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Council hears RDA payback timeline and opts to schedule precautionary tax‑hearing notice under new state rule
Summary
City staff briefed the council on RDA (tax increment) payback timing and the practical effect of a new state requirement to notify the tax commission by June 1 if a jurisdiction plans a tax‑rate hearing; the council agreed to place a tentative tax hearing on the calendar and to weigh options on RDA fund balance usage.
PERRY, Utah — City staff told the council May 15 that the city—s tax‑increment (RDA) developer payback is on track to be repaid by fiscal year 2027, and that councilors should consider whether to transfer existing fund balance to retire that obligation early or hold the funds for other uses.
Staff estimated the outstanding developer debt at about $1.3 million and said transferring current fund balance could complete payback as early as FY26; after the debt is retired, the RDA tax increment would cease flowing back to the city and instead remain available within the RDA for redevelopment uses through the district—s life (through 2029 per staff comment).
Separately, staff explained a recent state statutory change (Utah Code citation discussed earlier in the meeting) that requires counties and fiscal entities to notify the state tax commission by June 1 if they plan to hold a tax‑rate increase hearing; staff said the certified tax rate will not be available by that date, so the requirement effectively asks jurisdictions to reserve a hearing date and location and to notify the county auditor/tax commission. Staff advised that the council can open a public hearing date as a placeholder and cancel it later if no tax increase is necessary; the council agreed to place a tentative tax hearing date on the calendar for the public hearing packet and to rely on the mayor and staff for final instructions.
Councilors discussed the tradeoffs of transferring the RDA fund balance to pay the developer early (which would accelerate repayment but reduce short‑term city general fund sales tax receipts previously augmented by the developer increment). Staff recommended retaining the fund balance unless the council is ready to lose increment receipts that would otherwise come in the next two or three years.
Ending: Council directed staff to include a tentative tax hearing date in the budget/public hearing schedule (the notice can be canceled if not needed) and asked staff to provide options on whether to transfer RDA fund balance for early payback or to leave the arrangement in place through FY27.
