Santaquin council approves FY 2526 budget amendment after public hearing on impact-fee use

The Santaquin City Council on June 30 approved Resolution 06092026, adopting Fiscal Year 2526 budget amendment No. 3 after a public hearing in which a resident raised legal questions about the use of pressurized irrigation (PI) impact fees.

During public comment, Dustin Holden questioned whether the amendment’s transfer of PI impact fees into the PI fund to pay debt service complied with Utah law, citing Utah Code 11-36A-602 and another citation he read as "11-36A-3051D." He asked whether the transferred debt was financing system improvements described in an adopted facilities plan or instead paying for existing operations, and whether the transfer covered only the growth share of debt or the entire payment. "Is this transfer and the associated debt payments only for the growth? Then we're fine. If it's funding existing operations, then I think we have a problem with the usage," Holden said.

Mayor and staff responded that impact fees must and do follow state law and that the city is audited regularly. Finance director Shannon Hoffman told the council the transfer was structured so that "the amount of the transfer covers debt service to 100% of the transfer, not 100% of the debt service." She said impact fees are restricted to growth-related projects and cannot be spent on operations, staff time or electricity, and that the city has been audited by external auditors and the state on these matters.

Hoffman outlined the amendment’s main revenue and transfer items: an unexpected increase in sales tax receipts (about $134,000 tied to a development agreement), some prior-year property tax receipts, higher-than-projected interest earnings and other one-time receipts. She said the amendment proposes directing revenues to several purposes, including $220,000 for capital vehicles (a snowplow replacement), $300,000 for capital roads to meet a developer agreement for the Santa Estates project, and a $660,000 transfer into the PI fund to help pay for the ULS pipeline project. Hoffman also identified smaller grant proceeds and fire-related reimbursements: about $9,300 for radios under a wildland fire grant and $10,000 for emergency shelter expenses.

Council members also discussed fire-department equipment and fleet needs. The council noted a $1.7 million ladder engine had arrived and been paid; other apparatus replacements are 36–38 months out, and three vehicles are more than 30 years old. Council members and staff cited recent emergency repairs (examples given included $9,000 and a >$20,000 repair) and NFPA guidance as reasons to phase replacement and maintain equipment budgets.

A motion to approve Resolution 06092026 passed on roll call: Travis, Lynn, Jeff and Art voted aye; Brian was absent but had emailed support after reviewing the amendment. The council then proceeded to related Community Development Renewal Agency business and later adjourned.

The council’s approval sends the amended spending and transfers into effect for Fiscal Year 2526. The city said it will continue to rely on standard audits and the statutory controls that govern impact-fee use.