UTAH LEAGUE OF CITIES & TOWNS BOARD OF DIRECTORS MEETING LOCATION: VIA ZOOM MONDAY, DECEMBER 14, 2020 @ 12:00 PM (TIMES ARE APPROXIMATE)
1. Welcome and Introductions – Council Member Mike Mendenhall, Immediate Past President 12:00 PM • Happy Holidays, ULCT Board! • Acknowledgement of the retirement of Annette Spendlove • Mayor Caldwell’s 50th birthday
2. Administrative Items – Council Member Mike Mendenhall, Immediate Past President 12:05 PM ACTIONS: Reading of Determination Regarding Conducting ULCT Public Meetings w/o Anchor Location, Review & Approval of Minutes, Call for conflict of interest disclosure HANDOUTS: Determination Regarding Conducting ULCT Public Meetings w/o Anchor Location DRAFT November 16, 2020 Minutes
3. Presentation of the FY 2020 Annual Audit – Eide Bailly LLP 12:10 PM ACTION: Review & Approval of Annual Audit HANDOUTS: Memo to ULCT Finance & Audit Committee 12/7/2020 FY 2020 Audited Financial Statements & Accompanying Letters
4. Love, Listen, Lead—Cameron Diehl, Executive Director 12:30 PM • Y2 Analytics follow up discussion and strategy • Update on task force deliberations • Racial Equity, Diversity, and Inclusion Compact
ACTION: Potential endorsement of compact HANDOUT: Racial Equity, Diversity, and Inclusion Compact
5. Advocacy, Engagement, & Outreach Update – Victoria Ashby, Dir. of Government Relations; Wayne Bradshaw, Dir. of Policy; Roger Tew, Senior Policy Analyst; & Cameron Diehl, Executive Director 12: 50 PM • Federal: CARES Act, 4th stimulus • Executive branch o Governor Herbert tribute at LPC o Transition team for Governor-elect Spencer Cox • Legislative logistics o No Local Officials Day and no in-person LPCs at capitol o New leadership and assignments; freshmen • Legislative topics o Priority tiers (action) (40 min) . Housing and land use policy fault lines . Update on fees (Auditor, housing, transportation utility fee litigation) . Update on metro townships . Air quality related compact and roadmap (transportation, land use, etc.)
ACTION: Ratify legislative priorities to date, general direction on fee legislation/litigation, position on metro township MET request, potential action about federal stimulus
HANDOUTS: ULCT Letter to Governor-Elect Cox’s Transition Team ULCT Input on State Agency Efficiency Legislative Committee Assignments 2021 ULCT Legislative Priority Tiers Memo on HB 374 Building Regulation Amendments Rep. Paul Ray State of the HBA Update LINK: Housing Affordability: What Are Best Practices & Why are They Important? (Kem C. Gardner Policy Institute) LINK: Utah Climate & Clean Air Compact LINK: The Utah Roadmap – Positive Solutions on Climate & Air Quality (Kem C. Gardner Policy Institute) *Strategic Goals: Advocacy Goal #1, Advocacy Goal #2 6. Executive Director’s report—Cameron Diehl, Executive Director 1:50 PM • Midyear preview • Communications update o Deseret News and Salt Lake Tribune Editorial Board o December Submissions to Utah Policy • Dues not received
ACTION: Midyear volunteer request, Utah Policy requests HANDOUTS: Executive Director’s Report for December 2020 LINK: Utahns trust city over state government in planning for growth, group says (Deseret News) LINK: Messages to new legislators from ULCT (UtahPolicy.com)
7. ULCT Board & Commission Reports & Appointments – Abby Bolic, Operations & Membership Coordinator 1:55 PM ACTION: Reappointment to Outdoor Recreation Commission HANDOUT: ULCT Boards & Commissions Memo *Strategic Goals: Membership Goal #1
8. Other Business
9. Adjourn 2:00 PM
Next Meeting: Wednesday, January 20, 2021 December 10, 2020
DETERMINATION OF THE UTAH LEAGUE OF CITIES AND TOWNS REGARDING PUBLIC MEETINGS WITHOUT AN ANCHOR LOCATION
Pursuant to Utah Code Section 59-2-407, the President of the Utah League of Cities and Towns hereby determines that conducting an electronic meeting with an anchor location presents a substantial risk to the health and safety of those who may be present at the anchor location. This determination is based on the November 8, 2020 declaration by the Governor of the State of Utah regarding the increase in COVID-19 cases and the need for caution in people meeting together.
The December 14, 2020 meeting of the Utah League of Cities and Towns Board of Directors will be held electronically and will not have a physical location. All attendees will connect remotely, and links for public participation are available on the Utah Public Notice Website (https://www.utah.gov/pmn/).
Mayor Mike Caldwell, Ogden President, Utah League of Cities and Towns UTAH LEAGUE OF CITIES & TOWNS BOARD OF DIRECTORS MEETING MINUTES LOCATION: VIA ZOOM MONDAY, NOVEMBER 16, 2020 @ 12:00 PM
IN ATTENDENCE:
EXECUTIVE BOARD EX OFFICIO MEMBERS Mayor Mike Caldwell, President, Ogden City Mayor Len Arave, North Salt Lake, ULCT Treasurer Mayor Dawn Ramsey, 1st Vice President, South Jordan Mayor Jeff Silvestrini, 2nd Vice President, Millcreek Council Member Mike Mendenhall, Immediate Past President, Spanish Fork Gary Hill, UCMA & Bountiful
ULCT STAFF BOARD OF DIRECTORS Cameron Diehl, Executive Director Council Member Jewel Allen, Grantsville Nick Jarvis, Chief Operating Officer Mayor Andy Beerman, Park City Victoria Ashby, Director of Government Relations Mayor J. Nicholson Castleton, Eureka Abby Bolic, Operations & Membership Coordinator Mayor Julie Fullmer, Vineyard Wayne Bradshaw, Director of Policy Mayor Michelle Kaufusi, Provo Karson Eilers, Legislative Research Analyst Council Member Tasha Lowery, Draper Katie Harley, Event & Strategic Partnership Coordinator Council Member Kari Malkovich, Woodland Hills John Park, Senior Training Consultant Council Member Tawnee McCay, Riverton Meg Ryan, Senior Land Use Manager Mayor Erin Mendenhall, Salt Lake City Roger Tew, Senior Policy Advisor Mayor Emily Niehaus, Moab Susan Wood, Director of Communication Council Member Michele Randall, St. George Spencer Cawley, Intern Council Member Clint Smith, Herriman Mayor Maile Wilson Edwards, Cedar City EXCUSED: Council Member Dustin White Annette Spendlove, UMCA & North Ogden Council Member Marcia White Mayor Jeff Young, Richmond
Welcome and Introductions – Mayor Mike Caldwell, ULCT President • LINK: Substance of matters proposed, discussed, or decided
Administrative Items – Mayor Mike Caldwell, ULCT President • LINK: Substance of matters proposed, discussed, or decided
MOTION: Mayor Jeff Silvestrini ApproveDRAFT President’s determination regarding conducting ULCT public meetings w/o anchor location SECOND: Council Member Clint Smith VOTE: Unanimous Approval
MOTION: Council Member Clint Smith Approve Draft Minutes from October 19, 2020 Meeting with correction SECOND: Council Member Jewel Allen VOTE: Unanimous Approval
Board of Directors Membership Update – Cameron Diehl, Executive Director • LINK: Substance of matters proposed, discussed, or decided
MOTION: Mayor Jeff Silvestrini Appoint Eureka Mayor J. Nicholson Castleton to ULCT Board of Directors SECOND: Council Member Dustin White VOTE: Unanimous Approval
ULCT Website Unveiling – Susan Wood, Director of Communications • LINK: Substance of matters proposed, discussed, or decided
Advocacy, Engagement, & Outreach Update – Victoria Ashby, Director of Government Relations; Wayne Bradshaw, Director of Policy; & Cameron Diehl, Executive Director
• 2021 Virtual Legislative Session, Local Officials Day, and January Board meeting • LINK: Substance of matters proposed, discussed, or decided
MOTION: Mayor Julie Fullmer Approve legislative priority tiers SECOND: Mayor Jeff Silvestrini VOTE: Unanimous Approval
MOTION: Council Member Clint Smith Reschedule January meeting from January 27th to January 20th SECOND: Council Member Michele Randall VOTE: Unanimous Approval
Love, Listen, Lead –Cameron Diehl, Executive Director; Council Member Mike Mendenhall; & Y2 Analytics • LINK: Substance of matters proposed, discussed, or decided
MOTION: Council Member Tasha Lowery Approve staff recommendation for CARES Act 3rd tranche distribution SECOND: Council Member Kari Malkovich VOTE: Unanimous Approval
Transition Team for Governor-Elect Spencer Cox –Cameron Diehl, Executive Director & Mayor Dawn Ramsey, ULCT 2nd VP • LINK: Substance of matters proposed, discussed, or decided MOTION: MayorDRAFT Dawn Ramsey Support for “kitchen cabinet” concept SECOND: Mayor Jeff Silvestrini VOTE: Unanimous Approval
MOTION: Mayor Dawn Ramsey General support for staff engagement plan with executive branch SECOND: Council Member Kari Malkovich VOTE: Unanimous Approval
Personnel & Accounting Policy Updates – Nick Jarvis, Chief Operating Officer & Brooke Smith, Murray City Purchasing Agent & Deputy City Recorder • Purchasing Policy • GRAMA resolution • Finance-Audit Committee • Other committee volunteers (Amicus, Utah Policy, etc.) • LINK: Substance of matters proposed, discussed, or decided
MOTION: Mayor Erin Mendenhall Adopt proposed GRAMA Resolution & ULCT Personnel & Accounting Policies SECOND: Mayor Emily Niehaus VOTE: Unanimous
Executive Director Report – Cameron Diehl, Executive Director • COVID-19 Update • CARES Act report • Election analysis, federal & local • Annual Convention and sponsors • Dec 7/Dec 14; future policy issues for board consideration • LINK: Substance of matters proposed, discussed, or decided
ULCT Board & Commission Reports & Appointments – Abby Bolic, Operations & Membership Coordinator • LINK: Substance of matters proposed, discussed, or decided
MOTION: Council Member Jewel Allen Appoint Kurt Mower to Joint Highway Committee SECOND: Mayor Maile Wilson Edwards VOTE: Unanimous Approval
Other Business
Adjourn • LINK: Substance of matters proposed, discussed, or decided
MOTION: Mayor Jeff Silvestrini Adjourn SECOND: Mayor Dawn Ramsey VOTE: UnanimousDRAFT Approval TO: ULCT Audit & Finance Committee FROM: Nick Jarvis, Chief Operating Officer DATE: December 7, 2020 SUBJECT: FY 2020 DRAFT Audited Financial Statements
Attached please find the draft ULCT FY 2020 audited financial statements from our auditors Eide Bailly. The final version will be presented to the ULCT Board of Directors next Monday, December 14, 2020.
