South Salt Lake council creates transportation utility fund, exempts residential properties

South Salt Lake City Council on July 23 approved an ordinance creating a transportation utility and a companion ordinance setting the fee schedule, while adopting an explicit exemption for all residential properties, including multifamily buildings.

The measures enact chapter 12.3 of the South Salt Lake Municipal Code to establish a transportation utility enterprise fund and amend the consolidated fee schedule to add the new fee. City staff presented the ordinances as a dedicated funding mechanism to maintain, operate and improve city streets and related infrastructure.

Council debate focused on whether multifamily buildings should be assessed. Staff explained the fee structure is billed by building square footage and designed to capture higher-traffic users, and that the draft initially treated multifamily developments of 50 or more units differently. Council members raised concerns that landlords could pass charges to tenants and that many apartment buildings are older and financially constrained. Council members also discussed mixed-use projects, homeowner association (HOA) communities and short-term rentals during the debate.

City staff provided projections from a consultant: the transportation utility as drafted would produce roughly $6 million annually; excluding all residential units would reduce revenues by about $360,000 per year, and including only multifamily (the draft's 50+-unit category) would change the projection by on the order of $145,000 (estimates provided by staff during the meeting). Staff noted that the proposed billing model charges by total building square footage and bills property owners or HOAs, consistent with the city's existing stormwater billing practice.

After discussion, a motion to approve the ordinance enacting chapter 12.3 with the change that "residential" include all residential and therefore be exempted passed on roll call. The council then approved the companion ordinance amending the fee schedule to reflect a monthly rate of $0 per 1,000 square feet for residential (including multifamily). Councilmembers said the framework and the fee schedule could be revisited and amended later if desired.

Clarifying numeric details cited in the meeting: the consultant's table showed a sample residential multifamily rate at $2.79 per 1,000 square feet (for the 50+-unit line in the draft) and staff repeated that the full-fund projection underlying the recommended rates was about $6,000,000 per year. Staff said the 50+-unit multifamily category likely represents between 20 and 40 buildings in the city.

The council instructed staff to make the drafting change in the code before publication so the ordinance language would match the council's intent to exempt all residential properties.

Outcome and next steps: Both ordinances were approved on July 23 and staff will update the code text to reflect the council's direction and implement billing through the city's utility billing process. Staff said property owners and HOAs would receive notice through utility billing channels and that the city had included information in recent utility bills and other outreach about the upcoming discussion.

Why it matters: The transportation utility creates a dedicated revenue source for streets and related infrastructure. The council's decision to exempt all residential properties narrows the fee base and will reduce the fund's first-year revenues compared with the consultant's full proposal; councilmembers emphasized the choice reflects local policy priorities and the council's concern about impacts on tenants and small landlords.

What remains unresolved: Councilmembers asked staff to provide more precise counts of qualifying buildings (particularly the number of 100+-unit buildings, which was noted as small) and additional outreach to HOAs and property owners to explain billing mechanics.