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Herriman Journal

City approves tentative budget, expected to accept public input until June 12

May 09, 2024 01:05PM ● By Elisa Eames

The city council and other city officials discuss the administration budget at a work meeting on Feb. 28. (Screenshot courtesy City of Herriman)

It’s that time again. 

Because the city’s fiscal year runs from July 1 to June 30, the Herriman City 2022–2024 budget is set to expire on June 30 with the end of fiscal year 2024. The biennial budget is approved two years at a time, so this fiscal year’s numbers were approved in 2022. “It’s done in two-year increments for efficiency,” the city said. “And amendments can be (and are) made throughout the year as things come up.” 

At a city council work meeting on Feb. 21, City Manager Nathan Cherpeski reiterated three budget strategies from the city’s Strategic Plan: develop and maintain a strong foundation of essential services, create and sustain a high quality of life for residents and foster a sense of community through public engagement and interaction. 

Director of Finance Kyle Maurer presented examples of city financial accomplishments, including the separation of one-time development fees and expenses from ongoing revenue and expenses. 

“The city before has sometimes used one-time revenue money to pay for ongoing operating expenses. We ripped the band aid off this year,” Communications Manager Jon LaFollette said. The solvency of the city police budget was also mentioned. During the current fiscal year, $9 million is expected to be collected for the Herriman Police Department from property taxes. This is by far the largest source of revenue for the police, but not the only one. Other sources include funds paid by Jordan School District for resource officers, fees for providing security at sporting events and various state and federal funding sources. 

Other accomplishments discussed were realistic revenue expectations as affected by the end of COVID, long-term anticipation of revenue and expenses, the creation of capital improvement plans and a long-term mindset.  

City departments prepared budget requests in November and December to fund their day-to-day operations and any upcoming projects. “They did know going in that this would be a lean budget year,” Maurer said. 

Departments were asked to submit requests for only what was absolutely critical in order to maintain operations. City officials began the lengthy and laborious process of reviewing each departmental budget in January. Requests were reviewed a few at a time during city council work meetings. “The requests are reviewed internally and with the city council so they can prioritize funding in the right places,” the city reported.

A tentative budget was released to the public on May 1 (herriman.org/budgets), and the city council voted to approve it on May 8. 

“[This] is basically a ‘here’s what we’re planning on doing at this point, but we’re welcoming your feedback before it’s approved’ stage,” said the city. 

LaFollette clarified, “However, if there’s a property tax increase proposed, then the approval is shifted a few months later after a Truth-in-Taxation process. That said, I don’t think we’ll be proposing a tax increase this year.” 

A public hearing is set for June 12. Comments on the budget are welcome until then, and any alterations will be made before it is expected to be officially approved on June 12, taking effect July 1, which is the start of fiscal year 2025. 

Herriman receives revenue from 10 general sources: sales, franchise, property taxes, licenses or permits, development impact fees, intergovernmental revenue (fiscal aid from federal, state and other sources, such as from highway taxes, etc.), grants, service charges, tax incentive funds (which allow local governments to borrow money against future increased property tax revenue) and water fees. 

The entire city budget is comprised of nine broad funds: the General Fund, the Debt Service Fund, Herriman City Safety Enforcement Area, Herriman City Fire Service Area, impact fee funds, special revenue funds (money earmarked for specific purposes and in specific areas), enterprise funds (revenue from services that charge a fee such as the water fund) and the American Rescue Plan Act, also known as the COVID-19 Stimulus Package. Respectively, these funds provide money for city departments, debt repayment, law enforcement, fire and emergency medical services, capital improvement projects (which also draw funding from the general, impact fee and water-related funds), area-specific infrastructure and the water utility. 

“The General Fund is the primary operating fund for the city,” LaFollette said. “It’s the largest fund. Most departments get their funding from this source.”

As the city grows and the demand for services increases, services expand to meet these demands. Costs and revenues rise together. Additional revenue in the General Fund from sales tax, property tax, and other sources will be claimed by additional funding requests. Original requests totaled about $24.6 million, but city officials stipulated that each department needed to cut back on spending in order to maintain a balanced budget, meaning expenses would not exceed income. 

“The city council is very hesitant to raise fees or taxes or do anything that affects resident’s pocketbooks,” LaFollette said. “They’re very concerned with how much costs are going up in every aspect of our lives.” 

