On August 17, 2017, the SLVLESA
Board unanimously approved a resolution to move forward with the notice of
intent to increase property tax by 5% in 2018. Utah Code Annotated §17B-2a-903
states that a service area that provides law enforcement service may not levy a
property tax or increase its certified tax rate without the prior approval of
the legislative body of each municipality and county that is currently within
the boundary of the service area.
The Salt Lake Valley Law
Enforcement Service Area was created in 2010 to provide a funding mechanism for
police services. The goal was to fund
regional police services in a more coordinated manner. SLVLESA does not provide
law enforcement services; instead, revenue is generated to pay for the police
services provided by the Unified Police Department (UPD). SLVLESA includes unincorporated areas of Salt
Lake County, Riverton City, Herriman City, Millcreek City, Kearns Metro Township, Magna Metro Township,
Copperton Metro Township, Emigration Metro Township, and White City Metro
Township. SLVLESA is
entirely funded with revenue from property taxes. The challenge is that the only way to
generate additional revenue is through new growth or by increasing the
certified tax rate.
SLVLESA did not raise property taxes from 2012 - 2016. Several years without a tax increase began to
jeopardize SLVLESA’s financial stability and erode the service level by using
new growth revenue to offset inflationary cost increases. Therefore, the SLVLESA Board embarked on a strategic planning process
to address this challenge. The plan was to develop a revenue strategy that
fulfills the service demands of SLVLESA’s communities and ensures the long-term
financial viability of the district.
The plan had three financial
Financial stability for public safety by maintaining a
15% level fund balance
Structurally balanced budget where ongoing revenue equals ongoing
Provide new resources with new growth revenue
In order to accomplish the strategic
plan and the financial goals, the SLVLESA Board adopted a resolution in August
2016 that set the direction and intent to increase property tax beginning 2017
and beyond to offset inflationary and market increases in the UPD contract. The plan set the policy direction to do small
annual tax increases rather than doing large infrequent tax increases.
In 2018, SLVLESA’s landscape will
change. The cities of Herriman, Riverton, and Millcreek have elected to
withdraw from SLVLESA. They will pay for UPD services from their city’s entity
or from a district created solely within the city’s border. SLVLESA will then
comprise of the unincorporated areas of Salt Lake County and each individual
The withdrawal of the three
cities will have a negative impact on the remaining partners within the service
area. The Kennecott landslide in 2012
greatly reduced the taxable values for the unincorporated areas of Salt Lake
County. The financial impact shifted the
taxable value from unincorporated areas of Salt Lake County to the other more
residential jurisdictions within the service area. In other words, other jurisdictions began
generating more revenue merely due to the landslide. Unfortunately, the taxable value has not
recovered from the landslide and the shift in taxable value is still contained
among those jurisdictions.
of the cities will reset the tax base for the service area and the tax base
will begin to stabilize after 2018.
The property tax increase for
2018 will help accomplish the financial goals of the service area. The proposed 5% tax increase is
estimated to increase property tax revenue by $700 thousand and will help achieve
the service area’s objectives.
SLVLESA’s goal of a 15% fund balance level is essential in funding
public safety as it provides approximately two months of reserves. SLVLESA also
borrows money in public markets, either for long-term capital expenditures or
short-term financing, and interest rates will be based on the financial
stability of the service area.
the tax increase provides an estimated 7% fund balance reserve by the end of
2018. This is essential as it ensures SLVESA will not be insolvent in
accordance with UCA §17B-1-612.
The goal is to dedicate new growth revenue for new resources. Historically, new growth revenue was used to
fund the increased market and inflationary costs of providing law enforcement
services. Ideally, tax revenue from new
homes and businesses will fund new resources.
Service levels will decrease over time if new growth revenues are
exclusively used to fund the increased costs of providing law enforcement
tax increase will earmark the new revenue for new resources such as staffing,
capital outlay, equipment, pooled services, and support. This strategy prevents service levels from
decreasing over time by exclusively using new growth revenues rather than
funding the increased market/inflation costs of providing law enforcement
current tax rate is .002031 and the estimated tax rate for 2018 will be
.002133. The tax paid on a $306,700
residence would increase from $342.60 to $359.81, which is an annual increase
of $17.21 or $1.43 a month. The tax paid
on a $306,700 business would increase from $622.91 to $654.19, which is an
annual increase of $31.28 or $2.61 a month.