Overview:
Despite the COVID-19 chaos of the final months of the fiscal year and the cancelation of a major event (Midyear), the League’s finances remain in good shape. We finished FY 2020 with an increase in net position of just under $11,000.
Findings:
The audit contains one finding of significant audit adjustments related to the timing of sponsorship revenue. ULCT invoices sponsors in January for sponsorship of that calendar year. Using the calendar year rather than our fiscal year (July-June) better aligns with most of our sponsors fiscal years and is less confusing for them. Historically we would recognize all the sponsor revenue we received in the calendar year in the fiscal year of the same number (i.e. billed in January 2019, recognized in FY 2019), and this method was fine with our auditors for the previous three years of audits.
However, the cancelation of our 2020 Midyear conference and late payment by a couple major sponsors highlighted the gap between when sponsors pay and when they receive their benefits. Therefore, the auditors made adjustments going back to FY 2019 so that the recognition of sponsor revenue would be better aligned with when they receive their benefits. Going forward we will:
1) Continue to invoice sponsors in January for sponsorship of the calendar year, 2) When payment is received, half will be recognized in the current year (associated with the Midyear Conference) and half will be recognized as unearned revenue for the next fiscal year (associated with the Annual Convention).
Management is not concerned with this finding. Had our auditors brought this concern to us in previous years, we would have made the change sooner. This makes no changes to our net position and we have we now have the controls in place to recognize this revenue appropriately. Financial Statements June 30, 2020 and 2019 Utah League of Cities and Towns
eidebailly.com Utah League of Cities and Towns Table of Contents June 30, 2020 and 2019
Independent Auditor’s Report ...... 1 Management's Discussion and Analysis ...... 5 Financial Statements Statements of Net Position ...... 9 Statements of Revenues, Expenses, and Changes in Net Position ...... 10 Statements of Cash Flows ...... 11 Notes to Financial Statements ...... 12 Required Supplementary Information Schedule of the Proportionate Share of the Net Pension Liability ...... 30 Schedule of Contributions ...... 31 Notes to Required Supplementary Information ...... 32 Supplementary Information Supplemental Schedule to Statement of Revenues, Expenses and Changes in Net Position – Compared with Budget ...... 34 Compliance and Internal Control Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 36 Independent Auditor’s Report on Compliance and Report on Internal Control over Compliance as Required by the State Compliance Audit Guide ...... 38 Schedule of Findings and Responses ...... 40 Independent Auditor’s Report
Board of Directors Utah League of Cities and Towns Salt Lake City, Utah
Report on the Financial Statements We have audited the accompanying statements of net position of the Utah League of Cities and Towns (the League) as of June 30, 2020 and 2019, and the related statements of revenues, expenses, and changes in net position and statements of cash flows for the years then ended, and the related notes to the financial statements, which collectively comprise the League’s basic financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Utah League of Cities and Towns as of June 30, 2020 and 2019, and the changes in its financial position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
What inspires you, inspires us. | eidebailly.com 1
5 Triad Center, Ste. 600 | Salt Lake City, UT 84180-1106 | T 801.532.2200 | F 801.532.7944 | EOE Correction of an Error As discussed in Note 8 to the financial statements, certain errors relating to sponsorship revenue as of and for the year ended June 30, 2019, were discovered during the current year. Accordingly, amounts reported for accounts receivable, unearned revenue, and revenues have been restated in the 2019 financial statements now presented, and an adjustment has been made to net position as of June 30, 2019, to correct the error. Our opinion is not modified with respect to that matter.
Other Matters
Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of the proportionate share of the net pension liability, the schedule of contributions, and the notes to required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the League’s financial statements. The supplemental schedule to statement of revenues and expenses and changes in net position – compared with budget of the League is presented for purposes of additional analysis and is not a required part of the financial statements.
The supplemental schedule to statement of revenues and expenses and changes in net position – compared with budget is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedule to statement of revenues and expenses and changes in net position – compared with budget is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2020, on our consideration of the League’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the League’s internal control over financial reporting and compliance.
Salt Lake City, Utah December 10, 2020
3 Management’s Discussion and Analysis June 30, 2020 and 2019 Utah League of Cities and Towns
eidebailly.com Utah League of Cities and Towns Management’s Discussion and Analysis June 30, 2020 and 2019
As Management of the Utah League of Cities & Towns (the League), an Interlocal Cooperative, we offer readers of the League's financial statements this narrative overview and analysis of the financial activities of the League for the fiscal years ended June 30, 2020 and 2019. We encourage readers to consider the information presented here in conjunction with the financial statements and accompanying notes to enhance their understanding of the League's financial activities.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the League's basic financial statements. The financial statements are designed to provide readers with a broad overview of the League's finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the League's assets, deferred outflows, liabilities, and deferred inflows, with the difference being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the League is improving or deteriorating.
The statement of revenues, expenses, and changes in net position presents information showing how the League's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
The statement of cash flows presents changes in cash and cash equivalents, resulting from operating, non•capital financing, capital and related financing, and investing activities. In other words, it provides information regarding where the cash came from and how it was used, and the change in cash balance during the reporting period.
The League maintains one type of proprietary fund, an enterprise fund. A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives.
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the financial statements.
In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary information concerning the League's budget and actual amounts.
FINANCIAL HIGHLIGHTS
The League's total assets at June 30, 2020, were $2,311,726 which is an increase of $185,564 from June 30, 2019, resulting primarily from an increase in the League's cash balances of $126,113. The League's total assets as of June 30, 2019, were $2,125,162 which is an increase of $407,160 from June 30, 2018, resulting primarily from an increase in the League's capital asset balance of $520,568.
The League ended the 2020 fiscal year with $988,757 in total liabilities, which is a decrease of $646,074 from the prior year, resulting primarily from a decrease in net pension liability of $841,183 offset by varying increases in unearned revenues. Net position increased by $10,845. The increase in net position is primarily due to an increase in membership dues revenue. 5 Utah League of Cities and Towns Management’s Discussion and Analysis June 30, 2020 and 2019
The League ended the 2019 fiscal year with $1,634,831 in total liabilities, which is an increase of $873,780 from the prior year, resulting primarily from an increase in net pension liability of $886,425. Net position increased by $123,835. The increase in net position is primarily due to an increase in sponsorships and membership dues revenue.
The following table describes the Utah League of Cities and Town’s net position as of June 30, 2020, 2019 and 2018:
As restated As restated 2020 2019 2018
Current and Other Assets $ 1,760,301 $ 1,548,731 $ 1,662,139 Capital Assets, Net 551,425 577,431 56,863
Total assets 2,311,726 2,126,162 1,719,002
Total Deferred Outflows of Resources 49,760 383,621 34,525
Current Liabilities 793,010 597,901 610,546 Long-Term Liablities 195,747 1,036,930 150,505
Total liabilities 988,757 1,634,831 761,051
Total Deferred Inflows of Resources 487,499 567 241,926
Net Position Net investment in capital assets 551,425 577,431 56,863 Unrestricted 333,805 296,954 693,687
Total net position $ 885,230 $ 874,385 $ 750,550
Revenues
Comparison of Fiscal Year 2020 to Fiscal Year 2019 Total operating revenues decreased by approximately 19.45% overall due to a decrease in the revenue received from contracts and grants, registration fees, and donations in the current year. Dues assessed by the League help to finance the organization's day-to-day operations and represent the majority of the League's revenue. The League's other significant revenue sources come from registration at conferences, grants and advertising, and the sale of publications, this decreased significantly due to the economic effects of Covid-19 and the cancellation of the April 2020 Midyear Conference. Dues revenue increased 6.63% in the current fiscal year. The dues are calculated using a formula based upon sales tax revenue, assessed valuation and population, the rates of which did not increase from fiscal year 2019 to fiscal year 2020.
6 Utah League of Cities and Towns Management’s Discussion and Analysis June 30, 2020 and 2019
Comparison of Fiscal Year 2019 to Fiscal Year 2018 Total operating revenues increased by approximately 7.73% overall due to an increase in membership dues by approximately $100,000 and an increase in sponsorships of approximately $120,000. Dues assessed by the League help to finance the organization's day‐to‐day operations and represent the majority of the League's revenue. The League's other significant revenue sources come from registration at conferences, grants and advertising, and the sale of publications. Dues revenue increased approximately 5.78% in the current fiscal year. The dues are calculated using a formula based upon sales tax revenue, assessed valuation and population, the rates of which did not increase from fiscal year 2018 to fiscal year 2019.
Expenses
Comparison of Fiscal Year 2020 to Fiscal Year 2019 Operating expenses decreased by approximately $500,597 (-16.35%). Significant factors contributing to the overall decrease include a decrease of $275,581 in pension expense and a decrease of $238,490 in special projects.
Comparison of Fiscal Year 2019 to Fiscal Year 2018 Operating expenses increased by $453,755 (17.4%). Significant factors contributing to the overall increase include an increase in pension expense of $242,539 and an increase in salaries and employee benefits totaling $302,299.
The elements of the increase in net position for the fiscal years ended June 30, 2020, 2019 and 2018, are as follows:
2020 2019 2018
Revenues Operating revenues $ 2,514,449 $ 3,121,677 $ 2,897,579 Nonoperating revenues 56,246 62,605 187,411
Total revenues 2,570,695 3,184,282 3,084,990
Expenses Payroll and related benefits 1,153,908 1,302,403 757,565 Other expenses 1,405,942 1,758,044 1,849,127
Total expenses 2,559,850 3,060,447 2,606,692
Change in Net Position 10,845 123,835 478,298
Net Position - Beginning of the Year 874,385 750,550 272,252
Net Position - End of the Year $ 885,230 $ 874,385 $ 750,550
7 Utah League of Cities and Towns Management’s Discussion and Analysis June 30, 2020 and 2019
Capital Assets
Capital assets were purchased for $9,203 and $534,631 in 2020 and 2019, respectively. Capital asset purchases of $23,981 were made during 2018. Current year depreciation for the fiscal year ended June 30, 2020, was $35,209, compared to $14,063 and $20,965 for fiscal years ended June 30, 2019 and 2018.
