Eagle Mtn. notes $1.1 million surplus

EAGLE MOUNTAIN — When Eagle Mountain officials announced the $1.1 million budget surplus for 2004 at a recent City Council meeting, there was spontaneous applause.

"It's obviously very good news," said city recorder Chris Hillman who pointed out that not only does the city have the general fund surplus, but it's also the first time the young city has finished and submitted its annual audit by the Dec. 31 deadline.

In other years, the accounting has been late and the city has paid $100,000 in penalties.

Mayor Kelvin Bailey said the surplus is more than good news. It means the city now has funds to go forward with major infrastructure, park and road improvements and to put money into a reserve fund — a fund that was all but drained two years ago when the city posted a $480,000 deficit.

Bailey and Hillman say the vastly improved financial picture is largely due to the city's assessment of more realistic impact fees — fees paid by developers for new housing construction in the community.

"For years the city charged builders nominal impact fees leaving the city unable to fund needed improvements," Hillman said. "Now we have collected more than $3.2 million these past two years to help pay for future parks, roads, and utility infrastructure as well as help reduce our debt."

The fees, which were set at $95 per house before 2003, now top out at about $7,500 per house.

"It literally depends on where you live," Hillman said. "It depends on whether you live within a special improvement district, within the Timpanogos Special Service District boundaries, near the water treatment plant we need to build. It's very complex."

"What it means is the ship is no longer sinking," said Bailey. "The holes are plugged and some water is still seeping in, but we're moving forward full steam ahead.

"Our biggest challenge will be restructuring debt, especially our gas and electric bonds. But we have big plans and big ideas to continue moving this city forward and making it one of Utah's premiere communities."

Hillman said the city's utility funds are also doing better financially. In 2003, the city utilities recorded a $1.2 million loss but for 2004, the books show a $276,000 surplus.

Eagle Mountain provides water, sewer, natural gas, electric and telecommunications services. Most of the surplus was recorded in the water utility with losses still showing for the gas, electric and sewer utilities. There was a modest gain in the telecommunications services.

Bailey said the city is working to restructure the debt on all of the utilities which should lower the costs and perhaps make it possible to reduce utility rates for residents.

Developers in the community said with the surplus, they now expect the city to begin putting in the parks and improvements for which the impact fees are supposed to pay.

Dale DeLlamas, president-elect of the Utah Valley HomeBuilders Association, said by state statute the city has to spend those funds within six years' time.

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