Tentative city budget makes adjustments for COVID-19Jun 01, 2020 10:19AM ● By Cassie Goff
By Cassie Goff | [email protected]
It is budget season! The Cottonwood Heights 2020-2021 tentative budget has been drafted and published on the city’s website. A public hearing for the tentative budget will be held virtually on June 2. Residents are welcome to send in comments on the budget for that hearing before 5 p.m. The Cottonwood Heights City Council will adopt the yearly budget two weeks later, on June 16.
This year, outlining tentative budgets has been difficult for governmental agencies all over the state, as the impacts of COVID-19 are yet to be fully known. There may still be future impacts to revenues and expenditures. Revenues based on taxes are likely to be reduced, as well as expenditures due to hiring freezes.
The current draft for the Cottonwood Heights tentative budget accounts for a revenue “reduction for six months, and then a recovery to prior budgeted revenue levels,” said Finance and Administrative Services Director Scott Jurges.
Overall, city revenue for the full fiscal year is budgeted at $19,972,750, which will include a $543,245 reduction from last year (a 2.73% decrease).
One of the major revenue sources for Cottonwood Heights is sales tax. Within the tentative budget, the city is accounting for a $600,000 reduction of sales tax from the 2019-2020 budget. This is based on anticipating no new growth and subsequent reduction within the next six months, between July and December (a 9.4% annual reduction). Early estimates show that the city will likely see a $100,000 monthly reduction is sales tax revenue.
“The reality is this will be more of a larger upfront impact followed by gradual improvement over the six month period. This could change as the effects of the current financial difficulties are not fully known,” said Jurges within the budget packet.
In addition, Energy Use sales tax is anticipated to decrease by 4.88%, which will bring revenue down to $1,950,000. Franchise tax will also see a 4.62% decrease and is budgeted for $310,000, which is a $15,000 reduction from last year. Class C road funds will see a reduction of $30,000, which will leave that revenue at $1,210,000.
However, a few revenue sources for the city are anticipated to stay the same or increase. Property taxes are expected to increase by .63%, which would increase property tax revenue to $8,050,000. Fee in lieu of property tax will not change from $425,000. County Option Highway sales tax is not anticipated to change from $600,000. School District Resource Officer revenue will stay consistent at $80,000. And the Transient Room tax will stay consistent at $35,000.
Besides tax revenue, the revenue acquired from licenses and permits, intergovernmental revenue, charges for service, fines and forfeitures, and interest will remain consistent.
Expenditures for the upcoming year will total $17,622,294. “Overall expenditures have been kept as flat as possible due to the current economic conditions,” writes Jurges.
In keeping expenditures flat, the tentative budget includes no increase to market, merit, and cost of living adjustments (COLA) for city employees. If the pandemic was not a factor, the recommendations would have been to increase average compensation for individual city staff workers by 4.3% (altogether $325,000), COLA by 2.3% ($165,000), and merit by 3.62% ($223,000). However, these recommendations will be discussed later in the year when city officials have a clearer picture of the economic impact.
The majority of expenditure changes from last year’s budget include: the Unified Fire Authority (UFA) ($81,556); liability insurance costs ($50,000); city hall maintenance ($30,000); parks maintenance ($15,000); dispatch and records management (Versaterm and VECC) increases ($16,181); Salt Lake County Park and Ride ($6,500); and Mill Hollow and Butler Parks maintenance and water ($130,000).
Total expenditures for the 2020-2021 fiscal year includes $10,252,560 for public safety; with $6,074,478 for police, $4,001,694 for UFA, and $176,388 for ordinance enforcement.
General government including city council, planning commission, legislative committees, judicial costs, city hall and administrative offices will expend $3,565,219.
Capital Improvement Road funds along with Debt Services for building, police vehicles, public work vehicles, will expend $3,691,305.
$2,834,914 will be expended on Highways and Public Improvements including public works, storm drains, class C road program funds, and traffic signal street lights.
The Community and Economic Development city services will expend $969,601 for planning, economic development, and engineering.
Expenses from the Fund Balance will include pavement management, striping, hazard mitigation, police equipment and vehicles, Ferguson Canyon nature and dog park match, and Big Cottonwood trail maintenance.
To view the Cottonwood Heights 2020-2021 Tentative Budget Outline visit the city’s website at: www.cottonwoodheights.utah.gov/home. Residents may submit comments to the city recorder by email at [email protected] by 5 p.m. on Tuesday.