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SALT LAKE CITY — Utah lawmakers are mulling a measure that could complicate ongoing incorporation drives in five Utah communities, perhaps even stall them, though one of its sticky provisions is the focus of continued debate.
SB252, sponsored by Sen. Dan McCay, R-Riverton, requires a larger estimated tax revenue surplus in proposed cities when calculating their tax needs, a key step in the incorporation process. As is, revenue estimates calculated using existing tax rates must exceed projected annual costs for a new city by more than 5% for an incorporation proposal to proceed. Under SB252, that threshold would rise to 10%, requiring double the surplus.
What's more, the measure is retroactive — though that provision is up for debate — and would apply to pending incorporation processes, at least as now written. Five locales in Utah are currently in the midst of considering or pursuing incorporation — the Ogden Valley in Weber County, Benson in Cache County, West Hills in Summit County, Riddermark in Iron County and Spring Lake in Utah County.
"The purpose of this bill is to make sure we have financially viable cities as they're (incorporated)," McCay said on the Senate floor Monday when the bill came up for consideration. Rising costs that cities face, he said, have "caused some difficulties with new cities that are being created."
During Monday's debate, Sens. John Johnson, R-North Ogden; Ann Millner, R-Ogden; and Dan Thatcher, R-West Valley City, expressed opposition to the retroactivity provision. It's also garnered sharp opposition from proponents pushing for incorporation in the Ogden Valley. In response, McCay said he'd be willing to change it and the measure passed 19-7 on second reading on the presumption it would be tweaked before senators consider it for the third and final reading.
"We did get a lot of feedback over the weekend about this bill and I'm currently working with stakeholders," McCay said.
When SB252 was heard last Wednesday by the Senate Revenue and Taxation Committee, McCay indicated that the larger revenue requirement for proposed cities stemmed from "rising costs." Broadly, the incorporation process as now outlined aims to make sure proposed cities have the financial wherewithal to operate without the need for property tax hikes.
Whatever the case, McCay's measure has drawn the attention of boosters promoting incorporation of the Ogden Valley area, suspicious of the intent behind the bill. The Ogden Valley proposal, as originally put forward, calls for incorporation of a 73.9-square-mile area sitting on the eastern side of the Wasatch Mountains that's home to nearly 7,400 people. It encompasses the Eden and Liberty areas and the Nordic Valley ski resort, though not the Snowbasin or Powder Mountain resorts.
"We have our suspicions. I think something is afoot here," said Nick Dahlkamp, an Ogden Valley resident helping promote incorporation. More specifically, he and others wonder if the measure is meant to stall any of the five incorporation proposals now in process, overriding the incorporation boosters' efforts. They've started outreach efforts to Utah lawmakers to protest SB252.
The Ogden Valley incorporation boosters want to turn the area into a city because such change, they maintain, would give locals more control over development of the area, now managed by the three Weber County commissioners. The proposed 10% surplus revenue threshold, though, could make the incorporation process difficult for the communities now going through the process as well as future communities, Dahlkamp fears.
The Utah Lieutenant Governor's Office oversees incorporation processes, and according to the study of the Ogden Valley proposal that the office commissioned, two incorporation scenarios would generate 6.7% and 9.4% revenue surpluses, below the threshold proposed in SB252. The third would generate a 10.1% revenue surplus, Dahlkamp said.
If the 10% threshold isn't met in the feasibility studies commissioned through the lieutenant governor's office, incorporation "may not proceed," reads SB252.
Some Ogden Valley residents have frequently sparred with Weber County commissioners over development in the area, an increasing draw to visitors and others given the three ski resorts, Pineview Reservoir and other recreational amenities. Some of the critics worry about unfettered development and view incorporation and creation of a new city government as a way to get a better handle on growth.
One of the most recent development controversies in the Ogden Valley centers on a 20-acre mixed-development proposal in the Eden area, Eden Crossing.
