The Richfield City Council is wrestling with ways to raise much-needed revenue for street repair, capital improvements and employee salary benefits.
No matter what the final decision, it appears tax increases will be inevitable for Richfield residents, who already pay the highest taxes of any community in Sevier County.The council is looking at a combination of tax increases and budget cuts to make things balance. Options currently being considered are a one-half percent increase the local sales tax and boosting the city's franchise tax by 3 percent. Plans also include cutting about $40,000 from general fund programs.
The proposal to increase the franchise tax is drawing heavy fire from utilities.
Officials of US WEST Communications and Mountain Fuel Supply Co. have voiced opposition to the proposed franchise tax, saying it would be discriminatory against a specific industry and that such taxes make city councils less accountable to the public.
The council cites the need to come up with $250,000 for street maintenance and repair, $75,000 for capital improvements, $65,000 for debt service and $65,000 for employee salaries and benefits. Proposals are being considered following recommendations of five special citizen committees that were appointed to study government efficiency and recommend ways for financing city programs.
The sales tax increase would raise the most money, $310,000 annually, based on $62 million in sales. The franchise tax would add $139,000 each year to the city's coffers.
Dennis Johnson, US WEST representative, urged the council to reconsider adopting higher utility franchise tax fees. "Imposition of a utility franchise tax increases state sales and federal excise taxes because the franchise tax itself is subject to the assessments of these taxes."
Wayne Saltzgiver, Mountain Fuel area manager in Richfield, cautioned council members that, "A franchise tax sends out an anti-economic development signal."
City officials are confident they can cut the general fund by $40,000. This would include trimming one employee ($28,000), reducing travel ($7,000), cutting consulting fees and service ($2,500) and reducing utility costs through energy-saving methods ($2,500).
City officials say they can no longer ignore the deplorable condition of city streets. They say there has never been a long-range program that would allow a specific amount of expenditures each year for maintenance and repair. On one survey, streets were given the highest priority among the city's needs by its residents.