THE STATE OF UTAH
COUNTY OF SEVIER
CITY OF RICHFIELD
At the City Council
In and For Said City
August 3, 2021
Minutes of the Richfield City Council special meeting held on Tuesday, August 3, 2021at 7:00 p.m. in the Council Chambers of the Richfield City office building located at 75 East Center, Richfield, Utah. Mayor David C. Ogden presiding.
- OPENING REMARKS
- PLEDGE OF ALLEGIANCE
- ROLL CALL
- PUBLIC HEARING – TRUTH IN TAXATION
- MEETING ADJOURNED
- OPENING REMARKS were offered by Mayor Ogden.
- PLEDGE OF ALLEGIANCE was led by Kathy Christensen.
- ROLL CALL. present: Mayor Ogden, Bryan Burrows, Kathy Christensen, Todd Gleave, Kip Hansen, Connie Nielson, Michele Jolley, Tyson Hansen.
Others present: Michael Snow, Angie Stubbs, Amy Myer, Amy Garren-Clark, Dave W. Clark, Barbara Crowther, Natalie Gleave, Norlen Dalton, Nikki Baldauf, George Baldauf, Wendell Olsen, Terrill Olsen, Michelle Olsen, Greg Jensen, Keith Mogan, Natalie Mogan, Adam Robinson, Jeanna Ogden, Trent Lloyd.
- PUBLIC HEARING – TRUTH IN TAXATION. At 7:04 p.m. Mayor Ogden opened a public hearing to receive comments on a proposed increase to the property tax rate. Mayor Ogden explained that the price of everything we use to take care of our City has gone up, up, and up again. We think that we might be derelict in our duty if we did not do something like this.
Nikki Baldauf is a business owner and she wanted to better understand the tax increase, where the money is going, and what it will be used for. Her taxes are more than a homeowner because she is a business owner. She does not have a retail business. Her business is one-on-one because she cannot work on 20 people a day, but she works very hard for her money. As stated, everything has gone up and so have her supplies, utilities, etc.
Tyson Hansen explained that all of the employees have the community’s best interest at heart. We try and stretch the money as far as we can. The increase proposed would generate an additional $300,000. We have not raised taxes in at least 30 years. We have seen at least a 25% to 30% increase in everything.
Our infrastructure is lagging. We have many areas where old water and sewer pipes are needing to be replaced, so the aging infrastructure is a concern. We have seen some growth the past few years and our Police Department has seen a big uptick in calls to the point that we have surpassed the calls the County has received. We are adding another full-time officer to our department.
Our golf course needs some major repairs and the proposed budget has $115,000 for much-needed golf course improvements. Our library is aging and has been neglected so the budget includes $40,000 for improvements. The fire department needs a new brush truck because the one we have is not reliable. The development of the new park is costing 1.3 million dollars. We just recently put in a new sewer lift station to accommodate the growth on the south end of town. It cost well over half a million dollars and we did not borrow any of the money. It was all self-funded by the City.
Ms. Baldauf said if everything is old and falling apart, did we not plan for this? Did we not have gradual increases? She questions what we are doing and why we have not been doing small increases. Why have we been waiting so long so that we have a huge increase?
Councilmember Burrows stated that he came on the Council in 2009 and the City was laying people off. People say do not raise taxes and we say we are not going to raise taxes and we fight this because we do not want to raise taxes, but we do need to have some small increment increases every 3 or 4 years.
Councilmember Hansen stated that it is recommended that cities increase their rates every 3 to 5 years. The reason this does not happen is that no one likes to raise taxes so it is easy to keep kicking that can down the road. None of us are full-time politicians, so we squeeze and squeeze until we get nearly to a crisis and we are not to that crisis yet, but we are trying to advert it. As we live and die on sales tax, we can see that is a precarious place to be and a very unreliable funding source. Property tax is the most reliable, the soundest, and the one that punishes the Council the most. We can only deal with the situation we have now.
Jeanna Ogden asked Mr. Hansen what the City’s biggest expense is and how has that expense been addressed in the last little while. Like, how has the police department changed? Mr. Hansen stated that the biggest expense is personnel, wages, and benefits. He has compared our wages with other communities and he stated that no one in our City is overpaid.
Councilmember Burrows stated that in the administrative budget salaries total 18% of the budget, 1,443,781. Public safety salaries are 28% of the overall budget, 2,247,533, and the police department is 23% of this. Highways and public improvements, 1,850,758 which is 23% of the budget. Parks and recreation which is the golf course, pool, parks, library, and recreation is 23% of the overall budget and of that 23%, $560,000 is the golf course and $421,000 is the swimming pool. That is where the 7.8 million dollars go.
Ms. Ogden asked how the police departments pay ranks in the State. Councilmember Burrows noted that we are on the low end. The City has worked hard to come to implement a step and grade to try to bring our lower-paid officers up so we can retain them. It is a struggle because of the cost of their benefits.
