Emigration Canyon faces budget shortfall; officials discuss energy and franchise taxes

Emigration Canyon officials reviewed the township’s finances at a workshop discussion focused on revenue, expenses and options to reduce a budget shortfall for the six months ending June 30, 2024.

Marla, a county staff member who presented the figures, showed a six-month report comparing 2024 to 2023 and 2022 and said Emigration Canyon collected roughly $325,000 in operating income in the short year and had about $651,000 in bond-related capital funding allocated to the township. She told trustees that direct public‑works charges for the period were nearly $1,100,000 and that total operating expenses before capital projects were roughly $1,200,000, leaving the township “in the hole by $563,000” before counting bond-related capital costs. After accounting for capital project interest and bond expenses, the short six‑month year produced a projected deficit of about $904,000.

Why it matters: the township’s regular operating revenue and one‑time bond receipts do not match the timing and scale of public‑works charges, and much of the MSD (Metropolitan Service District) expense allocation is based on formulas — not direct usage — that raise equity and sustainability questions for small jurisdictions.

Details of the finances and how they are allocated Marla said the report shows operating income items such as sales tax, Class B and C road fund allocations, permitting fees and interest; she noted some income lines were one‑time or timing‑sensitive (ARPA/COVID offsets and bond proceeds). She explained that certain MSD charges — for example, the “member administrative allowance” and some back‑office (finance, HR, IT) allocations — are made by population or preexisting formulas rather than by direct service usage.

For public works, Marla described a time‑tracking and equipment‑use billing system: crews and equipment hours are charged to jurisdictions based on where staff log time and where equipment is deployed. She said public‑works billing and equipment allocation produce the large operations figure for Emigration Canyon in the short year.

On restrictions and funding sources, Marla said, “Class b and c road funds, by law, has to be used only on the roads.” She also told the group that the subsidy currently covering shortfalls comes through unincorporated county revenue and that the county’s continued contribution depends on statute and legislative authority: "It means for the county to remove their funding, they either have to go to the legislature to have the legislature change that, or they're gonna have to rely upon upon the MSD board of trustees, which is comprised of a representative of each one of these entities to say, we'll give you the money back." She added that changing that arrangement would require action by the legislature and would be complicated because other service districts depend on similar funding structures.

Multi‑year context Marla reviewed full‑year figures for 2023 and 2022 to show year‑to‑year variability. Emigration Canyon’s full 2023 income was close to $1.2 million and expenses about $1.1 million; 2022 expenses were higher (about $1.4 million) mainly because of a road overlay project that year. Countywide unincorporated revenues that help subsidize smaller jurisdictions were described as sizeable: the presenter said unincorporated sales tax was about $5.7 million, Class B/C road funds about $3.0 million and permitting fees roughly $1.3 million (figures cited as 2023 values).

Tax options discussed Presenters and trustees discussed municipal energy tax (MET) and utility franchise tax options. Marla said Emigration Canyon has not implemented MET taxes and noted that other municipalities had done so. Staff explained the distinction between the two taxes: the municipal energy tax (MET) is assessed on end users; the franchise tax is paid by the utility or franchise holder and typically passed to consumers. The meeting included two implementation points from staff: the township previously held a public hearing and voted to approve the franchise tax on paper but did not vote to implement it, and staff said a separate agenda item and vote would be required to implement either tax.

Regarding how MET or franchise revenues would be handled, staff said the MET and franchise tax receipts would be collected and deposited into a dedicated Emigration Canyon account rather than being commingled into the MSD shared operating pool. That, staff said, is how other member municipalities have been treating those revenues — they manage and audit the MET/franchise funds themselves and use them for local projects and administration.

Risk, subsidies and next steps Robert Pinot, a participant in the meeting, summarized the concern bluntly: “The takeaway for me is that we are operating in a negative condition.” Trustees pressed staff on the stability of the subsidy from unincorporated county revenue and on the risk if the county were to change its contribution; staff said withdrawal by the county would likely require legislative action, and that notice (a year and a half to two years) would be expected if that were to occur.

Staff suggested several mitigations trustees could pursue: implementing MET or franchise taxes to raise local revenue; pursuing state legislation or grants to account for heavy nonresident use of township roads; and exploring tourism or other targeted revenue sources. Staff committed to provide trustees a memo and supporting materials (a spreadsheet view and the detailed backup) listing contacts, next steps and the specific ledger lines used in the presentation.

Administrative and technical notes Presenters also flagged allocation and equity issues in shared MSD services: some services (animal services, DA prosecution) are allocated by population and do not reflect case volume or call levels; justice‑court charges historically used population but the MSD now uses geo‑tagged ticket counts as a workaround; park charges are exact where the township has no parks and thus bears no park maintenance charge; code‑enforcement fines are allocated by violation counts.

Formal action at the workshop The workshop portion was formally closed by motion and second; the motion passed and the group recessed to continue the public meeting later the same evening.

What’s next Staff will email the spreadsheet shown during the workshop, and Marla (staff) will prepare a memo listing: the MET/franchise implementation steps, who to contact at the state and county for legislative or grant advocacy, and the specific backup for public‑works and MSD allocations. Trustees also asked staff to present a similar analysis when 2025 data are available.

Ending Trustees recessed the workshop after the presentation and discussion; staff expect to follow up with the detailed backup and a memo to help the township evaluate whether to implement MET or franchise taxes or pursue other revenue and legislative options.