PROVO — Taxpayers in Provo collectively could be paying millions more per year in property taxes and utility fees under a proposal city leaders will be considering this week.
If the budget passes, it would be the second consecutive year of property tax and utility hikes for Provo residents. And because the utility increases come under a five-year investment plan, residents' bills would continue to jump for at least another three years.
Mayor John Curtis has worked with the Provo City Council to propose the 2017 hikes. The increased water rates would generate roughly $3.4 million more in annual revenue to fund water infrastructure investments; and the property tax hike would generate about $140,000 more per year to offset inflation and pay for three new police dispatchers.
Last year's 2.28 percent property tax increase was Provo's first property tax hike in 24 years. It raised the average homeowner's yearly bill by nearly $3. The average monthly water bill increased by more than $5.
Under this year's proposal, 2017 property taxes would rise another 3 percent and the average water bill would jump another $11 a month or $132 a year.
A 2013 water master plan recommended Provo invest $61.5 million in capital improvements over the next 10 years. Under a five-year plan — which city leaders launched in 2015 to be reviewed each year — average utility bills are projected to increase to total of $65 a month or $780 a year by 2020.
The City Council will continue deliberations on the budget starting at 1:30 p.m. Tuesday. Later that evening will be the first of two public hearings on the budget, which must be adopted by June 21.
While City Council members agree that Provo must invest in its water infrastructure to avoid system failure and keep up with city growth, some are hoping to lessen the yearly impact on taxpayers. Others wants to eliminate the 3 percent tax increase altogether.
To Councilman George Stewart, Provo's mayor from 1994 to 1998, the city can't wait any longer to start saving and planning for water tank and line replacements.
"The water infrastructure has been ignored for a number of years," he said, noting that public works officials in the past seemed "reticent" to asking for rate increases, while current the public works director, David Decker, has taken up the issue.
"The reality is we could be in a real serious situation if our main water line out of the canyon broke down," Stewart said. "You don't want to gamble on your water supply or sewer system. We need to get it done. We've put it off long enough."
But Councilman David Sewell said he has proposed spreading the increases over seven years to lessen the burden on taxpayers. That will be an option the council considers Tuesday, he said.
"We have residents on fixed incomes or lower incomes, and so if we can try to accommodate that to a certain extent by getting what we need to get done over a longer period of time, I think that would be helpful to them," Sewell said.
Canceling the increases, however, is not an option for Sewell, Stewart or the mayor's office.
"The last things residents want is to be in an emergency situation," deputy mayor Corey Norman said. "We'd rather do this in a very measured, thoughtful and very forward-thinking way so we avoid those catastrophic situations and meet the demands and the growth that we know are coming."
Stewart added that Provo's utility fees are among the lowest of any other city in Utah.
"We really could have, should have in the past raised the water fees on a more gradual basis," he said.
While Stewart says he is "adamantly against" the 3 percent property tax this year, Sewell aims to reduce it so it only covers anticipated inflation costs — something he said Provo hadn't accommodated for more than 20 years until last year. He said inflation costs would only call for a 1 percent increase.
"If we were to do an inflation-plus-2-percent increase every year, in 40 or 50 years that amounts to a pretty hefty increase," Sewell said.
But Norman said the other 2 percent — about $120,000 — would help fund three new dispatchers, a budget item that is a high priority this year.
Stewart said the city could do better to trim other areas of the budget — such as the subsidies of $120,000 for golf, $335,000 for the Covey Center for the Arts or $100,000 for Downtown Alliance — to cover the cost.
"We have a $200 million budget," he said. "I don't think you should raise property taxes before you look at reducing your expenses."
Norman said the mayor's office is "always looking" for areas to trim and would not ask residents for more taxes until all possible cuts were explored.
Stewart urged Provo residents to come to Tuesday's meeting to tell the council what it should prioritize.
"Should we raise property taxes or should we reduce some subsidies?" he said. "The public needs to come and weigh in."
For more information about the budget and Tuesday's hearing, visit www.provo.org.