Ivins council weighs truth-in-taxation notice, road-fund options as FY26 tentative budget shows $1.03 million shortfall

The Ivins City Council on May 1 discussed tentative budgets for the fiscal year ending 2026 and options to close a general-fund shortfall after staff presented an updated “version 2” budget.

Mayor opened the work meeting saying the council must choose between reducing spending to available revenue or initiating the state’s truth-in-taxation process to raise property-tax revenue. "We are confronted with a budget deficit that is significant and our only response to that by law is to either reduce the budget to match the projected revenue or to go through a truth in taxation process," the Mayor said.

Why it matters: the council faces a structural gap in operating revenue after one-time sources that bolstered recent years—American Rescue Plan Act funds, elevated interest earnings and earlier building-permit fees—are no longer available at the same level. How the council treats the shortfall will affect staffing, capital projects and the city’s reserves.

Kate, a city staff member who presented the budget updates, said version 2 of the tentative budget reduced the projected shortfall by removing a $241,000 allocation for a road-replacement fund (previously proposed in the general fund) and making modest revenue and expenditure adjustments. "At the end of the day, the difference between the revenues and the expenditures came in around $9,000" between the initial and updated drafts of individual accounts, Kate said, and removing the road allocation lowered the current deficit to about $1,031,000.

Kate also reported fund-specific changes: a sewer lift-station project was reduced by $300,000 from a $1.4 million projection to $1.1 million in the version-2 draft; the draft budget includes placeholder capital for a possible Fitness Way property purchase that staff estimated at roughly $1,000,000 and said could be covered by capital-project funds and parks impact fees if the council elects to proceed.

Dale Murphy, a city staff member who reviewed statutory steps, outlined the truth-in-taxation timeline and noticing requirements. Dale said the council must adopt a tentative budget and give notice to the county if it intends to consider a property-tax increase; the county would send property-tax notices (typically around July 22), and the city would hold a public hearing in August (often after a July notice meeting) before final adoption. "Once the council approves the tentative budget, then we have the public hearing," Dale said.

Council members offered three broad approaches: (1) pursue truth-in-taxation notice and likely a future property-tax increase to cover part of the shortfall, (2) hold the line and cut proposed staffing and equipment (for example, staff identified five proposed new positions and associated vehicles and equipment that staff estimated at roughly $750,000), or (3) create a dedicated transportation funding mechanism (a transportation utility fee or a separate enterprise fund) specifically for road replacement rather than funding it through the general fund.

Council member Mike Scott and several colleagues favored establishing a transportation utility fund (a fee billed through utility accounts) to protect road funds from being reallocated for other uses. Mike argued that a dedicated enterprise-style fee would create an account that "you can't touch for anything else no matter what," whereas general-fund revenue could be shifted in future councils. Staff said the version-2 budget currently shows a $250,000 placeholder for a road-replacement program.

Public-works staff and council members urged a consultant-led pavement-condition analysis before fixing an annual target. Chuck, a public-works staff member, estimated a simple consultant pavement study could cost $10,000–$15,000, while a more detailed condition-rating and long-term replacement analysis might run closer to $30,000–$40,000. Council members said such a study should include the city’s maintenance practices and the performance of newer surface products to estimate realistic replacement intervals and funding needs.

Council member Sharon (first name only in the record) and others said they favored moving forward with a truth-in-taxation notice and educating residents about service-level needs if the council pursues a tax increase. "I support pursuing the truth in taxation process," Sharon said, adding that the city has "not enough fat to cut anymore." Several council members said they wanted a targeted resident-education plan if taxes were to be raised.

Staff noted a separate possible revenue source under discussion at the state level: a proposed third-percent sales/use tax dedicated to fire and emergency medical services (EMS). Cade, a city staff member who modeled scenarios, said the additional third-percent sales/use tax—if enacted for the region—would reduce the city's general-fund deficit by about $500,000, but staff cautioned the council could not rely on that revenue for the current fiscal year's budget because state action and implementation would take time.

Kate presented a five-year forecast that showed only limited savings in the next several years even with a modest property-tax increase; staff projected a small carryover amount in FY26 and larger revenue contributions in FY29 if local commercial developments (for example, the Black Desert project) and new tourism-related sales-tax revenue arrive as projected. Staff emphasized the forecast depends on the timing and scale of development revenue and the council’s decisions on tax or fee measures.

No binding budget decision or tax increase was adopted at the meeting. Council members agreed to direct staff to assemble required information and to proceed with the administrative step of notifying the county of an intent to consider truth in taxation (the Mayor and several council members said they would follow the same preliminary notice process the city used last year). Dale confirmed the council must adopt a tentative budget by the council meeting before June 2 if the city intends to set formal public-notice dates required for truth-in-taxation.

The meeting closed without formal votes on budget changes; the only formal motion on the record was to adjourn. "I move we adjourn," said one council member; another seconded, and the Mayor called the vote.

What’s next: staff will refine revenue and expenditure numbers, obtain a pavement-condition study if the council directs it, and prepare required notices and public-hearing dates should the council choose to pursue a truth-in-taxation process before the June tentative-adoption deadline.