Requests for Information
This report is designed to provide a general overview of the League's finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Utah League of Cities and Towns, 50 South 600 East, Suite 150, Salt Lake City, UT 84102.
8 Utah League of Cities and Towns Statements of Net Position June 30, 2020 and 2019
As Restated 2020 2019
Assets
Current Assets Cash and cash equivalents $ 1,571,901 $ 1,445,788 Accounts receivable, net 187,500 102,943 Prepaid expenses 900 -
Total current assets 1,760,301 1,548,731
Capital assets, net 551,425 577,431
Total assets 2,311,726 2,126,162
Deferred Outflows of Resources Pensions 49,760 383,621
Liabilities
Current Liabilities Accounts payable 11,141 17,994 Accrued liabilities 106,695 93,519 Unearned revenues Membership dues 292,674 289,275 Sponsorships, advertising and exhibit space 322,500 197,113 Contracts and grants 60,000 -
Total current liabilities 793,010 597,901
Net pension liability 195,747 1,036,930
Total liabilites 988,757 1,634,831
Deferred Inflows of Resources Pensions 487,499 567
Net Position Net investment in capital assets 551,425 577,431 Unrestricted 333,805 296,954
Total net position $ 885,230 $ 874,385
See Notes to Financial Statements 9 Utah League of Cities and Towns Statements of Revenues, Expenses, and Changes in Net Position Years Ended June 30, 2020 and 2019
As Restated 2020 2019
Operating Revenues Membership dues $ 1,876,654 $ 1,759,889 Contracts and grants 20,654 300,000 Registration fees 280,863 488,619 Sponsorships, advertising and exhibit space 328,532 563,988 Publication sales 7,746 9,181 Total operating revenues 2,514,449 3,121,677 Operating Expenses Speaker fees and honorariums - 93,949 Convention supplies 65,717 6,362 Food and beverage 267,762 329,889 Entertainment 74,312 99,881 Facility rent and setup 69,060 191,682 Printing/copying 65,054 53,297 Employee benefits and payroll taxes 344,720 319,862 Salaries 788,798 686,570 Pension expense 20,390 295,971 Repairs and maintenance 45,217 25,182 Depreciation 35,209 14,063 Special equipment- rental 105,298 33,654 Special projects 58,205 296,695 Travel and lodging 45,421 51,713 Professional services 81,500 82,577 Computer consulting 26,580 21,792 Contract labor 263,361 254,094 Other expenses 203,246 203,214 Total operating expenses 2,559,850 3,060,447 Operating Income (Loss) (45,401) 61,230 Non-Operating Revenues Interest income 56,246 62,605 Total non-operating revenues 56,246 62,605 Change in Net Position 10,845 123,835 Net Position, Beginning of Year 874,385 750,550 Net Position, End of Year $ 885,230 $ 874,385
See Notes to Financial Statements 10 Utah League of Cities and Towns Statements of Cash Flows Years Ended June 30, 2020 and 2019
As Restated 2020 2019 Operating Activities Receipts from members $ 1,880,053 $ 1,717,787 Receipts from customers 657,971 952,571 Receipts from grants and contracts 80,654 259,570 Payments to suppliers (1,378,486) (1,668,423) Payments to employees (1,161,122) (935,772) Net Cash from Operating Activities 79,070 325,733 Investing Activities Interest received 56,246 62,605 Net Cash from Investing Activities 56,246 62,605 Capital and Related Financing Activities Purchases of capital assets (9,203) (534,631) Net Cash used by Capital and Related Financing Activities (9,203) (534,631) Net Change in Cash and Cash Equivalents 126,113 (146,293) Cash and Cash Equivalents, Beginning of Year 1,445,788 1,592,081 Cash and Cash Equivalents, End of Year $ 1,571,901 $ 1,445,788 Cash Flows from Operating Activities Operating income (loss) $ (45,401) $ 61,230 Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation 35,209 14,063 Net pension adjustment (20,390) 295,971 Changes in operating assets and liabilities Accounts receivable (84,557) (65,443) Prepaid expenses (900) 32,557 Accounts payable (6,853) (3,887) Accrued liabilities 13,176 70,661 Unearned revenues - membership dues 3,399 (42,102) Unearned revenues - contracts and grants 60,000 (40,430) Unearned revenues - sponsorships, advertising and exhibit space 125,387 3,113
Net Cash from Operating Activities $ 79,070 $ 325,733
See Notes to Financial Statements 11 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Note 1 - Reporting Entity and Summary of Significant Accounting Policies
The Utah League of Cities and Towns (the League) is a governmental agency created pursuant to the Utah Interlocal Cooperation Act and is exempt from income taxation. The League represents municipal government interests with a strong, unified voice at the state and federal levels and provides information, training and technical assistance to local officials on municipal issues in order to create a greater public awareness and understanding of municipal responsibilities, governance and administration. The League is not a component unit of another governmental entity and is governed by a board of directors selected from the elected officials of the cities and towns the League represents.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The League's operations are accounted for within a proprietary fund. The financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the League are member dues, registration fees, various donations, sponsorships and government contracts, and other charges to members and customers for goods and services rendered. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the League's policy to use restricted resources first, then unrestricted resources as they are needed.
Membership Dues
Membership dues are recognized as revenue in the applicable membership period, which coincides with the League's fiscal year. Membership dues received in advance are recorded as unearned revenue.
Sponsorships
Sponsorships are recognized as revenue in the applicable sponsorship period, which coincides with the calendar year. The unearned portion of sponsorships relating to the second half of the calendar year are recorded as unearned revenue. For the year ended June 30, 2020, all sponsorship revenues received for calendar year 2020 were deferred and recorded as unearned revenue due to the League’s spring convention being cancelled as a result of the COVID-19 pandemic.
12 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Capital Assets
Property and equipment acquisitions in excess of $2,000 are capitalized and recorded at cost. Depreciation is provided using the straight-line method based on the estimated useful lives of the assets over three to thirty years.
Unearned Revenues
Dues and other revenues collected in advance are deferred and recognized as revenue in the period earned.
Cash and Investments (Cash Equivalents)
For purposes of the statement of cash flows, the League considers all investments with an original maturity of three months or less to be cash equivalents. The Public Treasurer's Investment Fund is considered a cash equivalent since it is readily accessible by the League.
The League’s investments in the Public Treasurer's Investment Fund (an external investment pool) are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. See Note 2 for further discussion regarding the League’s policies regarding cash deposits and investments.
Accounts Receivable
Accounts receivable primarily consist of amounts due from sponsors and grants receivable. Management provides for probable uncollectible amounts through an allowance for doubtful accounts. Additions to the allowance for doubtful accounts are based on management’s judgment, considering historical write-offs, review of specific past-due accounts, collections and credit conditions. Balances which remain outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received on accounts receivable subsequent to being written off are considered a bad debt recovery. As of June 30, 2020 and 2019, the allowance for doubtful accounts totaled $0.
Vacation and Sick Leave
An employee may accumulate up to 240 hours of vacation, which can be carried forward each fiscal year. Under extenuating circumstances, employees may accumulate more than 240 hours of vacation. All accrued vacation leave is payable at the time of termination.
Once each year, employees may convert up to 32 hours of sick leave to cash at their current pay rate. However, the employee must retain a minimum of 240 hours of sick leave after conversion.
13 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Deferred Outflows of Resources and Deferred Inflows of Resources
In addition to assets, financial statements will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of Utah Retirement Systems Pension Plan (URS) and additions to/deductions from URS' s fiduciary net position have been determined on the same basis as they are reported by URS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
Subsequent Events
The League has evaluated subsequent events through December 10, 2020, the date which the financial statements were available to be issued.
Subsequent to year-end, the continuation of the outbreak of the novel coronavirus pandemic, or COVID-19, has significant increased risk and uncertainties in the global economy including the activities in which the League operates. The League is closely monitoring its operations, liquidity, and capital resources and is actively working to minimize the current and future impact off this unprecedented situation. As of the date of issuance of these financial statements, the full future impact to the District’s financial position is not known.
Note 2 - Cash and Investments (Cash Equivalents)
Cash Deposits – At June 30, 2020 and 2019, the carrying amount of the League’s bank cash balance was $1,647,430 and $1,736,000, respectively. No deposits are collateralized.
14 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Deposit Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. The League’s policy for managing custodial credit risk is to deposit funds in financial institutions whose deposits are insured by the federal government. At times, the League’s deposit balance may exceed federally insured limits. The State of Utah does not require collateral on deposits. As of June 30, 2020 and 2019, $1,545,269 and $1,207,984 of the League’s bank balance was uninsured and uncollateralized and therefore was exposed to some degree of custodial credit risk.
Investments – The League’s deposits and investment policy follows the requirements of the Utah Money Management Act (the Act) (Utah Code Annotated 1953, Chapter 7) in handling its depository and temporary investing transactions. This law requires the depositing of Leagues funds in a “qualified depository.” The Act defines a “qualified depository” as any financial institution whose deposits are insured by an agency of the federal government and which has been certified by the Commissioner of Financial Institutions as meeting the requirements of the Act and adhering to the rules of the Utah Money Management Council.
The Act defines the types of securities authorized as appropriate investments for the League’s funds and the conditions for making investment transactions. Investment transactions may be conducted only through qualified depositories, certified dealers, or directly with issuers of the investment securities. The Act authorizes the League to invest in the following types of instruments:
1. Negotiable or nonnegotiable deposits of qualified depositories and permitted negotiable depositories; 2. Repurchase and reverse repurchase agreements; 3. Commercial paper that is classified as “first tier” by two nationally recognized statistical rating organizations; 4. Bankers’ acceptances that are eligible for discount at a federal reserve bank and which have a remaining term of 180 days or less; 5. Obligations of the United States Treasury, including bills, notes and bonds; 6. Obligations, other than mortgage derivative products, issued by U.S. government sponsored enterprises (U.S. Agencies) such as the Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal National Mortgage Association (Fannie Mae); 7. Bonds, notes, and other evidence of indebtedness of political subdivisions of the State; 8. Fixed rate corporate obligations and variable rate securities rated “A” or higher, or the equivalent of “A” or higher, by two nationally recognized statistical rating organizations; 9. Shares or certificates in a money market mutual fund as defined in the Money Management Act; and 10. Utah State Public Treasurers’ Investment Fund.
