Taxes-TRSSD

SunCrest Residents,

We need your help! Please take the time to attend the Draper City Council Traverse Ridge Special Services District (“TRSSD”) meeting to be held at 6:30 PM on Tuesday, June 17th. Additional TRSSD items may be discussed during the City Council meeting at 7:00. Both meetings are open to the public, and several SunCrest residents plan to attend. We will have a couple of spokespersons for SunCrestResidents.org and the OA Board, and we encourage residents to attend, even if they do not plan to offer comments, to show the City Council that we are watching TRSSD developments closely.

The agenda and related documents for the City Council meeting may be downloaded from the city website at www.draper.ut.us (click on Agendas and Minutes and then City Council, then select the materials for the meeting on June 17, 2008). The TRSSD budget, along with the 2007 actual revenue and expense figures, is found at www.draper.ut.us/vertical/Sites/%7B9B0E25D7-5E8F-45BF-AFAB-8658E160BEA4%7D/uploads/%7B4721D9B1-4C54-47FB-8FF5-1C1E44AFA2AC%7D.PDF.

The Reader’s Digest Version:

What is TRSSD?
TRSSD is a “special services district” that covers all of the SunCrest subdivision. It was created at the same time the SunCrest subdivision was created. Its purpose was to cover the difference in costs between “regular” Draper city services and “special” Draper city services provided to SunCrest because of its high elevation (i.e.: extra snowplowing). The TRSSD fund was created to pay for this difference in services and the property owners in SunCrest are charged a separate property tax assessment with their property tax bill. The TRSSD property tax is approximately 120% more than what you pay in Draper City property taxes. Since this is to pay for additional “special” services, you are also charged Draper City Property taxes to pay for “regular” Draper City services (police, road maintenance, etc.). The members of the TRSSD board are the members of Draper City Council. SunCrestResidents.org has also made a request to have a resident member added to the TRSSD board to speak for those of us who live in the District. This request will most likely be discussed by the City Council in the next couple of months.

Why should I attend?
Since this has a direct financial impact on every SunCrest resident, it is important that our elected officials know what we think about their budget proposals for TRSSD. Otherwise, they will make decisions based solely upon their own knowledge without our input.

What will be discussed?
The major agenda item is the 2008-2009 budget for the TRSSD (below are some of the numbers being proposed). One of the major items being considered is the purchase of a $390K snow auger similar to ones purchased by Park City that will allow quicker snow removal.

Everything You Ever Wanted to Know About TRSSD…and then some:

Snow and Taxes: TRSSD As reported in the media, Draper City is considering using some of the surplus that has built up in the TRSSD fund to purchase additional snow removal equipment for the TRSSD and build a covered salt dome in SunCrest. Based on the experience of the past winter, the city is also considering budget increases for the TRSSD fund to cover higher costs for road salt, fuel, and labor than originally estimated.

Many residents have voiced concern over the level of taxation for the TRSSD, questioned whether we are getting necessary and satisfactory services for that tax, and asked why tax rates have not been reduced, since the TRSSD fund has accrued a surplus of more than $764,000.

On Friday, June 13, DeLaina and Paul Tonks of SuncrestResidents.org, Barbara Blackmer of the SunCrest OA Board of Trustees, and Barbara’s husband, attorney Scott Blackmer, met with Danyce Steck, Draper City’s Finance Director to discuss the TRSSD and the current proposals, in preparation for the June 17 meetings. Here is a summary of our research on the TRSSD and the meeting with Ms. Steck:

Background. The TRSSD was created at the suggestion of the developer (Terrabrook) in connection with the city’s approval of the SunCrest development. The city’s concern was that a development on top of the mountain would be more costly to service than residential areas elsewhere within the city limits. The additional cost of pumping water up to SunCrest would be reflected in a higher water rate charged to SunCrest residents. But the city concluded that a high-elevation development would also impose unusually high costs in other areas – particularly for snow removal, street cleaning, street lighting and maintenance, and trash disposal. This was the rationale for creating a special service tax district, the TRSSD, which collects an additional percentage of assessed value on each taxable property within the TRSSD to pay for the additional cost of such services. The result is reportedly that SunCrest residents pay more than twice the level of property tax that is paid by homeowners with a similar home valuation in Salt Lake or Utah Counties, respectively.

Historical problems. Many of us have been frustrated in the past by a relative lack of transparency in the TRSSD and inconsistent methods used to establish the “excess” costs of servicing our development. The city has gone through seven finance directors in ten years. There have been proposals at times to use the TRSSD fund for expenses that seemed to have little to do with “high-altitude” costs, such as funding a traffic light at the intersection of Traverse Ridge Road and Suncrest Drive (this expense is now planned from the General Fund, as it should be). The large and growing surplus in the TRSSD fund suggested that tax rates might be too high, while at the same time some city officials insisted that the rates were not high enough.

Meanwhile, despite the efforts of the city’s Department of Public Works (DPW), we have found it hard to negotiate the streets in winter. City snow removal equipment broke down at SunCrest in the heavy snows last winter, and the city spent nearly twice as much as was budgeted for road salt to de-ice the roads and streets. In fact, salt is by far the largest single expense item for the TRSSD budget: $225,000 for 2008, and snow removal equipment is the largest capital expense associate with the TRSSD.

Better management. We have seen improvements in planning and reporting with the advent of a new city manager and a new finance director (who has years of experience with larger special services districts in Arizona). There is more transparency concerning the methodology for allocating costs to the TRSSD. The controlling concept is that the TRSSD should pay only for “costs in excess” of ordinary service costs in the city.

