Ivin’s leaders consider raising taxes, other options to address budget deficits

Ivin’s • Before Ivins City Council members can pass a final fiscal 2024 budget next month, they need to get the red out — a $382,000 deficit in the general fund.

One option Councilor Mike Scott is proposing is to increase Ivins’ wealth tax portion by 18.6%, which would increase the amount collected on a $500,000 home by $47 per year. If passed, it would be the first property tax hike since 2010.

“Until or until we have enough taxes from other sources (sales tax, room tax, etc.), we rely on property taxes to cover the impact of inflation…” Scott wrote in a blog post. “If we had more businesses generating sales and room taxes, we wouldn’t have to rely on property taxes as much.”

The problem is, according to a survey the city conducted in December, most residents of Ivins are strongly opposed to more hotels or tourist resorts being built, nor are they enthusiastic about further commercial development.

As a result, the amount of property taxes collected by the city has not kept pace with growth or inflation. But instead of raising the tax, the city has used property taxes from new construction to offset inflationary pressures on the budget. Scott argues that this is unsustainable.

The main reason for the deficit, Ivins leaders agree, is the sharp rise in public safety spending. Ivins and Santa Clara have an agreement that essentially merges the two cities’ police and fire departments. Ivins runs the police department, located at Old City Hall, and Santa Clara oversees the fire and emergency services from their Rachel Drive station.

Despite the purported savings from the merger, public safety costs have risen dramatically in recent years. According to Ivins finance director Cade Visser, the city’s cost of fire and emergency services for fiscal 2024 is $1.7 million, $500,000 more than the 2023 budget. The city’s law enforcement budget is increasing from 3 $.1 million to $3.3 million.

The Santa Clara-Ivins Police Department currently has 16 full-time officers. Visser said the planned $30,000 purchase of two vehicles and bodycams, as well as the hiring of an additional officer, account for much of the increase.

Fire and emergency costs are increasing due to Santa Clara-Ivins Fire and Rescue’s decision last year to transition from volunteers to a full-time employee. The number of full-time firefighters has risen from seven a year ago to 18. The department also has seven part-time staff and 11 volunteers, now called reserves.

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Another factor driving up costs is the decision — at the urging of Ivins leadership — that the department reopen the Ivins Fire Station on Center Street, which is now fully operational with two fire officers after being staffless in 2021 had stayed.

Ivins Mayor Chris Hart said the decision two years ago not to staff the station increased fire and emergency response times for Kayenta and other neighborhoods in the western part of the city, leaving them vulnerable and causing Insurance agencies denied coverage to some property owners.

While the additional full-time staff and the re-staffing of the Ivins station have increased costs, Lance Haynie, the department’s chief of staff, said the results justify the additional spending. In the past year, the department has responded to 24 building fires.

“And we only lost one,” Haynie said. “Every one of them… we were able to get to the scene of the fire and take care of it. While we were before – I hate to put it that way, but we were really good at bailing out foundations.”

Even with soaring public safety spending and the budget deficit, raising property taxes is an unsavory option for many. At a public hearing last Thursday, there was clearly little appetite for an increase in the tax.

Councilor Dennis Mehr said he understands Scott’s concern that the city has not collected property taxes for the past 12 years.

“I understand what you are saying, [but] With all due respect, I call that good government,” said Mehr. “So let’s continue good government and … turn over every leaf and stone to make sure we’re doing everything we can to not raise property taxes for our community.”

Fortunately, the city has options. One is to take $382,000 out of the $3 million Ivins has in its general fund reserves. But that option is also unpalatable to Scott, who said the total reserves would not even last four months should an economic crisis hit.

Hart agrees with this view, especially given inflation and the US Federal Reserve’s rate hikes.

“I’m one who’s really committed to doing whatever we have to do not to dive into this reserve account because I don’t think this is the right time for it,” the mayor said. “Too many things are in flux out there the economy which worries me a little.”

Another way to close the budget deficit is for the city to draw on the money — typically between $10 million and $15 million — it has in the state Treasury mutual fund, which many cities use as a vehicle for short-term investments .

Even if Ivins doesn’t pull any money out of the fund, he makes about $96,000 a month from interest — about $200,000 of which could be used to reduce the deficit to $182,000. Finally, if the city can survive the next two lean fiscal years, help is on the way.

Black Desert Resort, a mega-resort taking shape near Snow Canyon State Park, is expected to be budget-friendly when it opens in 2026. When construction is complete, it will include a 147-room hotel, a 19-hole golf course, 300 resort residences, three pools and an outdoor walk-in mall, among other amenities.

According to Black Rock officials, the resort is expected to generate $57 million in temporary room taxes and $33 million in sales taxes over the first 40 years of its existence. That money, city officials hope, should put Ivins on a more solid financial footing.

Whatever Ivins officials decide, local resident and avowed Conservative Mandy Reeves has some advice for them.

“Just keep your dirty hands off my wallet,” she said, laughing. “I pay too much tax anyway.”