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Truth in Taxation

Truth in Taxation. Public Hearing August 11, 2011 7:00 pm. A Balanced Budget. On May 3, 2011, the West Bountiful City Council adopted a balanced tentative budget maintaining current service levels. Why Increase Property Taxes?. The City has not applied regular funding to streets maintenance

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Truth in Taxation

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  1. Truth in Taxation Public Hearing August 11, 2011 7:00 pm

  2. A Balanced Budget On May 3, 2011, the West Bountiful City Council adopted a balanced tentative budget maintaining current service levels.

  3. Why Increase Property Taxes? The City has not applied regular funding to streets maintenance The current budget for the Capital Streets Plan remains unfunded by $8.1 million

  4. Proactive maintenance for Streets will save millions of future dollars. • Option #1 60 years no maintenance • 1 Rebuild at 30 years ($5.00 per square foot) • Total cost for rebuild only – 20 miles @ $5.00 sf = $15,312,000 • Option # 2 60 years with maintenance • Four slurry seals, two overlays with rebuild at 60 years ($3.00 per square foot) • Total cost for maintenance/rebuild plan – 20 miles @ $3.00 sf = $9,187,200 • CARING FOR STREETS SAVES $6,124,800

  5. Examples of Capital Streets Projects • Leading Road Infrastructure Projects • 700 West from 1000 to 1600 • 1550 N from 700 W to 725 W • 800 West from Porter to 2350 • 725 West • 800 West from Pages to DSB • 400 N from 1100 W to 1450 W • 800 W from 100 N to Pages • 900 W from Pages South • Current Total Unfunded Street Liability is $8.174 million

  6. Funding Sources for Streets • B and C Road Funds • Fuel tax collected and redistributed by the state based on miles/type of road • Impact Fees • Can only be used on collector roads (500 S, 500 W, and 400 N) • Federal, State, and Private Grants • Rarely available or predictable • Use of Fund Balance • Currently 6 to 7 years to accrue for one project • Currently 31 projects over next 20 years • Fund Balance alone stretches projects from 20 years to 200 years

  7. City Efficiencies • Full Time benefitted employees reduced from 25 to 20 (20% reduction) • 401(k) benefit taken from employees saving $100,000 per year • Employee contributing additional 10% to benefit package • No COLA or salary increases for FY 2012 • Constant effort to hold line on overtime and comp • Transferred Justice Court to County • Spending reductions and freezes last three years • Contracts evaluated and renegotiated or rebid • Grant for solar 10% reduction in electric costs

  8. Davis County Comparison – Tax Rate

  9. What does it mean to me? Median tax-assessed home value

  10. Effect of Proposed Property Tax

  11. Conclusions • The City has reduced costs to balance operating budget, but does not have long term funding for Streets Capital Plan, consisting of: • 31 Projects across the community • Maintenance of existing street to prolong life and save money • Replacement of dead streets in connection with other utilities (Water, Storm Drain…) • The Plan is underfunded by $8.1 million • The proposed property tax increase averages about $10 month for a $200,000 home

  12. Conclusions • This increase in property taxes will allow for the proper maintenance of City streets on a pay as you go basis. • Maintaining the streets properly will save $6.9 million per streets life cycle.

  13. General Fund Revenue Summary

  14. How does the City use all the money?

  15. What about Sales Tax? • West Bountiful receives approximately $1.56M per year in Sales Tax Revenue • Of this revenue, $458,000 is committed to outside agencies by Sales Tax Sharing Agreements: • Bountiful City – 14% (Commons) to 35% (Gateway) • Term of agreement is 50 years • Developer – 43% (Commons) • Term of agreement is 10 years

  16. Sales Tax Distribution • If you were to buy a computer from Costco for $1,000, your final payment would be $1,066.00 including sales tax. • The sales tax would be distributed as follows: • State of Utah$ 47.00 • Davis County$ 8.00 • Shared based on population $ 5.00 • Shared by interlocal agreement $ 2.85 • West Bountiful City$ 2.15 • Rap Tax $ 1.00

  17. Reasons for the proposed Increase • Proactive maintenance for Streets will save millions of future dollars. • Option #1 60 years no maintenance • 1 Rebuild at 30 years $4.50 to $5.00 per square foot • Option # 2 60 years with maintenance • Four slurry seals • Two overlays • No rebuild until end of 60 years $2.35 to $2.75 per square foot • For ½ mile of street 29’ times 2,640’ = 76,560 Sq. Feet • Option #1 Cost is $382,800 • Option # 2 Cost is $$210,540 • Savings of $172,260 per half mile of street • The City currently has just over 20 miles of streets • Total savings from Option #2 is $6,890,400 per rebuild cycle • CARING FOR STREETS SAVES MONEY

  18. Streets Maintenance Cycle

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