The League has invested the majority of its temporarily idle funds with the Utah Public Treasurer’s Investment Fund (PTIF). The Utah State Treasurer’s Office operates the PTIF. The PTIF is available for investment of funds administered by any Utah public treasurer and is not registered with the SEC as an investment company. The PTIF is authorized and regulated by the Act. The Act established the Money Management Council which oversees the activities of the State Treasurer and the PTIF and details the types of authorized investments.
Deposits in the PTIF are not insured or otherwise guaranteed by the State of Utah, and participants share proportionally in any realized gains or losses on investments. Parties interested in learning what specific investments comprise the State Treasurer’s Fund may contact the Utah State Treasurer’s Office.
15 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
The PTIF operates and reports to participants on an amortized cost basis. The income, gains, and losses of the PTIF, net of administration fees, are allocated based upon the participant’s average daily balance. The fair value of the PTIF investment pool is approximately equal to the value of the pool shares.
Fair Value of Investments – The League measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows:
• Level 1: Quoted prices for identical investments in active markets, • Level 2: Observable inputs other than quoted market prices, and • Level 3: Unobservable inputs.
At June 30, 2020 and 2019, the League had $1,545,075 and $1,207,790 in the PTIF. These investments were valued by applying the June 30, 2020 fair value factor, as calculated by the Utah State Treasurer, to the League’s average daily balance in the PTIF. Such valuation is considered a Level 2 valuation for GASB Statement No. 72 purposes.
Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The League does not have a formal investment policy that limits investment maturities as a means of managing its exposure to increasing interest rates.
Section 51-7-11 of the Money Management Act requires that the remaining term to maturity of investments may not exceed the period of availability of the funds to be invested. The Act further limits the remaining term to maturity on all investments in commercial paper, bankers’ acceptances, fixed rate negotiable deposits, and fixed rate corporate obligations to 270 days – 15 months or less.
The Act further limits the remaining term to maturity on all investments in obligations of the United States Treasury; obligations issued by U.S. government sponsored enterprises; and bonds, notes, and other evidence of indebtedness of political subdivisions of the state to five years. In addition, variable rate negotiable deposits and variable rate securities may not have a remaining term to final maturity exceeding two years. The League’s investments in the PTIF can be withdrawn at any time.
Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The League’s policy for reducing its exposure to credit risk is to comply with the Act as previously discussed. As of June 30, 2020 and 2019, the League’s investments in the State of Utah’s PTIF were unrated.
Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The League’s policy for reducing the risk of loss is to comply with the rules of the Money Management Council. Rule 17 of the Money Management Council limits investments in a single issuer of commercial paper and corporate obligations to 5% to 10%, depending upon the total dollar amount held in the portfolio.
Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the League will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The League does not have a formal policy for custodial credit risk.
16 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Note 3 - Capital Assets
The following table summarize the changes in capital assets during the year ended June 30, 2020:
Balance Balance June 30, Transfers June 30, 2019 Additions or Deletions 2020
Capital assets being depreciated Buildings and improvements $ 876,040 $ - $ - $ 876,040 Furniture and equipment 199,073 9,203 - 208,276
Total capital assets being depreciated 1,075,113 9,203 - 1,084,316
Less accumulated depreciation Buildings and improvements (325,371) (30,278) - (355,649) Furniture and equipment (172,311) (4,931) - (177,242)
Total accumulated depreciation (497,682) (35,209) - (532,891)
Net capital assets being depreciated $ 577,431 $ (26,006) $ - $ 551,425
The following table summarize the changes in capital assets during the year ended June 30, 2019:
June 30, June 30, 2018 Additions Retirements 2019
Capital assets being depreciated Buildings and improvements $ 368,493 $ 507,547 $ - $ 876,040 Furnitureand equipment 171,989 27,084 - 199,073
Total capital assets being depreciated 540,482 534,631 - 1,075,113
Less accumulated depreciation Buildings and improvements (311,630) (13,741) - (325,371) Furniture and equipment (171,989) (322) - (172,311)
Total accumulated depreciation (483,619) (14,063) - (497,682)
Net capital assets being depreciated $ 56,863 $ 520,568 $ - $ 577,431
17 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Note 4 - Contingencies
The League is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the League carries commercial insurance. The League carries a Workers' Compensation policy for which the premiums are based on past experience.
Note 5 - Pension Plan
Defined Benefit Plans – General Information and Contributions
Plan description: Eligible plan participants are provided with pensions through the Utah Retirement Systems (URS). The URS are comprised of the following pension trust funds:
• Public Employees Contributory Retirement System (Contributory System); is a multiple employer, cost sharing, public employee retirement system. • Tier 2 Public Employees Contributory Retirement System (Tier 2 Public Employees System); is a multiple employer, cost sharing, public employee retirement system.
The Tier 2 Public Employees System became effective July 1, 2011. All eligible employees beginning on or after July 1, 2011, who have no previous service credit with any of the URS, are members of the Tier 2 Retirement System. The URS are established and governed by the respective sections of Title 49 of the Utah Code Annotated 1953, as amended. The URS’ defined benefit plans are amended statutorily by the State Legislature. The Utah State Retirement Office Act in Title 49 provides for the administration of the URS under the direction of the URS Board, whose members are appointed by the Governor. The URS are fiduciary funds defined as pension (and other employee benefit) trust funds. URS is a component unit of the State of Utah. Title 49 of the Utah Code grants the authority to establish and amend the benefit terms. URS issues a publicly available financial report that can be obtained by writing Utah Retirement Systems, 560 E. 200 S, Salt Lake City, Utah 84102 or visiting the website: www.urs.org.
18 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Benefits provided: URS provides retirement, disability, and death benefits. Retirement benefits are as follows:
Years of Service Required and/or Age Benefit Percent System Final Average Salary Eligible for Benefit Per Year Services COLA**
Contributory System Highest 5 years 30 years any age 1.25% per year Up to 4% 25 years any age* to June 1975; 20 years age 60* 2.00% per year 10 years age 62* July 1975 to present 4 years age 65
Tier 2 Public Employees System Highest 5 years 35 years any age 1.50% per year Up to 2.5% 20 years age 60* all years 10 years age 62* 4 years age 65 * with actuarial reductions ** All post-retirement cost of living adjustments are non-compounding and are based on the original benefit except for Judges, which is a compounding benefit. The cost-of-living adjustments are also limited to the actual Consumer Price Index (CPI) increase for the year, although unused CPI increases not met may be carried forward to subsequent years.
Contributions: As a condition of participation in the URS, employers and/or employees are required to contribute certain percentages of salary and wages as authorized by statute and specified by the URS Board. Contributions are actuarially determined as an amount that, when combined with employee contributions (where applicable) is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded actuarial accrued liability.
Contribution rates as of June 30, 2020 and 2019, were as follows:
Employer Employer Employee Contribution Rate for Paid Rates 401(k) Plan
June 30, 2020 Contributory System 11 Local Governmental Division Tier 1 6.00% 14.46% N/A 111 Local Governmental Division Tier 2 N/A 17.42% 1.03% Tier 2 DC Only 211 Local Government N/A 8.45% 10.00%
June 30, 2019 Contributory System 11 Local Governmental Division Tier 1 6.00% 14.46% N/A 111 Local Governmental Division Tier 2 N/A 17.30% 1.15% Tier 2 DC Only 211 Local Government N/A 8.45% 10.00%
Tier 2 rates include a statutory required contribution to finance the unfunded actuarial accrued liability of the Tier 1 plans.
19 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
For the fiscal years ended June 30, 2020 and 2019, the employer and employee contributions to the URS were as follows:
2020 2019 Employer Employee Employer Employee Contributions Contributions Contributions Contributions
Contributory System $ 43,699 $ 18,133 $ 32,280 $ 13,394 Tier 2 Public Employees System 13,542 - 10,839 - Tier 2 DC Only System 32,041 N/A 39,030 N/A
Total Contributions $ 89,282 $ 18,133 $ 82,149 $ 13,394
Contributions reported are the URS Board approved required contributions by the URS. Contributions in the Tier 2 Systems are used to finance the unfunded liabilities in the Tier 1 Systems.
Defined Benefit Plans – Pension Assets, Liabilities, Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources relating to Pension
At June 30, 2020 and 2019, the League reported net pension liabilities of $195,747 and $1,036,930 respectively, which are summarized as follows as of the measurement date December 31:
2019 2018 Change in Proportionate Net Pension Proportionate Net Pension Proportionate Share Liability Share Liability Share
Contributory System 2.9725343% $ 194,809 2.5505988% $ 1,035,040 0.4219355% Tier 2 Public Employees System 0.0041703% 938 0.0044143% 1,890 -0.0002440%
$ 195,747 $ 1,036,930
The net pension asset and liability was measured as of December 31, 2019 and 2018, and the total pension liability used to calculate the net pension asset and liability was determined by an actuarial valuation as of January 1, 2019 and 2018, and rolled forward using generally accepted actuarial procedures. The proportion of the net pension asset and liability is equal to the ratio of the League’s actual contributions to the Systems during the plan year over the total of all employer contributions to the Systems during the plan year.
