EPHRAIM—The Ephraim City Council will hold a public hearing tonight (Wednesday) at 6 p.m. on an approximately $6 million general fund budget for the next fiscal year.
Besides the general fund, the council will be addressing a budget for various utilities and special funds come to about $8.7 million, bringing the city’s total expected budget for all operations to about $14.8 million.
Those numbers are part of a draft budget and could change before the final budget is considered tomorrow, according to Steve Widmer, city finance director.
The new budget includes a 4 percent across-the-board increase in water rates. The rate hike affects the base rate and all tiers on the water usage schedule. It also includes a 50-cent-per-garbage container increase in the garbage rate.
But the unusual thing about tonight’s deliberation is that there will actually be three public hearings.
Besides the hearing on the new budget, the council will modify and approve a final budget for the current year. That’s standard practice. Budgets typically change over the course of a year. City councils are required to vote on modifications and approve a final budget as of year-end.
Widmer explained that Ephraim’s sales tax revenue for the current fiscal year came in about $30,000 higher than expected when the budget was drawn up. So the main change is adding that revenue into the budget and accounting for how the revenue was spent.
Finally, there is a hearing on four, somewhat complicated transfers from utility funds to the general fund, or from one utility fund to another.
Widmer explained that the city makes payments to the city’s own electric fund, water fund and sewer fund for the power, water and sewer services it uses in buildings, parks and in various other operations.
Likewise, the utilities themselves make payments to other utilities for services used.
About five years ago, Widmer said, the Utah Legislature decided requiring cities to pay for their own power, water, sewer services, etc. could put an unfair burden on the cities. So the Legislature passed a law allowing cities to transfer the payments back. That’s what Ephraim has been doing ever since, Widmer said.
However, a public hearing must be held on such transfers. The public hearing tonight will be on four inter-fund transfers totaling $141,236.
Unlike other cities in Sanpete County and around the state, Ephraim does not rely on utility payments to support general government, Widmer noted.
Numerous cities with their own power companies transfer hundreds of thousands of dollars per year from their power operations to their general funds.
In contrast, Ephraim is proposing to transfer just $33,104 from the electric utility to the general fund. That sum represents only what the general fund paid the power fund for electricity over the course of the fiscal year.
Widmer said he is working to phase out inter-fund transfers altogether. That would mean when the city makes payments out of the general fund to the power operation for electricity, or when the city pays the sewer operation for sewer services, those operations keep the money permanently.
In terms of the total budget, the proposed general fund budget for next year is down slightly 1.8 percent from the current budget.
The largest item in the general fund is the police department, which, based on the draft budget, is scheduled to receive and spend about $1.5 million. Police expenditures are up about $235,000 from last year.
In the draft budget document, the combined budgets of utilities and special funds are down 22 percent from last year. There are several reasons for the drop, Widmer said.
First, the city spent more than $1 million last year purchasing water rights. That was a one-time expense that the city won’t have this year.
Second, the housing authority has paused its operations until it can purchase more land for homes. The result is a drop of $600,000, representing money the housing authority spent in the current fiscal year that it won’t spend next year.
Finally, a fund for “equipment and capital building projects” is down about $650,000 from last year. Widmer said the drop reflects projects the city decided not to do. Consequently, the projects don’t need to be funded in the coming year’s budget.