What the records show. Under the new finance director, DPW employees started recording their hours spent at SunCrest and traveling between SunCrest and the DPW yard on Minuteman Drive. They record their fuel expenses and the salt used within the TRSSD. (They often use a special “red salt” on Traverse Ridge Road and the streets in Suncrest, because this product is more effective in de-icing, although it is more costly than what is used elsewhere in Draper.) The city also measured the lane-miles in Draper (the length of roads and streets multiplied by the number of lanes in each) to compare how much street surface there is in Draper as a whole with how much there is within the TRSSD.

Here is what the records show for last winter (November 1 – April 15): The roads and streets within the TRSSD represent only 7% of the lane-miles in Draper, but DPW staff spent 20% of their time dealing with snow removal and other work in the TRSSD over the winter, and 80% of the cost of salt used by the city over the winter was for salt used in the TRSSD. Snow removal expenses cost Draper more than $14,000 per lane-mile in the TRSSD over the 5 ½ - month winter season, and only about $2300 per lane-mile in the rest of Draper. The difference is the principal “excess cost” that the TRSSD has to pay for.

Nov. 1, 2007-April 19, 2008 figures for snow removal:

Lane miles in the District: 32
Lane miles in rest of Draper: 408

Total Cost snow removal in the District: $436,003
Total Cost snow removal in rest of Draper: $583,801

Average cost per lane mile for snow removal in rest of Draper: $1,430.88
Average cost per lane mile in the District: $13,797.57
Cost to be assessed to TRSSD fund for snow removal: $12,366.68 per lane mile ($13,797.57 minus $1,430.88)

Total snow removal cost assessed to TRSSD 2007-2008:
$390,787 Excess cost per mile
$19,802 Special red salt (salt mixed with red sand for traction)
$9,056 Extra equipment repair costs in District
$53,250 10% administration fee for administering the District
Total: $472,904

Because of the excess funds in the TRSSD fund, Draper officials are proposing a one time purchase of special snow removal equipment to be used only in SunCrest. Additionally, since it takes time and money to drive down the hill to the salt dome to get salt to be used in the District, Draper officials are proposing that TRSSD funds be used to build a salt dome just off of SunCrest drive to house salt that will be used in the District.

In addition, two of the city’s snow plows were disabled by broken axles while trying to clear snow at SunCrest, and on one of them the cab broke off the truck, so there is a need to replace that equipment with snow removal equipment that will work better in deeper snow.

Note: This method has not been used in the past by Draper, which can be attributed to the turnover of city managers and financial directors, and also to some city staff and employees not understanding that TRSSD residents were also being charged Draper City property taxes in addition to TRSSD property taxes.

Snow solutions. Last winter was unusually harsh, but snow removal is consistently a bigger challenge in the TRSSD than it is in the rest of Draper. The city acknowledged that snow removal was not done to an adequate level of service last winter. Although Traverse Ridge Road was kept open almost continuously, lanes were covered most of the winter on almost every street in the TRSSD, so that the streets were narrow and icy. DPW did not come to plow sufficiently early and often to prevent compaction and ice build-up – hence the need to use so much salt to break down the ice, which is costly and “burns” the adjacent landscaping.

DPW thinks it has found a better solution for next winter and the long term. The proposal before the city council is to purchase a Canadian-made Larue self-propelled snowblower (similar to the “snow auger” that was used several times last winter, but more advanced). These “big red trucks” throw the snow further off the road, and the throw can be controlled for distance and direction. With all the attachments, the cost will be about $420,000, and the equipment is expected to last 10-20 years. This is the same equipment that Park City uses. In addition, the city would lease a front-end loader for the winter months to move snow out of the cul-de-sacs, corners, and other places where it built up in huge mounds this past winter. The object is to keep the streets much more clear than was the case last winter.

DPW says it can dramatically reduce man-hours and salt consumption by using this equipment, along with traditional plows, to clear the snow before snow and ice accumulates on the roads to the extent it did this winter. Also, placing a salt dome at SunCrest means quicker response and fewer trips up and down the mountain for supplies. Thus, DPW recommends a larger capital investment in equipment and the salt dome this year, to reduce operating costs in the future.

The money for the equipment purchases is slated to come from the surplus in the TRSSD fund; it would not require a tax increase.

Questions. There are several questions that should be raised with the city council:

1. Will the new snow removal equipment be used exclusively for the TRSSD? If not, the capital expense and related operating costs should be pro-rated so that the rest of the city bears an appropriate portion of the financial burden.

2. Are there alternatives to heavy salting that will be less costly and less damaging to our landscaping? (Is it possible, for example, to use fertilizer or CMA instead of salt, and by clearing the snow more quickly reduce the amount of de-icer that must be laid down?)

3. Exactly which neighborhoods and portions of Traverse Ridge Road are included in the TRSSD? It is hard to imagine that snow removal and maintenance at SunCrest are dramatically more expensive, for example, than at Montreaux, the Cove at Little Valley, and the higher elevations of South Mountain developments. Which of these neighborhoods share in the cost of the TRSSD or get the benefits of additional services?

4. How does Suncrest Drive factor into the budget and service plans, since it has not yet been accepted as a city street?

5. Currently the TRSSD board is comprised of the mayor and city council; it may have included a Terrabrook officer in the past. Can we get a SunCrest resident appointed to the board, to represent those who are being taxed for the TRSSD and served by the TRSSD?

6. The finance director is planning to issue a two-page “popular budget” for the city and the TRSSD (a summary of revenues, expenses, and reserves), and we encourage such efforts to make it easier for residents to see what the city is spending and planning. With more consistent financial methodology over time, we should be able to track the needs of the TRSSD to avoid over-taxing and unnecessary reserve levels in the future.

If you have other TRSSD-related ideas or questions but cannot attend the city meetings on the 17th, please contact DeLaina or Barbara or post your questions on the blog at www.suncrestresidents.blogspot.com