20 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
For the years ended June 30, 2020 and 2019, the League recognized actuarial pension expense as follows:
Plan 2020 2019
Contributory system $ 63,253 $ 377,800 Tier 2 public employees system 5,266 *
Combined 68,519 377,800 *Tier 2 Public Employees System balances were insignificant for 2019
At June 30, 2020 and 2019, the League reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
2020 2019 Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Combined Resources Resources Resources Resources
Differences between expected and actual experience $ 262 $ 322 $ 13 $ 390 Changes in assumptions 399 27 473 34 Net difference between projected and actual earnings on pension plan investments - 487,021 340,778 - Changes in proportion and differences between contributions and proportionate share of contributions 714 129 651 143 Contributions subsequent to the measurement date 48,385 - 41,706 -
$ 49,760 $ 487,499 $ 383,621 $ 567
2020 2019 Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Contributory System Resources Resources Resources Resources
Differences between expected and actual experience $ - $ - $ 13 $ 390 Changes in assumptions - - 473 34 Net difference between projected and actual earnings on pension plan investments - 486,300 340,778 - Changes in proportion and differences between contributions and proportionate share of#NAME? contributions - - 651 143 Contributions subsequent to the measurement date 26,439 - 41,706 -
$ 26,439 $ 486,300 $ 383,621 $ 567
21 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
2020 2019 Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Tier 2 Public Employees System Resources Resources Resources* Resources*
Differences between expected and actual experience $ 262 $ 322 $ - $ - Changes in assumptions 399 27 - - Net difference between projected and actual earnings on pension plan investments - 721 - - Changes in proportion and differences between contributions and proportionate share of contributions 714 129 - - Contributions subsequent to the measurement date 21,946 - - -
$ 23,321 $ 1,199 $ - $ -
*Tier 2 Public Employees System balances were insignificant for 2019
The following reported as deferred outflows of resources related to pensions result from contributions made by the League prior to the fiscal year end, but subsequent to the measurement date of December 31, 2019 and 2018, respectively. These contributions will be recognized as a reduction of the net pension liability in the upcoming fiscal year.
Plan 2019 2018
Contributory system $ 26,439 $ 41,707 Tier 2 public employees system 21,946 *
Combined 48,385 41,707 *Tier 2 Public Employees System balances were insignificant for 2019
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Tier 2 Public Contributory Employees Years Ended December 31, System System Combined
2020 $ (172,119) $ (107) $ (172,226) 2021 (141,663) (93) (141,756) 2022 8,909 30 8,939 2023 (181,427) (201) (181,628) 2024 - 88 88 Thereafter - 459 459
22 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Actuarial Assumptions
The total pension liability in the December 31, 2019, measurement was determined using the following actuarial assumptions, applied to all periods included in the measurement:
• Inflation 2.50% • Salary increases 3.25 – 9.75%, average, including inflation • Investment rate of return 6.95%, net of pension plan investment expense, including inflation
The total pension liability in the December 31, 2018, measurement was determined using the following actuarial assumptions, applied to all periods included in the measurement:
• Inflation 2.50% • Salary increases 3.25 – 9.75%, average, including inflation • Investment rate of return 6.95%, net of pension plan investment expense, including inflation
Mortality rates were developed from actual experience and mortality tables, based on gender, occupation and age, as appropriate, with adjustments for future improvement in mortality based on Scale AA, a model developed by the Society of Actuaries.
The actuarial assumptions used in the January 1, 2019, valuation were based on the results of an actuarial experience study for the five-year period ended December 31, 2016, and the actuarial assumptions used in the January 1, 2018, valuation were based on the results of an actuarial experience study for the five-year period ended December 31, 2016.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class and is applied consistently to each defined benefit pension plan. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
23 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Expected Return Arithmetic Basis Long-Term Real Return Expected Target Asset Arithmetic Portfolio Real Asset Class Allocation Basis Rate of Return
Equity securities 40% 6.15% 2.46% Debt securities 20% 0.40% 0.08% Real assets 15% 5.75% 0.86% Private equity 9% 9.95% 0.89% Absolute return 16% 2.85% 0.46% Cash and cash equivalents 0% 0.00% 0.00%
Totals 100% 4.75% Inflation 2.50% Expected arithmetic nominal return 7.25%
The 6.95% assumed investment rate of return is comprised of an inflation rate of 2.50%, a real return of 4.45% that is net of investment expense.
Discount rate: The discount rate used to measure the total pension liability was 6.95% and 6.95%, respectively. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from all participating employers will be made at contractually required rates that are actuarially determined and certified by the URS Board.
Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees.
Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The discount rate does not use the Municipal Bond Index Rate. The discount stayed at 6.95% in the current year.
24 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Sensitivity of the proportionate share of the net pension asset and liability to changes in the discount rate: The following presents the proportionate share of the net pension liability calculated using the discount rate of 6.95%, as well as what the proportionate share of the net pension liability would be if it were calculated using a discount rate that is one-percentage-point lower (5.95%) or one-percentage-point higher (7.95%) than the current rate:
2020 1% Decrease Discount Rate 1% Increase (5.95%) (6.95%) (7.95%)
Contributory System $ 1,520,830 $ 194,809 $ (923,363) Tier 2 Public Employees System 8,088 938 (4,588)
Total $ 1,528,918 $ 195,747 $ (927,951)
2019 1% Decrease Discount Rate 1% Increase (5.95%) (6.95%) (7.95%)
Contributory System $ 2,197,221 $ 1,035,040 $ 56,725 Tier 2 Public Employees System 7,574 1,890 (2,496)
Total $ 2,204,795 $ 1,036,930 $ 54,229
Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued URS financial report.
Changes of Assumptions
No changes of assumptions in the actuarial assessment were noted in the current year.
Defined Contribution Savings Plans
The Defined Contribution Savings Plans are administered by the Utah Retirement Systems Board and are generally supplemental plans to the basic retirement benefits of the URS, but may also be used as a primary retirement plan. These plans are voluntary tax-advantage retirement savings programs authorized under sections 401(k), 457(b) and 408 of the Internal Revenue Code. Detailed information regarding plan provisions is available in the separately issued URS financial report.
Utah League Cities and Towns participates in the following Defined Contribution Savings Plans with Utah Retirement Systems.
25 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
Employee and employer contributions to the Utah Retirement Defined Contribution Savings Plans for fiscal year ended June 30 were as follows:
2020 2019 2018
401(k) Plan Employer contributions $ 61,290 $ 66,893 $ 46,315 Employee contributions $ 44,052 $ 50,009 $ 41,634
Roth IRA Plan Employer contributions N/A N/A N/A Employee contributions $ 5,109 $ 6,015 $ 6,326
Note 6 - Leases
The League leases unused office space in its building to other tenants on a month-to-month lease. Rental income for the years ended June 30, 2020 and 2019, was $0 and $7,500, respectively.
Note 7 - Employee Benefits
The League and its employees also participate in a separate defined contribution retirement plan (the Plan) pursuant to Internal Revenue Code 401(k). All employees who are 18 years of age or older are eligible to participate in the Plan. Participants are 100% vested in the employer’s contribution after three years of service. The Plan is funded by voluntary employee contributions, employer profit sharing contributions and discretionary matching employer contributions of 3.35% of the employee’s first 1.65% of which they contribute to the plan. For the years ended June 30, 2020 and 2019, the League contributed $61,290 and $31,148, respectively, to the Plan.
Note 8 - Correction of an Error
During 2020, the League identified misstatements within the 2019 financial statements relating to the recognition of the sponsorship revenue. As sponsorship contracts are on a calendar year basis and do not coincide with the fiscal year, accounting principles generally accepted in the United States require the League to recognize a deferral of revenue for amounts received before they were earned. The League restated its previously issued financial statements to appropriately reflect the June 30, 2019, deferred sponsorships, advertising and exhibit space revenue, accounts receivable, net and Net position for the year ended June 30, 2019.
26 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
The following is a summary of the effects of the restatement in the Company’s June 30, 2019, Statement of Net Position:
As Previously Reported Adjustment As Restated
Current Assets Accounts receivable, net $ 15,443 $ 87,500 $ 102,943 Total current assets 1,461,231 87,500 1,548,731 Total assets 2,038,662 87,500 2,126,162 Current Liabilities Unearned revenues Sponsorships, advertising and exhibit space - 197,113 197,113 Total current liabilities 400,788 197,113 597,901 Net position Unrestricted 406,567 (109,613) 296,954 Total net position 983,998 (109,613) 874,385
The following is a summary of the effects of the restatement in the Company’s June 30, 2019, Statement of Revenues, Expenses, and Changes in Net Position:
As Previously Reported Adjustment As Restated
Operating Revenues Sponsorships, advertising and exhibit space $ 517,101 $ 46,887 $ 563,988 Total Operating Revenues 3,074,790 46,887 3,121,677 Operating Income 14,343 46,887 61,230 Change in Net Position 76,948 46,887 123,835 Net Position, Beginning of Year 907,050 (156,500) 750,550 Net Position, End of Year 983,998 (109,613) 874,385
27 Utah League of Cities and Towns Notes to Financial Statements June 30, 2020 and 2019
The following is a summary of the effects of the restatement in the Company’s June 30, 2019, Statement of Cash flows:
As Previously Reported Adjustment As Restated
Operating Activities Receipts from customers $ 999,458 $ (46,887) $ 952,571 Payments to suppliers (1,715,310) 46,887 (1,668,423) Cash Flows from Operating Activities Operating income 14,343 46,887 61,230 Changes in operating assets and liabilities Accounts receivable (15,443) (50,000) (65,443) Unearned revenues - sponsorships, advertising and exhibit space - 3,113 3,113
28 Required Supplementary Information June 30, 2020 Utah League of Cities and Towns
eidebailly.com Utah League of Cities and Towns Schedule of the Proportionate Share of the Net Pension Liability Measurement Date of December 31, 2019 Last 10 Fiscal Years*
Proportionate Plan Share of the Net Fiduciary Net Pension Liability Position as a As of and for Proportion Proportionate as a a Percentage the Calendar of the Net Share of the Percentage of of the Total Year Ended Pension Net Pension Covered its Covered Pension December 31, Liability Liability Payroll Payroll Liability
Contributory 2014 0.8078009% $ 233,005 $ 362,189 64.30% 94.00% System 2015 1.0829946% 761,188 370,373 205.52% 85.70% 2016 2.0638026% 677,156 378,251 179.02% 92.90% 2017 1.8445904% 150,102 226,299 66.33% 98.20% 2018 2.5505988% 1,035,040 216,319 478.48% 91.20% 2019 2.9725343% 194,809 230,987 84.34% 98.60%
Tier 2 Public 2014 0.0000000% $ - $ - 0.00% 0.00% Employees 2015 0.0025496% (6) 16,500 -0.04% 100.20% Systems 2016 0.0073265% 817 60,083 1.36% 95.10% 2017 0.0045708% 403 44,667 0.90% 97.40% 2018 0.0044143% 1,890 51,326 3.68% 90.80% 2019 0.0041703% 938 58,006 1.62% 96.50%
* GASB Statement No. 68 requires 10 years of information be presented in this table. However, the schedule above is only for years ending in 2014 and after. The League will build the 10-year schedule prospectively.
