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Tough Times Ahead For Utah Cities

Article Date: 
28 January, 2011 (All day)


  MORGAN- Even as marginally improving numbers celebrate the nation’s emergence from economic eclipse, many local Utah officials say they’re still struggling to escape its shadows.

   An ongoing survey by the Utah League of Cities and Towns found that 65 percent of responding mayors and managers statewide said they were “less able” to meet the financial needs of running their cities in 2010. 

   Equally concerning the survey found is that 57 percent believe they’ll be even “less able” to address those same needs in 2011.

   Morgan Mayor Jim Egbert acknowledges inheriting a “few problems” when he took office a a year ago. Including a budget based on revenue projections from the city’s halcyon growth years of 2005-2007. But those go-go years have come and gone.

   “We looked at it deeply this year and we’ve had to make some adjustments because of a lack of revenue,” Egbert said, adding that Morgan has already cutback two part-time employees and is looking to cutback an additional full-timer. The city is also reworking its services contract with Morgan County, which amounts to 29 percent of the total budget. Among targeted items is reducing police coverage from two officers down to one. 

   Sales tax revenues also remain down, although he says he’s heard reports of a bump in sales tax monies because a local car dealer enjoyed a banner year in 2010. 

   “In the end, Egbert promises, we’ll be much better prepared to deal with the economy we’re actually facing.”

   The Utah League’s survey results are especially telling when comparing responses given to the same questions asked four years earlier prior to the onset of the Great Recession. At that time, only 28 percent of mayors and managers felt less able to meet the 2006 needs of their cities and constituents, while 37 percent feared they would be less able to meet obligations. 

   Reasons for these concerns are simple. Revenues coming into city coffers are falling or holding steady at best, while the expenses of running a city, despite the federal governmental assurances that inflation is being kept in check, continue to spiral upward.

   Seventy-four percent of mayors and managers said rising employee healthcare benefits were having either a moderate or major impact on budgets. But there was plenty of other blame to go around, including continuing infrastructure needs (70 percent combined moderate or major impact); rising prices, inflation and cost of living increases (67 percent combined); employee pension costs (66 percent combined); increasing public safety needs (61 percent combined).

   Employee wages and salaries only generated a 52 percent response, indicating that’s where much of the current belt-tightening is taking place. In a related response, 51 percent said development projects have had to be delayed or cancelled altogether because of the downturn.

   Egbert said Morgan will eventually need to make several large equipment purchases to replace an aging fleet of snowplows and trucks.

  Meanwhile, only 21 percent of mayors and managers responding to the Utah League survey said their city’s tax base was increasing. Twenty-eight percent said it was actually decreasing, and another 21 percent said it was flat. Compare this to the 2006 survey in which 60 percent felt the value of their city’s tax base had increased and another 39 percent felt it hadn’t changed. Only 1 percent at that time felt the city’s tax base had decreased in value.

   Citing the impacts on the citizenry and Main Street, 85 percent of those answering the survey said that their cities had seen an increase in unemployment among its residents, while 51 percent noted an increase in business closures.

   Respondents also expressed concern that the bursting of the housing bubble in Utah has hurt their cities. The biggest concerns noted were declining property values, increasing utility bill delinquencies and delinquencies for utilities service fees or taxes, and property maintenance issues. Seventy-one percent of the mayors and managers surveyed said they had also dealt with a decrease in building permit revenues.

   Egbert said building impact fees, once a major windfall for Morgan, remain almost non-existent.