A proposed total budget of $27.7 million for Utah's second -largest city maintains services at their present level, provides a modest pay increase to employees, and with one exception holds the lid on taxes and fees.
The single biggest change in the 1991-92 budget is the removal of the $20,000 cap on utility franchise tax payments, which will cost Hercules and several other large electricity consumers a combined total in excess of $200,000.City Manager John D. Newman said the proposal is intended to ensure that residents aren't burdened with the purchase and development costs of the 600-acre West Ridge buffer zone around Hercules. The city issued $14 million in revenue bonds to establish the buffer.
"We made a promise not to use tax money to bail out Hercules," Newman said. "In order for Hercules to pay its fair share, we need to take the cap off the franchise tax."
The suggestion has raised the ire of Hercules and other business groups, which are lobbying heavily against it. Newman says the proposal "can go either way," but insists that taxpayers be informed if they are saddled with the additional cost.
David L. Nicponski, the company's government affairs director, says Hercules relied upon the tax cap and other representations by city officials when it was annexed into West Valley City.
"I would think that any company that could be impacted by the tax on any of the utilities would be gravely concerned that if the cap is not lifted today, it could be tomorrow," Nicponski said.
The company's arguments will be presented to the City Council at the budget hearing May 16, he said. "We're just sorry it got to this point," he added.
Aside from the franchise tax cap issue, the proposed budget basically maintains the "status quo," Newman said. This year's general fund looks smaller than last year's only because it doesn't contain several one-time expenditures that have been cleared from the books, he explained.
"In fact, it is about 8 percent larger," he added.
Other funds - particularly those associated with development of the West Ridge Golf Course and the related debt service - also are significantly smaller this year.
Newman said the expansion of the city's revenue base is sufficient to fund what growth there is in the basic budget without increasing any of the major fees and taxes. Some minor fees - for filing certain petitions or copying documents, for example - may be increased, but they account for only a few hundred dollars in the total budget, he said.
Employees will see an average pay hike of 2.5 percent with an additional 2.5 percent available for individual performance compensation increases. The number of employees increases slightly in the proposed budget, with two more positions funded in the public works department.
Newman said the city's 10th budget continues to stress fiscal responsibility and a conservative funding approach to municipal services. As an example, he cited the city's plan to finance a major street lighting program with growth revenues rather than establish a special taxing district.
Compared to other large cities in Utah, West Valley City's taxes are among the lowest, Newman said, adding, "This budget keeps them low."
GRAPHIC\ West Valley City Budget
Milion Dollars '91-'92 '90-'91
General fund $22.32 $23.51
Other funds $5.4 $8.7
Where it goes:
Police $5.73 $5.44
Fire $2.4 $2.28
Public works $2.39 $2.46
Where it comes from:
(Selected revenue sources)
Property tax $3.96 $3.9
Sales taxes $7.9 $7.1
Utilities taxes $3.06 $2.77
Tax/fee hikes: Removal of $20,000 franchise tax cap that will cost large businesses more but not residents.
Property tax: $100.32 on an $80,000 home
Public hearing: Thursday, May 16, 6 p.m., at City Hall, 3600 Constitution Blvd.