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S.L. City Council approves sewer rate, property tax hikes in 2017 budget

FILE - Salt Lake City Mayor Jackie Biskupski speaks at a press conference at the City and County Building in Salt Lake City on Wednesday, May 31, 2017. Despite last-minute realization of a more than $1 million shortfall in revenue, the Salt Lake City Coun
FILE - Salt Lake City Mayor Jackie Biskupski speaks at a press conference at the City and County Building in Salt Lake City on Wednesday, May 31, 2017. Despite last-minute realization of a more than $1 million shortfall in revenue, the Salt Lake City Council on Tuesday voted to approve the city's $273 million budget for the 2017 fiscal year.
Kristin Murphy, Deseret News

SALT LAKE CITY — Despite last-minute realization of a more than $1 million shortfall in revenue, the Salt Lake City Council on Tuesday voted to approve the city's $273 million budget for the 2017 fiscal year.

Using current and future funds from property tax revenue to adjust for the shortage, the City Council voted unanimously to pass the budget with only a few changes to Mayor Jackie Biskupski's proposed budget.

Some highlights:

  • The first of several sewer rate hikes to replace the city's aging wastewater treatment plant — part of a five-year plan that's expected to increase sewer rates 127 percent by 2021 and eventually raise the average household's sewer bill from about $195 a year to $442 a year.
  • A 21 percent property tax increase to provide an additional $3.9 million a year to the city's library system. For an average Salt Lake City home worth about $247,000, the property tax hike would increase the annual bill by about $20, from $95 a year to $115.
  • A 1 percent pay raise for Salt Lake City police officers — with a commitment to pursue a more aggressive raise next year. The agreement was made in order to end an impasse with the Salt Lake Police Association, which lobbied for a 4.5 percent increase.

Last week, the council faced a last-minute shortfall of more than $1 million due to an interpretation of new state tax rules that went into effect this year. The council voted to use "tax stabilization," a process using current and future funds from property tax revenue, to adjust for the shortfall. City Council Chairman Stan Penfold likened it to betting on future growth to make up for the shortage.

"It's fortunate the city has seen strong growth lately, and that we had additional property tax dollars this year that can cover our projected needs," he said. "We believe in our city's future, which is why we built a financial base for the upcoming year sustained by that growth."

A big-ticket item that was not included in the budget was Biskupski's proposal to transfer the Rose Park golf course into the city's public work's department to help make the city's struggling Golf Enterprise Fund more viable.

The council agreed — despite past reluctance — to use $400,000 from the general fund to help keep the golf fund afloat. Penfold said city officials plan to revisit the issue this summer.

He called it a "temporary subsidy" while the council and mayor work to come up with a solution on how to create a "sustainable" golf fund.

Penfold said the council voted to approve the sewer rate hikes and library property tax increase because both departments needed to capture new revenue to pay for necessary projects and maintenance.

"The library hasn't had a property tax increase since 2004," Penfold said, adding that the council was impressed by the department's budget proposal. "The library is incredibly popular and the services continue to expand to the community."

For sewer, Penfold said the rate increases are "directly related to our need to upgrade" the city's wastewater treatment plant, which is over 60 years old. He also pointed out the city is facing new federal requirements coming into effect in 2025, and in order to comply, the city needs to make some significant changes at the sewer plant.

As for the 1 percent pay increase for police officers, Penfold said he was happy to see an agreement made with the Salt Lake Police Association. Last week, officers crowded the City Council chambers asking for a larger pay increase.

Penfold said had it not been for the $1 million shortfall, the City Council may have been able to grant a larger pay increase.

"The shortfall made it very challenging," he said. "It just wasn't a reality. But I think the police department acknowledges that."

Penfold said the city has committed to begin negotiations with the police association sooner next year so a larger pay increase can be more obtainable.

Biskupski thanked the city's finance department in a news release after the council approved the budget.

“Building and adopting a city budget is a year-long process that requires thoughtful analysis and compromise from everyone involved. I’m pleased my administration and the council could work together on funding needs that support of quality of life, while still demonstrating fiscal responsibility for Salt Lake City residents,” Biskupski said.