The Millcreek City Council is considering the financial impact of leaving the Salt Lake Valley Law Enforcement Service Area (SLVLESA) while continuing to contract with the Unified Police Department (UPD) for police services.
We will be having a public hearing at 7PM on September 11th to present the results of a recent financial impact analysis that we had performed, and to receive comments regarding the method used to pay for police services (just the method–not police services themselves). The hearing will be held in the auditorium of the Salt Lake Christian Center, 4300 South 700 East. We look forward to seeing you on September 11th.
In the meantime, HERE ARE ANSWERS TO SOME FAQs:
What is SLVLESA?
SLVESA stands for Salt Lake Valley Law Enforcement Service Area. It is the taxing district that collects Millcreek residents’ property taxes to pay for police service.
Why is Millcreek a member of SLVLESA?
According to the Salt Lake County website, SLVLESA was created to allow cities and the unincorporated areas of the County to join together to fund regional police services.
Which cities are members of SLVLESA?
Currently only three cities are members of SLVLESA—Millcreek, Herriman and Riverton. Both Herriman and Riverton have announced their intention to leave SLVLESA at the end of 2017. Other cities contract with UPD, but they do so independently—not as members of SLVLESA. The five metro townships and the unincorporated county are members of SLVLESA.
Who makes up the SLVLESA Board of Directors?
Each member city and metro township have one member on the board. There are also three members from Salt Lake County that represent the unincorporated areas of the county.
Why is this issue being discussed when Millcreek residents were promised no change in their police service?
There will be no change in police service. This issue is to determine the mechanism of how that police service is paid for. The catalyst for this discussion was the decision of both Herriman and Riverton to leave SLVLESA. Having the two other member cities leave SLVLESA changes the situation for Millcreek and the City Council felt it warranted a feasibility study and careful analysis of what the ramifications will be for Millcreek.
What are the consequences of Herriman and Riverton leaving SLVLESA?
With the exit of Herriman and Riverton, Millcreek would be the only city that is a member of SLVLESA. As the only city, Millcreek would be subject to the other eight board members in making decisions for Millcreek police service, including whether to raise taxes and what level of service to provide. Each board member has one vote—meaning that communities with fewer than 1,000 residents would have an equal vote with Millcreek. As you can imagine, priorities and needs may be vastly different for a city of almost 60,000.
Additionally, Herriman and Riverton will receive their portion of the SLVLESA fund balance (the district is required by law to maintain a fund balance). That fund balance may never be larger than it is currently. If Millcreek decides to leave SLVLESA, it will also be entitled to its portion.
Millcreek makes up what percentage of SLVLESA?
When Herriman and Riverton leave, Millcreek will make up 40% of the population of SLVLESA and Millcreek’s property represents 54% of the taxable value in the district.
If Millcreek leaves SLVLESA, how will we pay for our police service?
There are two methods by which Millcreek could pay for police service. The City Council could form Millcreek’s own special service district which would levy and collect property taxes to pay for police service independent of the city budget (this is what Riverton and Herriman are doing). Or, the City could directly levy a property tax (this would be a tax equal to the tax formerly charged by SLVLESA) This property tax, along with other current city revenue, could be used to pay for police service as opposed to using just property tax, as is now the case.
Why now? What is the hurry for Millcreek to exit SLVLESA?
As stated above, the fund balance may at its largest and Millcreek will be eligible to receive more money from SLVLESA if we exit this year. Additionally, the timing coincides with Riverton and Herriman leaving, ensuring fair treatment. Once Herriman and Riverton are no longer on the SLVLESA Board of Directors, there is no guarantee that the remaining SLVLESA board members would vote to allow Millcreek’s exit on as-favorable terms.
What are the financial ramifications if Millcreek leaves SLVLESA?
Property taxes are collected once per year, at the end of November. Historically, SLVLESA has operated on borrowed funds to pay for services during the course of year before tax revenues are collected. This is what’s known as a “tax anticipation note.” SLVLESA has paid off each year’s tax anticipation note with that year’s tax collections. Then, SLVLESA has taken out a new tax anticipation note to pay for the upcoming year’s services.
Because of the way police services have historically been funded, Millcreek would have to continue that procedure for at least the foreseeable future. The cost to Millcreek of an annual tax anticipation note, including interest and the cost of issuance, would be approximately $142,000. Millcreek residents would pay 14 cents more per month per $100,000 of residential value (e.g., 62 cents for a house valued at $400,000). Millcreek residents already pay for tax anticipation financing through SLVLESA, so this increase may be offset by a reduction in the amount built into the SLVLESA budget.