West Jordan budget discussion begins for 2021–2022
Jan 25, 2021 11:26AM ● By Erin Dixon
Budget discussions began in December 2020. (photo/Jonathan Natuik)
By Erin Dixon | [email protected]
Though a budget is made once a year, the discussion and planning around it never stop.
West Jordan operates on a fiscal year (FY) budget, which means the year runs from July 1 to the following June 30.
Discussions for the FY 2021–2022 began in December 2020. Staff and council sat down (virtually, of course) and discussed priorities.
Is there a property tax increase this year?
The following are thoughts from the council about an inflationary 1% property tax increase, which would provide an additional $153,000 income for the city. The idea is that instead of raising taxes in a large portion every several years, a small but regular increase will make it more manageable to continue revenue to the city as well as make it more predictable for the residents.
In the December meeting, West Jordan City Councilmember Kayleen Whitelock was not sure that the coming year is the right time to start a yearly inflationary raise.
“I’m in favor but not this year,” she said. “We haven’t done it in the past, and this year when people are unemployed and just coming out of this, hopefully coming out of this viral spin, I don’t think it’s a good year to initiate it.”
Councilmember Zach Jacob said that an inflationary raise of 1% most likely won’t raise anyone’s bill but keep it the same.
“The state law is to lower your taxes every year by default,” Jacob said. “We have to lower it every year unless we raise it. Every year the property value goes up ,the property tax rate goes down. It’s putting the brakes on the car going down the hill.”
Councilmember Kelvin Green added that for most residents the payment may stay the same, but others will experience it differently.
“Fundamentally, it seems like good policy except it seems that if the property value well exceeds inflationary rate it creates a hardship for a couple of sectors of society, [the elderly and renters or low-income],” Green said.
General Fund
In 2019, “the city spent a dollar for every dollar it brought in,” Danyse Steck, Administrative Services director said. This left little to put into the general reserve, a portion of money that can act like a savings account for the city.
In December, Steck said, “The budget for [2020] was planned to be spent $2.7 million in the hole, and we’re going to end up in the deficit using reserves in the neighborhood of $3 million.”
What brought the city into such a tight spot, that forced the government to lay off more than 20 employees, transfer money from the utility fund and use reserves to balance the new budget?
“They were adding police officers, firefighters, a public works building, more capital projects and not identifying how they were going to pay for that,” Steck said.
Of all the council members attending the December meeting, it was 100% consensus that the city needs to have 25% of its yearly expenditure in reserve, about $15 million. Currently reserves hover around $12 million or 19%.
How long will it take for the city to get there?
“We are very grateful for the government's assistance during this health pandemic, leaving me $4.7 million of additional one-time money this year,” Steck said. “It is possible that we say we want to dedicate that one time money to just building those reserves.”
The money left over is not government assistance money. Rather, city leaders spent money on things they didn’t anticipate and were reimbursed for those pandemic expenses.
“That money is meant to pay for some of the PPE, some of the supplies and services we’ve already paid out of the general fund,” Steck said. “What that’s done is freed up other money to be allowed to build up reserves.”
How easily is general fund money spent in future, if it is saved for now?
General fund money is always available to the city to spend as needed or wanted. Whitelock was concerned that the current council may work to build up a reserve but that money could be easily spent with future councils.
“I want the assurance through legislation that it’s going to stay that way,” she said. “I don’t want to see this council make all the hard choices and have a future council undo it and see the city in the same position we found ourselves last year.”
Chief Administrative Officer Korban Lee responded, “There’s not anything you can do as a body today which would bind that future council that they couldn’t undo if they wanted to.”
Councilmember Kelvin Green added his thoughts as well.
“We could require—I think this would be a good idea—that any modification requires a public hearing,” he said. “Then the public has a chance to come in and ask why they are doing that.”
Status on the community theater
There are two perspectives on the $6 million that is earmarked for the construction of the community arts theater.
“[There’s] almost $6 million, that’s year’s worth of keeping our employees,” Worthen said. “I don’t want our money sitting. If you’re broke and you got to pay your bills, you don’t just leave a bunch of money sitting in a savings account.”
Green said that on the flip side, “In this time where we come out of this COVID we’re going to need some things that make the city feel better. I’d be OK getting it started sooner rather than later if we can get some corporate sponsors, twist the county's arm money and get some ZAP (Zoo, Arts and Parks) money. I don’t want to use that money for some other project because we did that when we sold a building, and using one-time money for ongoing expenses is never a good idea.”
For more background on recent city budget activity see : https://www.westjordanjournal.com/2020/06/22/318953/west-jordan-budget-nears-completion
https://www.westjordanjournal.com/2020/04/27/307510/how-west-jordan-is-handling-the-covid-19-crisis
The budget for the coming fiscal year will not be final until the end of June.