30 Utah League of Cities and Towns Schedule of Contributions June 30, 2020 Last 10 Fiscal Years*
Contributions Contributions in as a Relation to the Percentage For the Actuarially Contractually Contribution of Covered Year Ended Determined Required Deficiency Covered Employee June 30, Contributions Contribution (Excess) Payroll Payroll**
Contributory 2014 $ 48,993 $ 48,993 $ - $ 368,921 13.28% System 2015 51,739 51,739 - 357,805 14.46% 2016 54,793 54,793 - 378,928 14.46% 2017 45,982 45,982 - 317,995 14.46% 2018 29,303 29,303 - 202,649 14.46% 2019 32,280 32,280 - 223,239 14.46% 2020 43,699 43,699 - 302,208 14.46%
Tier 2 Public 2014 $ - $ - $ - $ - 0.00% Employees 2015 - - - - 0.00% System*** 2016 8,307 8,307 - 49,833 16.67% 2017 7,460 7,460 - 44,750 16.67% 2018 7,873 7,873 - 46,667 16.87% 2019 10,839 10,839 - 62,653 17.30% 2020 13,542 13,542 - 77,739 17.42%
Tier 2 Public 2014 $ 8,882 $ 8,882 $ - $ 121,009 7.34% Employees 2015 11,224 11,224 - 132,356 8.48% DC Only*** 2016 12,028 12,028 - 142,345 8.45% 2017 14,008 14,008 - 165,775 8.45% 2018 24,822 24,822 - 293,750 8.45% 2019 39,030 39,030 - 461,892 8.45% 2020 32,041 32,041 - 379,184 845.00%
* GASB Statement No. 68 requires 10 years of information be presented in this table. However, the schedule above is only for fiscal years ending in 2014 and after. The League will build the 10-year schedule prospectively.
** Contributions as a percentage of covered-employee payroll may be different than the board-certified rate due to rounding or other administrative issues.
*** Contributions in Tier 2 include an amortization rate to help fund the unfunded liabilities in the Tier 1 systems. Tier 2 systems were created effective July 1, 2011.
31 Utah League of Cities and Towns Notes to Required Supplementary Information June 30, 2020
Changes of Assumptions
There were no changes in assumptions in the current year.
32 Supplementary Information June 30, 2020 Utah League of Cities and Towns
eidebailly.com Utah League of Cities and Towns Supplemental Schedule to the Statement of Revenues, Expenses and Changes in Net Position - Compared with Budget For the Year Ended June 30, 2020
Annual Variance with Budget Actual Budget
Operating Revenues Membership dues $ 1,816,000 $ 1,876,654 $ 60,654 Contracts and grants 15,000 20,654 5,654 Registration fees 460,000 280,863 (179,137) Donations, advertising and exhibit space 473,000 328,532 (144,468) Publication sales 15,000 7,746 (7,254) Reserves 80,000 - (80,000) Other income 5,000 - (5,000)
Total operating revenues 2,864,000 2,514,449 (349,551)
Operating Expenses Convention supplies 110,000 65,717 (44,283) Food and beverage 404,000 267,762 (136,238) Entertainment 110,000 74,312 (35,688) Facility rent and setup 213,000 69,060 (143,940) Printing/copying 70,000 65,054 (4,946) Employee benefits and payroll taxes 283,342 344,720 61,378 Salaries 753,500 788,798 35,298 Pension expense 51,158 20,390 (30,768) Repairs and maintenance 21,500 45,217 23,717 Depreciation - 35,209 35,209 Special equipment- rental 52,500 105,298 52,798 Special projects 112,000 58,205 (53,795) Travel and lodging 70,000 45,421 (24,579) Professional services 83,000 81,500 (1,500) Computer consulting 26,000 26,580 580 Contract labor 270,000 263,361 (6,639) Capital outlay 10,000 - (10,000) Other expenses 254,000 203,246 (50,754)
Total operating expenses 2,894,000 2,559,850 (334,150)
Operating Loss (30,000) (45,401) (15,401)
Non-Operating Revenue Interest income 30,000 56,246 26,246
Change in Net Position $ - $ 10,845 $ 10,845
34 Compliance and Internal Control June 30, 2020 Utah League of Cities and Towns
eidebailly.com 35 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Board of Directors Utah League of Cities and Towns Salt Lake City, Utah
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Utah League of Cities and Towns (the League) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the basic financial statements of the League, and have issued our report thereon dated December 10, 2020.
Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the League’s internal control over financial reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the basic financial statements of the League, but not for the purpose of expressing an opinion on the effectiveness of the League’s internal control. Accordingly, we do not express an opinion on the effectiveness of the League’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify a deficiency in internal control, described in the accompanying Schedule of findings and recommendations 2020-001 that we consider to be a material weakness.
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5 Triad Center, Ste. 600 | Salt Lake City, UT 84180-1106 | T 801.532.2200 | F 801.532.7944 | EOE Compliance and Other Matters As part of obtaining reasonable assurance about whether the basic financial statements of the League are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Response to Findings The League’s response to the finding identified in our audit is described in the accompanying schedule of findings and responses. The League’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control over compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Salt Lake City, Utah December 10, 2020
37 Independent Auditor’s Report on Compliance and Report on Internal Control over Compliance as Required by the State Compliance Audit Guide
Board of Directors Utah League of Cities and Towns Salt Lake City, Utah
Report on Compliance
We have audited the Utah League of Cities and Towns’ compliance with the applicable state compliance requirements described in the State Compliance Audit Guide, issued by the Office of the Utah State Auditor, for the year ended June 30, 2020.
State compliance requirements were tested for the year ended June 30, 2020, in the following areas:
Budgetary Compliance Fund Balance Open and Public Meetings Act Fraud Risk Assessment Cash Management
Management’s Responsibility
Management is responsible for compliance with the general state requirements referred to above.
Auditor’s Responsibility
Our responsibility is to express an opinion on Utah League of Cities and Town’s compliance based on our audit of the state compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the State Compliance Audit Guide. Those standards and the State Compliance Audit Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the state compliance requirements referred to above that could have a direct and material effect on a state compliance requirement occurred. An audit includes examining, on a test basis, evidence about the Utah League of Cities and Town’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each state compliance requirement referred to above. However, our audit does not provide a legal determination of the Utah League of Cities and Town’s compliance with those requirements.
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5 Triad Center, Ste. 600 | Salt Lake City, UT 84180-1106 | T 801.532.2200 | F 801.532.7944 | EOE Opinion on Compliance
In our opinion, the Utah League of Cities and Towns complied, in all material respects, with the state compliance requirements referred to above for the year ended June 30, 2020.
Report on Internal Control over Compliance
Management of the Utah League of Cities and Towns is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Utah League of Cities and Towns’ internal control over compliance with the compliance requirements that could have a direct and material effect on the Utah League of Cities and Towns to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance with state compliance requirements and to test and report on internal control over compliance in accordance with the State Compliance Audit Guide, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Utah League of Cities and Towns’ internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a state compliance requirement on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a state compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a state compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Purpose of Report
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control and compliance and the results of that testing based on the requirements of the State Compliance Audit Guide. Accordingly, this report is not suitable for any other purpose.
Salt Lake City, Utah December 10, 2020
39 Utah League of Cities and Towns Schedule of Findings and Responses June 30, 2020
Current Year Findings – Financial Statements
2020-001 Significant audit adjustments related to the timing of revenue recognized for both sponsorship and grant revenue.
Criteria: In accordance with accounting principles generally accepted in the United States of America, revenues that cash is received for services yet to be performed require that an unearned revenue amount be recorded for exchange transactions.
Condition: In review of the sponsorship revenue and grant revenue it was noted that certain material revenue amounts were recorded and recognized before services were performed. This created the need for a material adjustment to correct these amounts and record an unearned amount.
Cause: This is a relatively new model of billing sponsorship revenue and controls were not in place to account for these processes correctly, in addition due to COVID – 19 a significant amount of the services for the revenue were not allowed to be performed thus causing a more significant difference. There also appears to be a need for increased communication between management and the outsourced accountant.
Effect: Sponsorship revenue, accounts receivable, and unearned revenue were materially misstated.
Recommendations: We recommend that a schedule of annual sponsorships be created and maintained, and that a journal entry be made at the end of each year to account for the unearned portions reflected in the schedule. We also recommend that management review the schedule and ending balances after it is prepared.
Views of Responsible Officials: We agree with this finding.
Prior Year Findings – Financial Statements
There were no findings in the prior year financial statement audit.
Current Year Findings – State Compliance
There were no findings in the current year compliance audit.
Prior Year Findings – State Compliance
There were no findings in the prior year compliance audit.
40 December 10, 2020
To the Board of Directors Utah League of Cities and Towns Salt Lake City, Utah
We have audited the financial statements of Utah League of Cities and Towns (the League) as of and for the year ended June 30, 2020, and have issued our report thereon dated December 10, 2020. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our letter dated August 14, 2020, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of its respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the League solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
We have provided our comments regarding a significant control deficiency during our audit in our “Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards” dated December 10, 2020.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
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5 Triad Center, Ste. 600 | Salt Lake City, UT 84180-1106 | T 801.532.2200 | F 801.532.7944 | EOE Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.
Qualitative Aspects of the Entity’s Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by Utah League of Cities and Towns is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2020. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.
The most sensitive accounting estimate affecting the financial statements is the net pension liability, which is calculated by the Utah State Retirement Systems and includes various estimates and assumptions as utilized by the actuaries. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the League’s financial statements relate to the restatement of 2019 balances described in Note 8.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.
2 The following summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
To record fair value adjustment for Utah Public Treasurers Investment Fund Cash and cash equivalents 3,783 Interest income 3,783
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. For the year ended June 30, 2020, the following misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management:
• Sponsorship/Donation revenues were overstated by $77,888 • Unrestricted net assets were overstated by $109,612 • Accounts receivable was understated by $47,500 • Registration fees were overstated by $72,500 • Employee benefits were understated by $15,000 • Deferred revenue – Sponsorships were understated by $322,500 • Grants and special projects revenue was overstated by $60,000 • Deferred Revenue – Grants was understated by $60,000
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the Utah League of Cities and Towns’ financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management that are included in the management representation letter dated December 10, 2020.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with Utah League of Cities and Towns, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, business conditions affecting the entity, and business plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as Utah League of Cities and Towns’ auditors.
