City considers funding fire services through property taxesJan 31, 2023 02:36PM ● By Cassie Goff
Heavy Rescue Team 110 from Cottonwood Heights responding to a Holladay City fire. (Photo courtesy of Unified Fire Authority)
The Cottonwood Heights City Council is considering altering how they fund their fire services. Currently, Cottonwood Heights pulls their annual member fees for Unified Fire Authority (UFA) from the general fund. However, they do have the option to create a taxing district to fund fire services directly from tax collection.
UFA provides fire response and services for 16 different municipalities throughout the valley, including Cottonwood Heights. They are primarily funded through member fees which each municipality pays annually.
Cottonwood Heights has historically paid those member fees through their general fund budget. UFA has been listed as a single line item, ranging from $3.95 million to $4.3 million during the past four year. This requires Cottonwood Heights to account for any increases to the UFA member fees within their city budget.
“Our responsibility for our member fee, to belong to UFA, comes from the general fund. We have to account for increases in general fund dollars,” said Cottonwood Heights Mayor Mike Weichers.
UFA typically increases their member fees to cover personnel costs related to cost of living and merit. Their current projections show member fees are anticipated to increase by half a million dollars.
Holladay, Riverton, Herriman and Cottonwood Heights have been the only four UFA members to pay their annual fees directly from their budgets. In contrast, 10 of the UFA members pay their annual member fees through Unified Fire Service Authority (UFSA), a special service area funded by a taxing district. This allows their fire service member fees to be paid directly from residential taxes.
“Cities that are a part of UFSA belong to a taxing district that can increase taxes to pay for fire services,” Weichers said. “If there is an increase to the member fee, they do not have to account for increases to their member fee within their general fund. Their fire district fees increase accordingly to account for member fee.”
Riverton and Herriman have recently switched their funding to be through a special service area taxing district. Cottonwood Heights and Holladay are considering if creating a taxing district would be beneficial for them as well.
“We are on different tax trajectories. Their growth is going add more taxable income to them to be able to accommodate for the increases to the cost. We don’t have that luxury,” said Councilmember Shawn Newell.
In addition, municipalities that go through UFSA to fund their fire services have to go through the Truth in Taxation process every time UFA increases their member fees.
There would be additional costs related to the Truth in Taxation. Cottonwood Heights would need to pay for noticing and education materials for residents. In addition, separate audits for the city budget and taxing district would be necessary.
“I am concerned about our staff taking on more hours to manage (the special service area taxing district) and the outward costs of noticing and auditing annually,” said Councilmember Ellen Birrell.
A handful of advantages for switching to a taxing district were noted by the council including putting less stress on the city’s general fund and more transparency for the public.
“It would be a complete fund separation,” added City Manager Tim Tingey.
If the council chooses to fund fire services through a taxing district, they will need to go through a very specific process outlined by the State of Utah. They will have to pass a resolution with the intent of creating a taxing district. Then, notice will need to be sent out to all property owners within the affected area with an appropriate timeline for any residents to voice their protests or concerns. The council would then have to adopt a resolution to create the special service area taxing district. That paperwork would need to be processed by city staff and sent to the governor’s office.
The council will continue their deliberation during their annual budget retreat.