Despite the need for revisions, a draft study has found that Tooele County spends enough money on unincorporated areas of the county to justify a $1.5 million municipal services tax.
A bank official and Tooele County Commissioners sat in front of an audience of a dozen people last Thursday night at Rush Valley Town Hall and explained the initial report of a $16,000 study of the Tooele County municipal services fund.
The study was done by Zion’s Bank Public Finance.
A revised version of the study, which will be presented tonight at 7 p.m. at the Stockton Miners Cafe, identified $6.9 million in municipal services expenses in the county’s 2014 budget. That is $665,478 more than the expenses the commissioners included in their approved 2014 municipal services fund budget.
The revised expense figure was lowered by $168,195 after the Rush Valley Town Hall meeting because the Rush Valley draft of the study included the issuing of marriage licenses by the county clerk’s office as a municipal expense. The county clerk provides this service to all areas of the county.
The report prepared for tonight’s town hall meeting also shows revenue generated by municipal services that offsets the cost of providing those services.
Residents of some unincorporated areas were not satisfied Thursday night with the methods used by Zions Bank in the study.
“I’m willing to pay my fair share,” said Josh Maher, resident of South Rim. “But $1.5 million is a large increase. I just want to make sure that it was calculated right.”
Wade Hadlock of Stansbury Park, wanted to see more of the county’s federal payment in lieu of taxes payment allocated to municipal services.
“PILT replaces tax payments for federal lands in unincorporated areas and it should be spent in the unincorporated areas where it is generated,” he said. “I also think you are double taxing us by charging for some services in both the general and the municipal services tax.”
Tenille Tingey, a financial analyst for Zions Bank Public Finance, described the scope of the study, which included defining municipal services, determining how much of each departments’ budget to allocate to municipal services, reviewing the allocation of federal payment in lieu of taxes to municipal services, projecting future expenses, and identifying other revenue streams for municipal services.
“The goal is to align services with the cost to provide the service, and then assign the cost to those who are benefiting from the service,” she said.
Municipal services include city-like services provided to unincorporated areas.
Examples of municipal services in Tooele County include public safety, roads, community development and building services, economic development, and administrative support provided by county offices, according to Tingey.
Different methods were used to allocate expenses in each department including a time budget kept by department heads, samples of work hours, interviews with department heads, and other records.
In the sheriff’s office, the address that deputies responded to, not including traffic calls and accidents, were placed on a map. Zions Bank found that 62 percent of the calls mapped were for service outside the county’s incorporated areas.
For roads the county’s geographic information system was employed to measure the number of miles of maintained roads in the county and then major collector roads, which were deemed to benefit the county in general, were identified and measured.
The study found a total of 369 miles of county roads with 38 miles of collector roads, for approximately 90 percent of roads in the municipal services fund area.
Similar studies were completed by Zions Bank for all county departments with the percentage of expenses allocated to municipal services ranging from 3 percent of the county auditor’s budget, to 100 percent of animal control, economic development, zoning and building services, and street light expenses.
The total of municipal services expenses identified by the study was $6.99 million.
On the revenue side, the study’s assumptions included $1.5 million in revenue from the municipal services tax as proposed by the county commission.
The county’s approved municipal services budget also includes $4.75 million in revenue from unincorporated area sales tax collection, building permits, animal fees, a forest service payment for the road fund, state gas tax allotment, and other charges for municipal services.
The Zions Bank study also recommended that the county allocate 25 percent of its federal PILT revenue to municipal services, Tingey said.
The county will collect $6 million from property tax in 2014, $4.5 million in general property tax and $1.5 million from the new municipal services tax, making 25 percent of property tax collected exclusively for municipal services.
Tingey said that to be equitable, PILT money should be divided in the same proportion.
If the county allocates 25 percent of its $3.1 million anticipated 2014 PILT payment to municipal services, the fund will receive $775,000.
The combined recommended municipal services fund revenue for 2014, less projected expenses, leaves the fund with a surplus of $36,000 at the end of the year.
However, the study includes projections for increased spending over the next five years to keep up with growth.
Zions Bank recommended a 1.36 percent annual inflation increase be included over the next five years, with a larger increase, nearly 3 percent for capital improvements, to allow the county to catch up with needed road improvements, Tingey said.
With PILT funding included in the municipal services fund, property tax from new growth will minimize the need for an increase in the municipal services tax over the next five years, even with the forecasted increase in expenses, said Tooele County Commissioner Shawn Milne.
Other sources of funding for the municipal services tax suggested by the Zions Bank study included expanding grant funding, adopting impact fees, increasing other fees to cover the true cost of services, and a storm water utility fee if the current storm water utility requires more funding.
State law requires a county the size of Tooele to have a municipal services fund and pay for city-like services for unincorporated areas from the fund.
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 2013 the county allocated 22 percent or $322,677 of its $3.1 million federal PILT payment to the municipal services fund.
However, the county commissioners chose to put the entire PILT payment for 2014 in the general fund.
The federal government does not restrict how PILT money can be spent.
Replacing PILT as a revenue source for the municipal service fund in the 2014 budget is the $1.5 million to be generated from a new municipal services tax, the subject of the current Zions Bank study.
To collect the $1.5 million, property owners in unincorporated Tooele County will pay an additional $62 per year on a house valued at $150,000. That amount is based on 2013 property valuations.
A town hall meeting with Zions Bank and Tooele County officials will be held tonight at the Stockton Miners Cafe at 7 p.m.