Boundaries for a proposed city of Lake Point meet the financial requirements of state code for incorporation, a report says.
Zions Bank Public Finance officials presented the findings of their incorporation study for Lake Point at Tuesday night’s county commission meeting.
“The average annual amount of revenue for Lake Point does not exceed the average annual amount of costs by more than 5 percent,” said Tenille Tingey, a financial analyst with Zions Bank Public Finance. “Therefore, they meet the state requirements and incorporation is feasible.”
State law requires the feasibility study must include a five-year projection of revenue and costs for the new city, including projections for growth and inflation.
The expenses must assume the same level of government services the area currently receives, including water, sewer, law enforcement, fire protection, roads and public works, garbage collection, weeds, and government offices.
“I think Zions Bank did a good job,” said Jim Willes, one of the sponsors of the petition to incorporate Lake Point. “We worked closely with them on the study and they chose the worst case possible — the highest expenses and the lowest income — and it still worked.”
The study found that the proposed boundary would have a total taxable property value of $75 million.
If incorporated in 2015, Lake Point City would generate around $320,000 in income from sales tax, gas tax, property tax, business licenses, motor vehicle revenue, and fines and forfeitures, according to Zions Bank.
The city’s expenses for 2015 would be just below $500,000, Tingey said.
To makeup the difference, Lake Point City would have to levy a property tax with a rate of .002246 in 2015, according to the study.
The new property tax would be $247 for the owner of a $200,000 home in Lake Point.
However, the city property tax would replace the $94 paid for the county’s municipal services tax, making the net increase in property tax $153.
Willes thinks incorporation is worth the extra property tax.
“The extra money is worth having control of our destiny and where we want to go and what we want to do,” he said.
The original proposed boundaries for Lake Point City run from the Interstate 80 exit at Lake Point to approximately one-quarter mile south of the stop light at the intersection of SR-36 and SR-138. It extends from the Union Pacific railroad on the east side of SR-36 to the railroad right-of-way on the north side of I-80.
As a result of the study, the incorporation sponsors amended the boundaries to include land east of the railroad tracks so the second phase of the Saddleback development would be part of the city.
The boundary was set to ensure control of the development on both entrances, both north and south of the city, according to Tingey.
If incorporated, Lake Point City will have an estimated population of 1,166 in a 9.9 square-mile area, giving it a population of 100 more people than Wendover, Utah.
The incorporation of Lake Point may result in a loss of up to $579,916 in revenue for Tooele County in property tax, sales tax, gas tax, and licenses and permits.
The exact amount of the lost revenue will depend on how much contracting the new city does with the county for services, Tingey said.
“It will take a couple of years before Lake Point incorporates, if it does incorporate, which would give the county time to figure out how to deal with the impact of any revenue loss,” said Commissioner Shawn Milne.
To initiate the incorporation process, a group of at least five property owners must gather signatures from owners of at least 10 percent of the land and 7 percent of the total value of all the land in the proposed new city.
The Tooele County Commission received a petition for an incorporation feasibility study from Lake Point residents last May. The Tooele County Clerk certified that the petition met legal requirements.
The county commissioners, during their July 1 meeting, approved a contract with Zions Bank Public Finance to complete the Lake Point incorporation feasibility study.
The next step in the incorporation process is to hold two town hall meetings in Lake Point to review the feasibility study and get feedback from residents.
The dates for those meetings have not been set, but they will be published in the Transcript-Bulletin, according to Willes.
Following the two meetings, petitioners have one year to submit a petition to put incorporation on a ballot so residents of the proposed city can vote on incorporation.
The petition must have the signature of at least 10 percent of the total registered voters in the proposed new city, including 10 percent of the voters from 90 percent of the voting precincts.