Norlen Dalton wanted to clarify that the $300,000 would be on top of the 7.8-million-dollar budget. It would be in addition to the 7.8 million dollars. The tax notice was a little confusing when it came to what Richfield City portion was because every other entity on their shows an increase. There was a 14% increase in the overall taxes.
Chief Lloyd explained that the City was only allowed to collect $700,000. And that is all we have ever been able to collect. Whether property taxes go up or down, the City will only collect that amount. If you have a big player who helps pay for a lot of the taxes step out of the game, then everyone else is going to have to pay a little bit more. He thinks that is what happened this year.
The way Mr. Hansen understood it was that the centrally assessed property, which is assessed by the State, like telephone lines, power lines, broadband, etc., came in at a 40-million-dollar deficit this year. When you have that kind of a deficit, all of the rest of us have to pick that up.
Chief Lloyd stated that we have been trying to run a business off the same amount of money with a revenue source, sales tax, that fluctuates wildly. You need a more stable revenue stream to run a business.
Councilmember Hansen stated that sales tax is interesting. The last year, however you feel about those CARES act checks that we got in the mail, that does put money into circulation. People buy automobiles when they normally would not have. They make large purchases and smaller purchases and that is good for us as a municipality when that happens. When people are buying more within our municipal boundaries, a portion of that comes back to us and that is a good thing. Now, we are living in a situation that everything you go to buy is out of stock and you cannot get it.
This next year, even if people had money to spend on it, they cannot find what it is that they want to spend it on. We cannot predict what that is going to do to us as a City. We can extrapolate and say that based on this model, it is going to go down and it may go down a whole bunch compared to last year because of that artificial bump we got by that money that was infused into the economy. We cannot budget on that when it is a major part of our budget. The property tax, the people who are homeowners and business owners are the solvency of our community. That is where we get that stability.
The City is counting on you staying in those homes and staying in those businesses and paying your property tax because that is something that is not going to do what the sales tax. The valuation on the property can change, but even with those changes, the City does not get a windfall because of the certified rate that we have adopted. We have to change the rate to collect more money. It is scary to Councilmember Hansen how much we have relied on sales tax.
Councilmember Christensen noted that another reason sales tax is scary is because people used to shop locally and now a lot of sales are done on the internet. We do get a portion of it, but it has to go to the State and be distributed under the current formula so only a portion comes back to the City.
Councilmember Nielson talked about the airport and when the built onto the airport, the City received 90% of the funding for that through FAA grants.
It was asked if the department head comes up with the budget. Mr. Hansen stated that it is a collaboration between him and the department heads.
George Baldauf felt that the City deserves every penny it gets. He does not think that anyone is picking on the City. He has worked with Mr. Mogan and he knows that the City has some awfully old lines in the system. He thinks what all the people get upset with is that something needs to be done with the County and the School District. They just automatically get it. The City has to beg for $80 when the school district gets another $200. He would like to see the City get half of what the school district gets.
Councilmember Burrows stated that the City has tried to be creative and do some projects in-house instead of bringing in engineers which is a big increase in costs. So, there are some things that we can do to try and get the most out of the funds.
Councilmember Hansen stated that it all makes sense and we are not going to solve all of those inequities here. The bottom line is that it is all dollars and cents to us as taxpayers. We could ask for a bigger increase by statute than what we are. He hopes that in 5 to 7 years the sitting Council will be having the same discussion and hopefully by then we have found some creative ways to level that field somewhat to help the municipality in the allocation of those public funds. He hopes future councils will take the initiative to move this forward as it should be.
Michelle Olsen understands the need, but when property values go up and down where does that extra money go? She used to live in Logan and as the property taxes went up and down then there was extra money for different departments in the City. When property values went higher, then they got extra money for different projects and the funds could be put aside for five years. Is there a way that we can set that up here so as the property values go up that we do have a little bit extra?
Amy Garren-Clark stated that the City is not allowed to get a windfall or keep the windfall that is why they passed the truth in taxation law. The City only gets the same amount that they did last so when values go up, the tax rate is supposed to drop. She explained that there was a loss in the funds from the centrally assessed property, losses in personal property, and other losses that affect the tax rate negatively. That is why property taxes increased.
Ms. Garren-Clark stated that the County lost 56 million dollars in centrally assessed properties.
Terrel Olsen stated that he is here to learn. He wondered why we are asking for more money when the property values have gone up. He wished knew better the “how comes” and the “whys”.
Mr. Olsen said that as a multiple property owner, he has to deal with the City and the water and shutting things off and turning things back on. He appreciates the City employees and how they take care of things. He loves knowing the guys by name and having their cell phone numbers and he knows that he can contact them whenever he needs to.
Mayor Ogden closed the hearing at 8:03 p.m.
- MEETING ADJOURNED. At 8:04 p.m., Motion: Adjourn, Action: Adjourned, Moved by Kathy Christensen, Seconded by Kip Hansen. Vote: Motion carried by unanimous roll call vote (summary: Yes = 5). Yes: Bryan Burrows, Connie Nielson, Kathy Christensen, Kip Hansen, Todd Gleave.
PASSED and APPROVED this 14th day of September 2021.