3 Modification of Auditor’s Report
We have made the following modification to our auditor’s report:
As discussed in Note 8 to the financial statements, certain errors relating to sponsorship revenue as of and for the year ended June 30, 2019, were discovered during the current year. Accordingly, amounts reported for accounts receivable, unearned revenue, and revenues have been restated in the 2019 financial statements now presented, and an adjustment has been made to net position as of June 30, 2019, to correct the error. Our opinion is not modified with respect to that matter.
This report is intended solely for the information and use of the management of Utah League of Cities and Towns, and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Salt Lake City, Utah
4
December 10, 2020
Eide Bailly, LLP 5 Triad Center, Suite 600 Salt Lake City, Utah 84180
This representation letter is provided in connection with your audit of the financial statements of the Utah League of Cities and Towns as of June 30, 2020 and 2019 and for the years then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the Utah League of Cities and Towns in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of December 10, 2020:
Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated August 19, 2020, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. • We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements. • We have reviewed, approved, and taken responsibility for the financial statements and related notes. • We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. • Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable. • Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
• All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. • The effects of uncorrected misstatements summarized in the attached schedule8 and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole. We understand the uncorrected misstatement is as follows:
To record fair value adjustment for Utah Public Treasurers Investment Fund
Cash and cash equivalents 3,783
Interest income 3,783
• The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. • All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed. • All funds and activities are properly classified. • All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments, GASB Statement No. 37, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. • All components of net position are properly classified and, if applicable, approved. • Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available is appropriately disclosed and net position is properly recognized under the policy. • All revenues within the statement of revenues, expenses and changes in net position have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal. • All expenses have been properly classified in or allocated to functions and programs in the statement of revenues, expenses and changes in net position, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported. • Special items and extraordinary items have been properly classified and reported. • Deposit and investment risks have been properly and fully disclosed. • Capital assets are properly capitalized, reported, and if applicable, depreciated. • All required supplementary information is measured and presented within the prescribed guidelines. • With regard to investments and other instruments reported at fair value:
• The underlying assumptions are reasonable and they appropriately reflect management’s intent and ability to carry out its stated courses of action. • The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. • The disclosures related to fair values are complete, adequate, and in accordance with U.S. GAAP. • There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. • With regard to pensions: • We believe that the actuarial assumptions and methods used to measure pension liabilities and costs for financial accounting purposes are appropriate in the circumstances. • We are unable to determine the possibility of a withdrawal liability from the Utah State Retirement System, of which we are a sponsor and are not currently contemplating withdrawing from the Utah State Retirement System. • Increases in benefits, elimination of benefits and all similar amendments have been disclosed in accordance with U.S. GAAP and are included in the most recent actuarial valuation, or disclosed as a subsequent event. • We agree with the findings of specialists in evaluating the pensions and have adequately considered the qualifications of the specialist in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists. • With respect to financial statement preparation, we have performed the following: • Made all management decisions and performed all management functions. • Assigned a competent individual to oversee the services; • Evaluated the adequacy of the services performed; • Evaluated and accepted responsibility for the result of the service performed; and • Established and maintained internal controls, including monitoring ongoing activities.
Information Provided
• We have provided you with: − Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters; − Additional information that you have requested from us for the purpose of the audit; and − Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. • All transactions have been recorded in the accounting records and are reflected in the financial statements. • We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
• We have provided to you our analysis of the entity’s ability to continue as a going concern, including significant conditions and events present, and if necessary, our analysis of management’s plans, and our ability to achieve those plans. • We have no knowledge of any fraud or suspected fraud that affects the entity and involves: − Management; − Employees who have significant roles in internal control; or − Others where the fraud could have a material effect on the financial statements. • We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, vendors, regulators, or others. • We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. • We have disclosed to you the identity of the entity’s related parties and all the related party relationships and transactions of which we are aware. • There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices. • Utah League of Cities and Towns has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities. • We have disclosed to you all guarantees, whether written or oral, under which Utah League of Cities and Towns is contingently liable. • We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB- 62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year. • We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. • There are no: − Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations. − Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62. − Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62 − Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12). • Utah League of Cities and Towns has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you. • We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
• With respect to the supplementary information accompanying the financial statements: − We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America. − We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. − The methods of measurement or presentation have not changed from those used in the prior period − We believe the following significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate. − When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor’s report thereon. − We acknowledge our responsibility to include the auditor’s report on the supplementary information in any document containing the supplementary information and that indicates the auditor reported on such supplementary information. − We acknowledge our responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor’s report thereon. • With respect to the required supplementary information accompanying the financial statements: − We acknowledge our responsibility for the presentation of the required supplementary information in accordance with U.S. GAAP. − We believe the required supplementary information, including its form and content, is measured and fairly presented in accordance with U.S. GAAP. − The methods of measurement or presentation have not changed from those used in the prior period. − We believe the following significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate. • We have provided to you our views on reported audit findings, conclusions, and recommendations, as well as planned corrective actions.
State Compliance
In relation to the compliance requirements found in the State Compliance Audit Guide:
• We are responsible for understanding and complying with the compliance requirements found in the State Compliance Audit Guide; • We are responsible for establishing and maintaining controls that provide reasonable assurance that the entity administers government programs in accordance with the compliance requirements; • We have identified and disclosed to you all of its government programs and related activities subject to the governmental audit requirement; • We have made available to you all contracts and grant agreements, including amendments, if any, and any other correspondence relevant to the programs and related activities subject to the compliance requirements; • We have no knowledge of any known noncompliance with the applicable compliance requirements; • We believe that the entity has complied with the applicable compliance requirements; • We have made available to you all documentation related to compliance with the applicable compliance requirements; • We have provided our interpretation of any applicable compliance requirements that are subject to varying interpretations; • We have disclosed to you any communications from grantors and pass-through entities concerning possible noncompliance with the applicable compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditor’s report, if any; • We have disclosed, as necessary, to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor’s report; • We have disclosed to you all known noncompliance with the applicable compliance requirements subsequent to the period covered by the auditor’s report, if any; • We are responsible for taking corrective action on audit findings of the compliance audit, as necessary.
Cameron Diehl, Executive Director
Nick Jarvis, Chief Operating Officer Utah CompactonRacial Equity, Diversity, andInclusion A Declaration of Five Principles and Actions to Create Equal Opportunity
NOVEMBER 18, 2020
e, the signers of the Utah Compact on Racial Equity, Diversity, and Inclusion, affirm that all people are created equal under God. A racially equitable state requires us to act and create a society in which race and ethnicity do not determine or Wlimit value, opportunity, and life outcomes. We also affirm two key principles on which everyone can agree: That all Utahns must have a truly equal opportunity to prosper, and that economic inclusion is essential to creating these opportunities. We view racism as more than just an individual character flaw. It is a system of ideas, beliefs, practices, structures, and policies that give some people greater opportunity to be fully human and live a happier and healthier life than others. Unraveling centuries of internalized and systemic racism requires bold anti-racist actions and policies right now. We pledge to advance behavior on an individual, business, and government level that will establish priorities and laws that create equal opportunity and access for all. We likewise pledge to foster cultures of inclusion in every aspect of our organizations and society while addressing social injustice and inequality, and condemning all forms of prejudice, bigotry, and discrimination. We believe many of our nation’s societal ills can be solved by providing equal opportunity and access to education, employment, housing, and healthcare. We further recognize that we must listen and learn from each other, realizing that as we deepen our understanding of differences, we can, in turn, be better understood.
Therefore, we commit to, and invite other Utahns to commit to, these anti-racist principles and actions:
1. Acknowledgement and action – We acknowledge that racism exists, and our actions make a difference. We call out racism wherever we see it and take purposeful steps to stop it. 2. Investment – We invest our time and resources to create greater opportunity for people of color. Eliminating racial and ethnic disparities requires our significant effort and investment. 3. Public policies and listening – We advance solutions to racial ills by listening and creating policies that provide equal opportunity and access to education, employment, housing, and healthcare. 4. Engagement – We engage to effect change. Broader engagement, equitable representation, and deeper connection across social, cultural, and racial lines will uphold the principle – “nothing about us, without us.” 5. Movement, not a moment – Utahns unite behind a common goal to create equal opportunity. We affirm our commitment will not just be a passing moment, but a legacy movement of social, racial and economic justice.
“We are all in!” GAIL MILLER Date: December 3, 2020
To: Governor-elect Spencer Cox and transition team
From: Cameron Diehl, Utah League of Cities and Towns (ULCT) Executive Director, on behalf of the ULCT Board of Directors ([email protected], 801-910-3912)
RE: ULCT partnership requests, principles, and priorities
Congratulations on your election as Governor of Utah! As the first mayor turned governor since J. Bracken Lee in 1948, your local government experience is an asset to the state and its cities as you execute your vision for Utah. On behalf of our Board of Directors, 21 mayors and council members from across Utah’s 248 municipalities, we offer the following recommendations, principles, and priorities to contribute to your administration’s success and build on our long- standing partnership. ULCT advocates according to the principles of respect, collaboration, and outcomes. We respect the role of the State of Utah and we urge the state to respect the role of local government. Let’s work together to provide the services and infrastructure that will contribute to the quality of life of our collective constituents.
We use a policy prism to identify whether to support or oppose legislation based on three key questions:
1) Does the bill respect the traditional role of local government? 2) Is the bill a one-size-fits-all approach or does it respect that every city is unique? 3) Will the bill result in an unfunded or unworkable mandate on cities?
We as city leaders are willing to use our political capital to support your policy objectives to benefit our state. At times, some legislators attempt to interfere with the traditional role of local government. We ask you to use your influence to defend our role and empower cities and towns as governing partners as we tackle the challenges ahead of us.
This letter outlines the following: I) our proposals on how to formalize our partnership through regular engagement; II) short-term and long-term policy priorities; and III) a summary of ULCT policy positions that our membership has adopted. On a related note, we are thrilled by the recent job announcements and duties of Mike Mower and Stephen Lisonbee and look forward to working with them as liaisons with local government statewide.
