Cottonwood Heights short on funds

COTTONWOOD HEIGHTS — Leaders of newly incorporated Cottonwood Heights have an office, a City Council and an official spot as the county's 16th city.

Now they just want their money.

Although officially incorporated Jan. 14, the city has yet to see a dollar from either sales taxes or property taxes now being collected by Salt Lake County. City and county leaders will try to hammer out a plan today to get that money into city coffers, but those tax dollars may not be available until this summer.

"You don't just become a city and the county starts sending you money," Mayor Kelvyn Cullimore Jr. said.

In the meantime, city leaders are relying on tax-anticipation loans to pay startup costs and finance a $4 million budget for the next six months. An estimated $795,000 in sales tax revenues for that same period are not expected to hit Cottonwood Heights in full until late this summer and property taxes could be lacking until November.

"You have a period when you have a disconnect of revenues and expenditures and you have to cover that gap with an extreme amount of prudence," City Manager Liane Stillman said.

Although Stillman said the city's six-month budget is conservative, it does include a myriad of one-time expenses, like nearly $700,000 in startup costs. The city will save some cash by contracting for municipal services with the county for about $2 million instead of starting up its own police and fire units.

"It's much more complicated than I thought it would be," said Gary Harmer, city treasurer. "It's just starting a new city from scratch where there's no history of revenue flows."

The largest hurdle facing the infant city's finances won't even hit until next January, Harmer added. Due to the different starting dates for the county and city fiscal years, Cottonwood Heights will not begin its fiscal year until June.

That gap leaves city leaders trying to stretch 12 months of property taxes over 18 months of services.

Harmer added city leaders are hopeful the county may be able to pitch in to help compensate for the expected $1 million shortfall in 2006. He was not certain, however, if that request for help from the county will come in today's meeting.

"We'll be providing the services to the city, but we'll have no property tax revenue to pay for those services," he said. "We have to find some revenue to help support us."

But Sean Thomas, county auditor, said he's not sure the county will step in and make up the difference. County officials will, however, likely help city leaders find an avenue to bridge the gap and may consider negotiating service contracts.

"The county is not a bank, it's a government," Thomas said. "The manner in which tax transfers occurs is not always agreeable to the new cities because they would like the county to act as their bank."

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E-mail: estewart@desnews.com