Changes in 2023 city budget include cost-of-living increasesJun 30, 2022 08:33PM ● By Cassie Goff
By Cassie Goff | [email protected]
On June 21, the Cottonwood Heights City Council adopted the annual budget for fiscal year 2022-23. Budget discussions began to transpire early in the calendar year in two different committees. The Compensation Committee and Budget Committee met regularly; each comprised of two city councilmembers, at least one city employee from the Finance Department, and various city employees.
“It’s a good budget based on input and collaboration,” said Administrative Services and Finance Director Scott Jurges. “It was a long process talking with a lot of different people including department heads, city councilmembers, and city staff members. It’s been very productive.”
Councilmembers Ellen Birrell (District 4) and Doug Peterson (District 1) are a part of the Compensation Committee. They discuss budgetary items related to employee compensation such as salaries, merit, COLA (Cost-Of-Living Adjustment), PTO (paid absences), health insurance, and retirement (with Utah Retirement Systems).
“It’s challenging to understand the market for (compensation) increases,” Peterson said. “This year, some of the health insurance cost estimates were as high as 19%.”
One of the most deliberated items this year regarded merit and COLA increases. Usually, Cottonwood Heights incorporates a 2% increase into their annual budget. This year, that wouldn’t suffice.
“We haven’t had this rise in the consumer price index since the 1980s,” reported City Manager Tim Tingey.
He reported that while some cities were still planning on increasing COLA by only 2% or 3%, the average throughout the state seemed to reflect an increase of 6%.
“The council loves their staff, and we want to be ahead of inflation, but we do have a fiduciary responsibility,” said Mayor Mike Weichers. “It will be a multiyear impact on the compensation budget.”
Culture and HR Director Paula Melgar voiced concern over hiring and retention if the council decided to go lower than 7%.
Councilmember Shawn Newell (District 3) echoed her concern, stressing “the importance of maintaining people with their skills sets.”
After months of deliberation, the city council came to the decision to raise merit by 2.54% and COLA by 6%. In total, these increases will reflect an increase to the annual city budget of $1,020,326.
Councilmembers Scott Bracken (District 2) and Newell serve on the Budget Committee. They have frequent discussions related to prioritizing and allocating funds throughout the various city departments and projects. This year, three new expenditures were heavily discussed.
The city’s Public Works Department has been waiting for funds to pay for new facilities for years. Based on increasing interest rates, the city council has decided to bond for that project this year. The city will pay $516,134 for the first year of principal interest on a $7.5-million bond, in order to improve the Public Works facilities.
In addition, the city council has agreed to a cost of $12,000 for Y2 Analytics to conduct multiple topical scientific surveys, expanding on previous citywide surveys gathering resident opinion.
One of the new expenditures this year comes from a request from the Central Wasatch Commission. They would like to study traffic impacts within Big Cottonwood Canyon and have asked all participating municipalities to pitch in for the cost. Cottonwood Heights’s portion is estimated to be $15,000.
“It’s the first thing we need to do in order to go to UDOT with our own plan, instead of them coming to us,” Weichers said.
Additional new expenditures for this upcoming year’s city budget include: $45,000 for biannual city elections; $25,000 for the city council’s attendance at the National League of Cities; $267,188 for UFA fees; $15,420 for city attorney fees; $1,000 for Youth City Council’s expenses; $6,600 for Butlerville Days; $6,300 for emergency management; $20,000 for court costs increases (managed by the Holladay Justice Court); $5,000 for increases to ordinance enforcement; $2,000 for various Community and Economic Development Department trainings; $97,500 for technology costs including cybersecurity enhancements and software and hardware subscriptions; $120,326 for Public Works related expenses (including equipment operations, traffic calming, hazard mitigation, ADA ramp projects, fencing, and a right-of-way technician); and $113,550 for police related expenses (including fuel, VECC (dispatch) fees, Lexipol and software subscriptions, Axon Redaction, D.A.R.E., and de-escalation training).
Lastly, transfer out of the general fund for debt services will total $2,342,410. Land and buildings are estimated to take $1,694,114 of that total, while $338,079 will be allocated for police vehicles and $310,217 for Public Works vehicles.
Cottonwood Heights holds 6% of the general fund balance in savings (estimating $1,557,315 this year). Along with that 6%, the city will be holding an additional percentage for 100 hours of PTO and compensated absences for city employees, totaling $595,179. This year’s general fund balance is estimated to be $8,513,270 (however, as of publication, more recent projections estimate closer to $8.7 million). That leaves approximately $6,858,753 available to cover the above, and additional, costs.
(Jurges mentioned that based on current projections, Cottonwood Heights could see an $8.8 million general fund next year.)
Cottonwood Heights collects funds from a variety of different tax revenue streams. Current projections indicate that the city will likely collect estimates of: $8,203,450 from property taxes; $7,200,000 from sales taxes; $2,200,000 from energy use taxes; $300,000 from franchise taxes (Cable TV); $650,000 from County Option Highway Sales Taxes; $350,000 from Telecom Franchise taxes; and $425,000 from Fee in Lieu taxes (which comes from vehicle registration).
“We are fortunate to not be raising property taxes this year,” Weichers said. “We have a good property and sales tax base.”
In addition, the city is estimated to collect $100,000 from the more recent Transient Room Tax (this revenue is collected from short-term rentals accommodating the overflow from the homeless shelter); $1,250,000 from Class C Road funds; and $1,406,430 from the Storm Water Fund.
“Tax collection could be higher, but we don’t want to overpredict revenues,” Jurges said. “Property values are going up, so the certified tax rate is expected to drop. There might be an indication of slower consumer spending.”
Overall, total revenues are estimated to be around $25,973,870 for the 2022-23 budget, which is $4,017,670 over the 2021-22 budget.
The city’s 2022-23 tentative budget was unanimously adopted May 3 (through Resolution 2022-23). The first public hearing for that tentative budget was held May 17. There was no public comment, so the city council extended the hearing into the next city council meeting.
On June 7, resident David Berry commented during the public hearing, continuing the conversation around employee compensation. He inquired about the processes keeping merit and COLA separate, and how many city employees were receiving both.
“The people of the city would like to know who is getting the merit increases,” Berry said.
Tingey explained it would be difficult to give an exact number or percentage of city employees eligible to benefit from merit increases. However, he mentioned city employees are not eligible for merit increases after 10 years.
“The merit increase is based on individual longevity and job performance. Some employees do not receive the merit increase based on their annual reviews,” Tingey said. “We are budgeting $250,000 but it will depend on job performance.”
Resident Runar Boman also commenting during the public hearing, inquiring about city’s rainy day fund and the cost of the installation of solar panels on City Hall located at 2277 Bengal Blvd.
“I’d like to see what those solar panels did cost the taxpayers of Cottonwood Heights,” Boman said.
Later that week, Community and Economic Development Director Mike Johnson followed up with the details. The total cost of the solar panel installation project was $516,181. However, with a Rocky Mountain Power reimbursement of 71% of that total cost (equating to $366,488), the cost to the city was $149,693.
Calling the Vote
The Cottonwood Heights Final Budget for FY 2022-23 (for the period of July 1, 2022 through June 30, 2023) was adopted on June 21, when Ordinance 384 was motioned by Newell, seconded by Birrell, and unanimously passed.
Bracken wrapped up the vote by stating, “I appreciate the work of (Tingey) and (Jurges) going through all the details. Everyone in the Finance Department needs to be congratulated.”