Eagle Mountain, Saratoga Springs budgets growing despite slumping economy

EAGLE MOUNTAIN — The slumping economy has cities across Utah trimming their budgets, but Eagle Mountain and Saratoga Springs are not among them.

Though money is tight, the two northwest Utah County cities are in good financial shape, and both will see their budgets increase next year while property taxes remain the same.

Though the two cities have found their financial stability in different ways, both Saratoga Springs and Eagle Mountain have used their unique position as growing cities to weather the difficult economic climate.

Eagle Mountain city administrator John Hendrickson said he believes the city's success comes in part because it does not rely heavily on sales tax to support its general fund. The city has just seven businesses, so the portion of sales tax allotted to the city for purchases in the city is very small.

"Our point of sale is so small," Hendrickson said, "(so) we have not relied heavily on sales tax to fund activities and other things."

One-fourth of the city's total revenue comes from sales tax, including its point-of-sale portion and the share it receives in a population-based statewide distribution. Property tax makes up one-eighth of the city's revenue, with the remainder coming from a variety of sources.

As a result, there was little change for Eagle Mountain when sales-tax revenues decreased, Hendrickson said.

The city is further aided by its growing population, which Hendrickson said increased between 5 percent and 10 percent in the past year. Eagle Mountain has challenged U.S. Census Bureau estimates every year and as a result has received an increasingly larger portion of population-based sales-tax revenues.

"Growth has helped us keep up," Hendrickson said. "As a result, the city has been able to keep a pretty steady budget."

The city's proposed 2010-11 budget is a little more than $8.6 million — roughly $200,000 more than the previous year. Much of that increase is proposed to go toward roads, personnel costs and special events, Hendrickson said.

Not far from Eagle Mountain, Saratoga Springs is seeing its general fund grow to about $7.2 million for the 2010–11 fiscal year, an increase of about $1.5 million.

"I think we're doing very well considering the economic climate," said Spencer Kyle, assistant city manager.