He also explained how it may seem the city is spending money on new budget items, but that’s not the case. To be more transparent and for the sake of clearer accounting, many budget items that were formerly combined within the General Fund will now be broken out separately. “This is happening in every department, so in many areas, it looks like we’re finding a lot of new things to spend money on, but we’re not.”

Revised budget requests in the General Fund amounted to $22.15 million, which would be slightly less than the expected income of $22.33 million. There is currently a projected deficit for fiscal year 2026, with $23.08 million in expenses against $22.87 million in revenue, but it is expected to be balanced by a slight surplus from fiscal year 2025. 

“This is obviously a concern that we’ve had, to reduce expenses wherever we can,” LaFollette said. “If we didn’t tighten our belts for fiscal year 2025, it would introduce a deficit. It’s not always realistic to budget to exactly $0 in surplus versus deficit, but over time, the budget remains balanced.” 

At least six city positions have been paused and are currently vacant. Last year, Herriman employed approximately 200 people, and for the upcoming fiscal year, the number will be roughly the same, including full-time employees, seasonal workers and around 50 crossing guards and other part-time employees. 

“Because the budget is so tight, we’re entering our second year of a hiring freeze even though several departments feel they need more employees,” LaFollette said. No budget amounts have been finalized, and all are approximate and subject to change. 

Within the General Fund, there were a few items of note. The Streets Department tendered the largest funding request. “The majority of their revenue comes from Class C road funds, which is from the state of Utah, but it isn’t intended to cover the department’s entire budget,” the city said. This money goes entirely to maintain streets. “[Streets are] a major council priority,” Maurer said.

Some departments have actually asked for less money while some have appealed for more due to various cost increases. The Communications Department has requested a refreshing decrease for the upcoming fiscal year, but its budget will climb back up for fiscal year 2026 to account for expected inflation. Expenditures for the city’s Legal Department include outside legal counsel and indigent defense while the Human Resources budgets for fiscal years 2025 and 2026 anticipate higher liability insurance costs. The costliest programs for city employees are employee appreciation and tuition reimbursement. Legislative operating costs include consultants/lobbyists, scholarships, and the Herriman City Youth Council. The Recorder’s Office asked for a decreased budget for 2025 but states a need for an increase again in 2026 for inflation and the upcoming 2026 city election. The Justice Court indicated a need for higher budgets in the next two years, citing, in part, higher credit card processing fees and an unforeseen increase in jury trials.

In fiscal year 2023, $3 million was used from the General Fund to meet budgetary needs in law enforcement. For fiscal year 2024, the General Fund subsidized the police with $311,000. Last year, three new police officers had been previously approved but were canceled. One was reapproved due to the property tax increase. 

“With raising the HCSEA property tax, the police department will no longer need subsidies from the General Fund,” LaFollette said. “Only the HCSEA property taxes and other police-related revenue will be used to fund the police department.”

A separate budget category from the General Fund, Herriman’s many capital improvement projects are financed through impact fees, the Water Fund and to some extent the General Fund and are proposed by the Capital Improvement Project Committee, which includes one member from each city department. The Finance Director serves as the chair. As of April 2024, 181 projects, most of which do not yet have funding assigned to them, were waiting to be realized, though not all were pressing. This number includes projects that the city believes it will eventually need in several years. The most important projects represent a total of $53 million for 2025 and $37 million for 2026. 

“One of the real challenges we’re going to face here is pushing some of these out. They're gonna have to take longer to get there. And… being realistic in what we’re doing,” Cherpeski said. Years ago, prior Herriman officials no longer with the city made commitments to fund almost $30 million worth of improvement projects in 2025 and over $7 million in 2026. “...the agreement was that they’d deal with it later…. We are living in later,” Cherpeski said. “It’s… daunting to look at this.” 

Upcoming obligatory projects include improvements to 13800 South, 6400 West and 11800 South. The city council and other officials have explored bonding, bargaining with developers or delaying until funding is available as possible solutions to fund necessary capital projects.  

“People can see that we have millions upon millions of dollars to run the city, but it costs millions upon millions of dollars to provide services and maintain things,” LaFollette said. “The city does everything it can to not waste public money. We’re cutting expenses absolutely everywhere we can while maintaining a quality service standard.” 

The above information is incomplete. The city budget is very complex and many numbers are still being finalized. For more info, visit herriman.org/budgets. To comment on the budget, email your city council member or make a public comment at a city council meeting by June 12. Direct any questions about the mechanics of the budget or how it works to the Finance Department at [email protected]. For city council emails or to determine who your city council member is, visit herriman.org/city-council, and click on District Maps. λ

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