The City is proposing this increase to address a current structural budget shortfall and ensure the City can continue providing the level of public safety, infrastructure maintenance, parks, recreation, and municipal services residents expect.

This increase is intended not only to resolve the City’s immediate financial challenges, but also to stabilize the City’s finances for the next several years while improved long-term financial planning practices are implemented.

The estimated increase for the average home in Cottonwood Heights (valued at $819,000) would be $20.92 per month, or $251.03 annually. The estimated increase to a business (valued at $1,000,000) would be $46.44 per month, or $557.28 annually.

The City is committed to providing clear examples so residents can understand how the proposed increase would affect them directly.

No.

The proposed increase represents a 42.87% increase only to the City’s portion of the overall property tax bill — not the total tax bill paid by property owners.

A property tax bill is made up of several taxing entities, which may include:

• The City
• The County
• School Districts
• Special Service Districts
• Water and Sewer Districts
• Other local taxing entities

The City’s portion is only one component of the total property tax bill.

Actual impacts will vary depending on property value and the distribution of taxes among taxing entities.

The County assessment later this summer will provide property value and estimated impacts to help residents better understand how the proposed increase may affect them personally.

Under Utah’s Truth in Taxation law, property tax increases are measured against the previous year’s certified tax rate revenue collected by the City.

Because the City has historically maintained a relatively low property tax rate, restoring sufficient operational revenue requires a larger percentage increase to the City’s portion of the tax structure. However, that percentage applies only to the City’s share — not the full tax bill residents receive.

The City’s last, and only, property tax increase was 13.4%, done in 2018. The amount approved by the City Council at that time only balanced the budget and there was an understanding by members of the Council that it would need to be done again in the coming years. Additional funding was available through unusual sales tax collections and the national recovery funds during the COVID pandemic that helped balance the budget longer than anticipated.

Several factors contributed to the City’s current financial position, including:

• Rising inflation and operational costs
• Increased costs for public safety, infrastructure, and employee retention
• No additional property tax increase since 2018 to compensate for inflation (please watch the videos linked on our website and provided by the Utah League of Cities and Towns, to understand how Truth in Taxation works and how your tax dollars are utilized)

From 2007 to 2025, Cottonwood Heights has had the lowest increase of cities in Salt Lake County. Over that same period, many other Salt Lake Valley cities saw increases ranging from 36% to 172%. Direct comparisons can be challenging, however, because many jurisdictions also saw increases for their separate public safety or service area tax assessments, costs that Cottonwood Heights currently funds through its General Fund rather than through such separate assessments.

When the Town Center Bond was approved, projections suggested that a tax increase would likely not be needed for approximately five years and that construction would begin in the next year. Those projections proved inaccurate due to several issues discovered as we’ve progressed through the process to develop the site.

The Town Center project is still in motion, albeit slow as we work through some of the challenges the City is facing with the property. The original proposal involved financial assumptions that were made based on the information available at the time. Since then, the City has encountered complications that significantly impacted those projections, including:

• Two long-term leases tied to the property that limit flexibility and affected anticipated revenues by materially slowing the planned redevelopment
• The need to acquire additional land not included in the original purchase assumptions (the Walgreens parcel)
• Increased project and development costs due to inflation and market conditions

These factors created financial pressures that ultimately affected the City’s overall budget.

At this time, selling Hillside Plaza would not allow the City to fully recover its investment. Because the property is tied to the City’s General Obligation (GO) Bond, a sale would require the City to immediately address the remaining bond obligations and related costs.

The City remains committed to advancing the Town Center project in a way that delivers lasting value to both the community and the City’s long-term financial health. While the projected benefits of the project remain strong, the timeline for realizing those benefits has shifted. Despite the challenges associated with the site, its long-term outlook remains promising and is expected to play an important role in helping stabilize the City’s budget in the future. Here is a simplified overview of the current financial picture (rounded estimates):

• Original property purchases, including the Walgreens parcel: approximately $18.6 million
• GO Bond 1^st issue for property acquisition and related negotiations: $20.3 million
• Remaining 1^st issue bond amount: $1.7 million
• Remaining authorized bond capacity not yet issued: $10 million

If the property were sold today, the City would still be responsible for paying off the outstanding bond balance and associated bond-related costs, including interest obligations required under the bond agreement. Because the bonds are not callable for another 9 years, we would need enough money in an escrow account to make the bond payments until that time, when they could be paid in full. This scenario, if the property sells for appraised value, would require the city to utilize approximately $6.1 million from the general fund, which we do not currently have.

The City recognizes the importance of rebuilding public trust through transparency, accountability, and responsible financial management.

The City’s goal is to avoid large, sudden increases like this in the future by adopting policies and procedures that will require regular analysis of the budget and restrict how reserve funds are utilized. We will be engaging in a process to establish a 5-year strategic plan over the next year that will set priorities and require identification of funding sources before any funds are allocated.

The proposed policy changes are intended to create stronger financial guardrails, improve oversight, and establish more sustainable budgeting practices. The City is committed to providing residents with regular financial updates and maintaining an open dialogue about future financial decisions.

The City is committed to implementing several policy and governance changes intended to strengthen long-term financial stability and improve public accountability.

These planned changes include:

Establishing a Standing Citizen Budget Committee

The City plans to create a permanent citizen budget committee composed of residents and community stakeholders who will regularly review City finances, budgeting practices, and long-term planning assumptions. This committee will provide additional transparency and public involvement in the budgeting process.

Limiting Ongoing Expenses to Ongoing Revenues

The City intends to adopt policies requiring ongoing operational expenses to be funded only by reliable, recurring revenue sources. This is intended to prevent one-time funds or temporary revenues from supporting permanent obligations.

Restricting Use of Reserve Funds

Reserve funds are intended to provide financial stability during emergencies, economic downturns, or for one-time capital expenses. The City plans to formalize policies limiting the use of reserves, so they are not relied upon for ongoing operational costs except in extraordinary circumstances.

Regular Compensation and Staffing Reviews

To maintain the high level of service residents have come to expect, the City must remain competitive in attracting and retaining qualified employees, particularly in public safety and essential services. The City plans to conduct regular reviews of employee compensation packages and staffing needs to ensure services remain effective, sustainable, and competitive with surrounding communities.

Improved Long-Term Financial Forecasting

The City will implement more conservative and comprehensive long-term financial forecasting practices to better anticipate future costs, economic changes, and capital needs.

Residents are encouraged to attend public hearings, participate in community discussions, and contact City officials with questions or concerns regarding the proposed tax increase and the City’s financial plans.

The official Truth in Taxation Hearing will be held on August 11, 2026, at 6:00 PM (or soon thereafter) in the Council Chambers at City Hall (2277 E. Bengal Blvd.) where public comments can be made for the record.

Additionally, there are regular business meetings of the City Council on the first and third Tuesdays of each month at 7:00 PM (or soon thereafter), where general public comments can be made.