West Jordan budget nears completionJun 22, 2020 12:25PM ● By Erin Dixon
By Erin Dixon | [email protected]
Balancing the city budget this year has been a tricky act.
West Jordan City has spent an average of 99.6% of its income in recent years. Neighboring cities spend less than 80%.
City council and staff nearly doubled the number of regular meetings in March, April and May 2020 (all available on YouTube), discussing plans for bringing the budget back to a healthy place.
The following information has been collected from those meetings and recent interviews.
City Finance Director Danyce Steck said the practice of spending most of the income put West Jordan between a rock and hard place when making budget decisions this year.
“This is not just a COVID-related phenomenon,” Steck said. “The budget for this year 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 over 20 employees, transfer money from the utility fund and use reserves to balance the new budget?
“I don’t think it was kicking the can down the road,” Steck said. “They were adding police officers, firefighters, a public works building, more capital projects and not identifying how they were going to pay for that. You might want the additional cable channels and you look at your checkbook, and well, I’m getting to zero every month, but I’m still going to add it anyway.”
Despite not defining additional income for these projects, West Jordan has had a healthy reserve fund. It was as high as $12 million in 2018. Now that reserve fund has been slowly decreasing the past two years. Why?
“High turnover for police, fire and city employees was the saving grace for the city,” Steck said. “I don’t think anyone brought that to light in the past. What was saving them is that they were not able to fill all of their personnel positions. Well, at the end of the day, we came in OK. When you get to a point where you've built a city that’s very strong now in their management team, we don’t have those vacancies anymore, we don’t have that extra money.”
Utility Fund transfer
As a way to balance the budget this year, some money is going to be transferred from the Utility Fund to the General Fund. There has been a lot of confusion why there is extra money in the Utility Fund, after city leaders said in recent years they needed to raise water rates to pay for the increase in water costs and infrastructure maintenance.
“I think when the council raised water rates, it didn’t have good information,” Councilmember Kelvin Green said. “I think it was one of those decisions that a decision had to be made. Now that we're figuring it out, there is some money there, and what’s the best way to use it.”
Using extra money from the utility fund could prevent the need to raise property taxes this year.
Cultural Arts Center
While most city departments have made cuts, some entities that have not been modified. City officials planned to give the Arts Council, a separate 501(c)(3) nonprofit organization in the city, $60,000.
“We’ve asked every department to take cuts,” Councilmember Kayleen Whitelock said. “Someone should have a conversation with them and say, ‘Look, we’ve had to make cuts; we need you to help us.’ We also fund the museum, which also hasn’t been able to be open. I think in all fairness, we need to look at all outside committees.”
Green agreed that there may be a few more adjustments necessary, even if savings is a drop in the ocean.
“Everybody needs to feel the pain,” Green said. “Five thousand dollars in a $5 million budget is nothing, but the fact is that symbolically it does need to match the equivalent cuts that the fire department and the police department are taking.”
Another $6 million is still earmarked for the construction of the cultural arts center, with money that came from the sale of city property.
“We were asked to put the Arts Center in to open up the discussion,” Steck said. “Design is going to finish and the council has instructed us to hold. That money is budgeted, but we will not start construction until we find out what kind of economic changes will happen over the next year.”
Steck is concerned that city leaders also need to find steady revenue to support the center or end up again where they were with bills that have been too high to be supported easily with resources.
“We’re really working with them on what the operation and maintenance is going to cost,” she said. “Again, that same concept. You add something you’ve got to identify how you are going to continue to operate that.”
“Before we move forward with construction, we’ve got to make sure that we’re already balanced, that we’ve restored the things we’ve taken away for the next year like any employee increases or benefit changes.”
City officials expected sales tax revenue to plummet in March 2020 after Utah Gov. Gary Herbert enacted a stay-at-home order and many businesses were forced to close.
“March sales tax did not come in lower than we anticipated in our city,” Steck said. “In other cities, it came in lower. The reason is we really have a lot of grocery stores in our city. They all had the hoarding effect. You saw an extreme increase in their sales tax revenues that helped to boost the fall of all the other businesses that came down. The second boost is home improvement stores.”
However, April sales tax has not yet been reported, and the city may have lost more sales tax as the city was still under the stay-at-home order that month.
Additional changes to the budget may be coming in the following weeks. City Journals will publish any significant updates.