these services and the municipal service tax is one way to raise those funds that we as a commission control,” he added.

The new tax is in addition to the general property tax, and only applies to unincorporated areas of the county. At a rate of .000752 the municipal service tax will add an additional $62 per year on a house valued at $150,000.

State law requires counties of Tooele’s size to budget appropriations for municipal services from either a municipal service fund or through establishing a local service district.

The state law defines municipal service as a service not provided on a countywide basis and not accounted for in another county fund. It includes police patrol, fire protection, street lighting, planning and zoning, local streets and roads, and curb, gutter, and sidewalk maintenance.

State law allows for municipal service fund revenue to include fees and charges for services and federal dollars. However, the municipal service fund cannot receive support from any fee or tax based on a countywide assessment or service.

In 2011, the year before Tooele County’s financial troubles began, the municipal services fund covered the cost of the county’s engineering department, 80 percent of the sheriff’s patrol, county road projects, and the bookmobile.

In the 2014 municipal service budget, the bookmobile, a $128,778 expense in 2011, has been eliminated, the county engineer position has been dropped and the department’s staff slashed reducing the engineering budget from $837,617 in 2011 to $393,728 in 2014.

The amount charged to the municipal service fund for the sheriff’s office has dropped from $2.6 million in 2011 to $2 million in 2014. Animal control expenses, a line item in the municipal service budget, decreased from $84,012 in 2011 to $75,276 in 2014.

The county’s portion of gasoline tax allocated by the state, known as the “B” road fund, is included in the municipal service fund.

In 2011 “B’ road funds were $2.2 million; the 2014 budget has $2.3 million in anticipated “B” road fund revenue and expenses.

There are new expenses in the 2014 municipal service budget that have not been charged to the municipal service fund in the past.

Each county department has estimated a percentage of its services that are provided to unincorporated areas of the county. The amount ranges from one percent for the treasurer’s office to 50 percent for the county attorney and surveyor’s offices.

The municipal service fund will, for the first time, reimburse the county general fund for these services provided by the county attorney, auditor, clerk, recorder, surveyor, treasurer and commissioners.

The municipal service fund will also be charged for services provided to unincorporated areas for dispatch services, information technology, human resources, and geographical information services.

These new expenses add up to $1.3 million. Combined with the $1.9 million for the sheriff’s office, a total of $3.2 million will be transferred from the municipal service fund to the general fund to cover municipal services paid out of the general fund.

Clegg explained the reason for the additional charges to the municipal service fund.

“Back when the county had plenty of money, we didn’t have to worry about tracking all of the municipal services expenses,” Clegg said. “But with the decline in revenue we now need to account for all of the municipal services provided to the unincorporated areas and make sure that they are not paid by general fund revenue.”

The 2014 municipal service budget also contains one more new expense for the fund: economic development.

The county’s economic development office was eliminated in the first round of budget cuts in September 2012. The 2011 budget for economic development, then a line item in the county’s general fund, was $160,237. The 2014 budget includes $118,000 for economic development as part of the municipal service budget.

The money budgeted for economic development will be used to hire a consultant to perform work as needed, including updating the county’s economic development plan, according to Tooele County Commissioner Shawn Milne.

“As Tooele City and Grantsville already pay for economic development within their boundaries, we expect that our economic development efforts will be spent on recruiting businesses in the unincorporated areas of the county, therefore it is a municipal service budget item,” he said.

The total proposed municipal service expenses for 2014 are $6.3 million, down 11 percent from the 2011 municipal service expenses of $7.1 million.

The revenue streams used to fund the 2014 municipal service budget have changed from the 2011 budget.

Municipal service revenue for both years include the portion general sales tax collected in unincorporated areas allocated to the county from the state, building permits, animal licenses, other charges for services, a payment from the U.S. Forest Service, and the county’s share of gasoline tax that is earmarked for road projects.

In 2011 the county allocated $1.2 million of its $4.3 million federal Payment In-Lieu of Tax payment to the municipal service fund. The commissioners have budgeted the 2014 PILT payment to be $3.1 million, however they have chosen to put the entire amount in the general fund.

Replacing PILT as a revenue source for the municipal service fund is the $1.5 million to be generated from the new municipal service tax.

“I have heard from residents in Tooele and Grantsville cities that are concerned that their taxes were raised to pay for services to the unincorporated areas of the county,” Milne said. “We want to make sure that municipal services are appropriately accounted for and funded.”

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