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Tuesday, August 12, 2008
American Fork City Council Approves 17.14 Percent Property Tax Rate Increase

. . . But they'll call it 9.62 percent.

The American Fork City Council labored mightily tonight for about an hour and a half, and finally brought forth a 17.14 percent property tax rate increase. Those who voted for it will tout it as a 9.62 percent increase. I'll tell you briefly what the difference is, and then I'll tell you how it came about and who voted for and against which motions. Unlike most City Council proceedings, it was very interesting to watch.

If the Council passed no rate increase at all, the tax rate would not be the same as it was last year. It would be the "certified tax rate" calculated by the County, according to Utah law, which tends to be lower than the previous year's rate. (Here is a detailed explanation of certified tax rates.) So the most proper baseline for measuring increases is this year's certified tax rate. Still, it does make some sense to look at the previous year's rate too. This is how the City could say going into tonight's meeting that it was looking at an 8.27 percent increase over last year's rate, while I could insist that that would really be a 15.7 percent increase, based upon this year's certified tax rate. Both numbers are correct as stated.

As we work through this, bear these numbers in mind:

0.002071      this year's certified tax rate
0.002213      last year's certified tax rate
0.002396      working proposal after last week's Council work session

(Note that your property tax is calculated by multiplying the rate times 55 percent of assessed value for a primary residence, or 100 percent of assessed value for other properties.)

First Motion: 0.002213

Here's how things played out tonight. As soon as discussion on the item was opened, Councilmember Heidi Rodeback (MFCC) moved to adopt last year's rate, 0.002213, as this year's rate, a 6.8 percent increase over this year's certified rate.

The two items intended for funding after last week's work session were the widening of the Beehive Park road and $250,000 for street repairs. To accommodate the lower rate, MFCC proposed moving the Beehive Park road project to a bond issue to be put on the November ballot, and decreasing the street fund to about $200,000.

There was lengthy discussion, including MFCC insisting that three of her colleagues should come down the hill and talk to her neighbors about strained household budgets. Councilman Dale Gunther spoke of false economies, where one saves a little now but pays a lot more later. In the end, this first motion died because none of the others would second it.

The rate was too high for Councilman Storrs and too low for the others, we soon learned. Later in the evening, MFCC would repeat that this rate was the highest she would go, that she would vote against any higher number.

Second Motion: 0.002330

Councilman Gunther used some calculations based on an glaringly unscientific sample of about half a dozen residents' taxes to determine that he thought 0.002330 would be fair, because it would have those residents (whose assessed property values decreased) paying about the same number of dollars this year as last year. This would be a 12.5 percent increase over this year's certified rate, and a 5.29 percent increase over last year's rate. He also specified moving the Beehive Park project to a bond, as previously discussed, and using the $364,573 this increase would net for street repairs.

Councilman Shirl LeBaron seconded the motion, and I expected it to pass three-to-two, but in the end only he and Councilman Gunther voted for it. MFCC, Councilman Rick Storrs, and Councilmember Sherry Kramer voted nay.

Third Motion: 0.002497

Councilmember Kramer proposed the highest rate of the evening, 0.002497, enough to raise the roads numbers from the previous motions to $600,000. This would be a 20.57 percent increase over this year's certified rate. Her motion failed for lack of a second.

Fourth Motion: 0.002071

Councilman Storrs, who maintained from the beginning of discussions several weeks ago that he opposed any tax increase, moved to approve the certified rate for this year, 0.002071. MFCC seconded, and the motion failed three-to-two, with only Councilors Storrs and Rodeback voting yea.

Fifth Motion: Same as the First

MFCC repeated her original motion, but there were still no takers.

Sixth Motion: Same as the Second

Councilman Gunther repeated his original motion; this time there wasn't even a second.

Seventh Motion: 0.002426

Councilman LeBaron moved to approve 0.002426, a 17.14 percent increase, which would allow $500,000 for the roads. Councilors LeBaron, Kramer, and Gunther voted yea; Councilors Storrs and Rodeback voted nay, and the motion passed. It is a larger increase than the Council had contemplated last week, when, admittedly, Councilors LeBaron and Kramer were absent.

One might wonder if Councilors LeBaron and Kramer might have been swayed a bit, had they been present at the hearing last Tuesday. We'll never know. At least Councilman LeBaron reported having read the minutes carefully and talked to some of the people who spoke at the hearing.

So it's a 17.14 percent increase. Or it's 9.62 percent. Take your pick. The higher number is real; the lower one is politics, which isn't entirely unreal.


The same three voted for the annual budget, adjusted to fit the newly approved tax rate, and the same two voted against it. This is unsurprising; the two issues go together, though they were two separate agenda items.

Then there was some discussion and final approval of five bond issues to be proposed on the November ballot, of which more later. The total amount will be just shy of $20 million, if all the bonds pass, which seems unlikely. It -- whatever the voters approve, if anything -- will all come from property tax rate increases beyond what the Council approved tonight.

I'd say something trite like, Hold onto your wallet . . . but I wonder how much point there is to holding onto an increasingly empty container.

Instead, I will say this. The increase that emerged tonight was a little higher than I expected and considerably higher than I supported, but I was pleased by something about the process. I think the extensive discussion and the formal rejection of three lower numbers tonight -- and the arguments behind them -- serve a useful purpose. It should now be difficult for anyone on the Council who voted for the 17.14 percent increase to pat himself or herself on the back for keeping the tax increase so small. If the process had been easier tonight, if it had not including rejecting three lower numbers, there might have been a greater temptation to unwarranted self-congratulation.

David G. Fletcher comments (8/19/08):

Thanks for your excellent and insightful post on the tax increase in American Fork. I appreciate yours and Heidi's efforts to share information about what is happening as I have little time lately to learn through other venues.

I also appreciate your efforts to keep taxes under control. Although I am a public employee, I have always tried to keep government. expenses at a minimum and keep government operating as efficiently as possible.

It seems to me that is not happening in American Fork. I am concerned that the whole secondary irrigation thing was a bad mistake. At least, it seems that way to me. It also seems that we could use a little better planning in the city.

At least, I hope efforts like yours will help keep people honest.


David G. Fletcher
CTO, State of Utah (resident of American Fork)

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