I) Formalize the partnership: regular engagement a. ULCT makes the following recommendations as feedback to you and your team and to provide you with opportunities to work directly with our members throughout the year. The ULCT Board of Directors endorsed these
recommendations and ULCT staff has discussed them with partners like the Utah Association of Counties (UAC) and Wasatch Front Regional Council (WFRC). ULCT is willing to manage the logistics to make these engagement recommendations successful. Thank you for your consideration. b. Regular leadership communication i. Local government “cabinet” of ULCT, Utah Association of Counties, Wasatch Front Regional Council, and Mountainland Association of Governments to have scheduled and regular meetings to proactively discuss urban issues with Mike Mower and when necessary, you and/or Lt. Governor Henderson. ii. Local government “cabinet” of ULCT, Utah Association of Counties, and Associations of Government around the state to have scheduled and regular meetings to proactively discuss rural issues with Mike Mower and Stephen Lisonbee, and when necessary, you and/or Lt. Governor Henderson. iii. ULCT officers and senior staff meet with Mike Mower and team each fall to discuss potential legislation and state budget. iv. Long-term: Explore the Colorado model (Department of Local Affairs, https://cdola.colorado.gov/) to improve the efficiency of state-local partnerships, resources, and statutory compliance. c. Access to and for ULCT membership i. Quarterly Q&A virtual town hall between you and ULCT members moderated by the ULCT Executive Director, similar to our COVID-19 town halls during the spring of 2020. ii. Standing invitation for you and/or Lt. Governor Henderson to either the ULCT Annual Convention (SLC, fall) or Midyear Conference (St. George, spring) each year. iii. Request for a senior member of the administration to speak to youth council members virtually in January 2021. 1. ULCT normally hosts 500+ youth council members at the capitol during the legislative session but we will not do so in 2021 due to COVID-19.
d. Partner with ULCT to publicly praise cities for accomplishments & plan for growth i. Help local government leaders communicate to the general public about the challenges and opportunities of Utah’s population growth. 1. Past example: Governor’s Business Friendly Award, which motivated dozens of cities to review their regulatory processes 2. Current example: Utah Rural Innovator Awards 3. Potential recognition: “Governor’s Quality of Life Award,” (i.e. smart planning, trail development, placemaking) a. Potential partners: Get Healthy Utah, WFRC, Utah Clean Air Partnership (UCAIR), private sector ii. Potential recognition: peace officers 1. Potential partners: Utah Chiefs of Police Association, Dept. of Public Safety, employee organizations
II) Policy priorities a. First 100 days: (briefing papers to come during the 2021 legislative session) i. We request your support of: 1. COVID-19 health and economic recovery. 2. Community-based and coordinated economic development in urban and rural areas. a. Ensure local government representation on the newly proposed economic development commission. We recommend representation from urban and rural cities and counties, appointed by ULCT, UAC, and Associations of Government (which serve as federally recognized economic development districts) to ensure coordination of economic development efforts (see Resolution 2019-001 below). 3. Investing in infrastructure (roads, transit, active transportation, recreation, water supply, water quality, broadband, electric vehicle charging station). a. Continue building on SB 136 (2018) and SB 34 (2019) which coordinates state and local transportation, economic development, and housing plans.
b. Technical assistance for local governments to update land use and transportation components of their general plans. c. Grants for local governments to convert fleets to cleaner vehicles. 4. Bridging the financial gap for affordable housing. 5. Fully funding the Justice Reinvestment Initiative. 6. Peace officers and first responders. 7. Open space preservation (LeRay McAllister Fund). 8. Implementing the Gardner Policy Institute recommendations to reform homelessness policy structure. ii. We request your opposition to bills that violate our principles and prism noted in section I above (specific details to come as bills emerge). b. Key priorities in the next four years i. Population growth 1. Implement the Wasatch Choice Vision and Utah’s Unified Transportation Plan (smart growth, in-fill and re-development, housing options, transportation choices, walkability, integration of transportation, housing, and access to economic and educational opportunities) 2. Preservation of key open space and investment in infrastructure ii. Sustainability of local revenue sources and potential improvements to the mechanics of those revenue sources iii. Community-based economic development in urban and rural areas iv. Include local government in the road usage charge program to fund transportation v. Fund homelessness service restructuring, mental health treatment, and Justice Reinvestment Initiative vi. Community trust in public safety vii. Water issues: water supply development, water conservation measures in partnership with local government and agricultural community viii. Gateway communities’ specific concerns: mitigate the impacts of tourism (infrastructure, public safety, workforce housing)
III) Executive Summary of ULCT policy resolutions and principles
a. Every Annual Convention, the ULCT membership endorses policy resolutions that form the policy foundation for our advocacy. I have provided key provisions from our most critical resolutions below (in alphabetical order) to give you a snapshot of ULCT policy priorities. b. I have also included a separate memo that I sent to Cedar Hills Mayor Jenney Rees in her role on the transition team about how state agencies can improve their relationship with local governments.
ULCT POLICY RESOLUTIONS ADOPTED BY THE MEMBERSHIP AT OUR ANNUAL CONVENTIONS
Table of contents:
I) Air Quality II) Economic Development III) Fireworks IV) Population Growth (housing, land use, etc.) V) Public Safety VI) Tax VII) Transportation
I) Air quality i. Resolution 2019-002
1. Utah cities and towns support local government’s ability to consider local action to address air quality, including but not limited to: a. Enacting idle-free ordinances; b. Installing electric vehicle charging networks; c. Encouraging energy efficiency in homes and businesses; d. Encouraging and purchasing renewable energy sources where appropriate e. Considering non-combustion options for fleet vehicles and other city equipment; f. Transportation planning and technology that increases access and connectivity without primarily relying on single-occupancy vehicles; g. Planning our neighborhoods and communities to facilitate use of transit and active transportation options; h. Exploring city functions that might be performed by employees via teleworking; and i. Upgrading city buildings and facilities to comport with higher energy efficiency standards.
2. Utah cities and towns support enhanced federal and statewide action to address air quality, including but not limited to: a. Increased support for fiscally responsible, clean, renewable, and carbon- free energy; b. State funding for public transit; c. Creation of a statewide electric vehicle charging network; d. Adoption of more energy-efficient building code standards; e. Adoption of transparency requirements for building energy efficiency; f. Investigation of how maintaining a minimum level of the Great Salt Lake might mitigate potential of harmful dust; g. Stricter vehicle emissions testing; and h. Support for federal enactment of clean car standards.
II) Economic Development i. Community-first resolution (2019-001)
1) Utah should promote a community-first model of economic development, which prioritizes sustainability and quality of life for all residents, old and new. 2) Collaboration in economic development should be encouraged and supported reciprocally in all levels of government, recognizing that economic development is most effectively and efficiently implemented locally. 3) Any comprehensive review of current tools and programs will only be successful with the involvement of cities and towns and must prioritize community-first economic development. Those tools and programs include, but are not limited to, the following: a. Agricultural grants; b. Business expansion & retention programs; c. Business recruitment and marketing efforts; d. Employment center development (business parks, office buildings, retail developments); e. Entrepreneurship and innovation assets (creative capital, incubators, research parks, technology transfer, maker spaces, coworking facilities, industry-academic research partnerships); f. Housing development, which includes achieving the appropriate balance of housing types, including workforce housing, and other uses of land and infrastructure; g. Industrial rehabilitation and environmental reclamation; h. Local Economic Development Tax Increment Financing Tool(EDTIF)applications;
i. Main street and downtown revitalization programs such as the National Main Street Program; j. Place-making, which includes arts & culture programming; k. Professional development education for local staff and elected officials that covers core concepts including many of the programs listed above; and l. Public infrastructure; m. Small business development support, including access to capital and mentoring/training program; n. The formation and capacity building of Redevelopment Areas (RDAs)/Community Reinvestment Areas (CRAs); o. Tourism development; p. Transportation strategies, including roads, transit, trail, rail, freight, and airports. ii. Economic Development, Taxes, and Land Use Resolution, 2017-001A
1. Cities and towns within the State of Utah commit that they are willing and ready to collaborate and partner with the State, the business community, and other stakeholders to pursue a broad range of future economic development opportunities, including those located in proximity to State transportation infrastructure.
2. Cities and towns cannot support development proposals, task forces, commissions, districts, development authorities or other legislation that would deprive local municipalities of their traditional local land use authority on private property, or deprive them of control of tax increment generated within their jurisdiction without their consent.
3. League staff should seek appropriate opportunities to communicate the principles contained within this resolution with State legislative leaders.
III) Fireworks i. Resolution 2016-001A and Resolution 2014-006
1. UCA 11-3-8 be amended which currently prohibits cities and towns from adopting ordinances or regulations that conflict with UCA 53-7-220 through 53-7-225, in such a way as to allow individual cities and towns to adopt ordinances or regulations that appropriately address the needs and concerns of each city or town and which are not any more liberal than what State law allows.
2. For example, the Utah State Legislature could modify the current State fireworks regulations to: (a) Restrict the scope and the nature of legal fireworks within the State of Utah; (b) Reduce the number of days that fireworks are allowed to be discharged; and (c) Restore the authority of local cities and counties to regulate fireworks within their respective jurisdictions as necessary to protect public safety.
IV) Population Growth
i. Growth and Housing Resolution 2018—004
(A) Preparing for the Future and Maintaining the Individual Character and Community of Utah’s Cities and Towns
I. Population growth and the housing gap
1. Utah cities and towns will engage with other stakeholders to formulate and consider state initiatives that facilitate the accommodation of population growth, and that enhance flexibility of other revenue tools.
2. Utah cities and towns support expanding the use of accessory dwelling units where appropriate.
3. Utah cities and towns are willing to review zoning ordinances, regulatory ordinances, and processes to facilitate additional housing units (i) where the infrastructure can support them, (ii) particularly near current and future transportation corridors, and (iii) in a manner that preserves local official decision-making.
4. Utah cities and towns support efforts to inform residents about population growth and mitigate the impacts on their quality of life.
II. Housing affordability
1. Utah cities and towns will support federal policies that could ease material and labor costs that impact housing prices.
2. Utah cities and towns support other efforts to reduce costs of housing that are not tied to infrastructure.
3. Utah cities and towns will support state and local efforts to improve wage growth.
III. Affordable housing
1. Utah cities and towns commit to examining their current housing stock by complying with HB 259 (2018) Moderate Income Housing Amendments to incorporate moderate income housing into their general plans.
2. Utah cities and towns will support state financial support and other incentives such as inclusionary zoning in certain areas to preserve or create affordable housing. IV. Direct democracy
1. Utah cities and towns support the modernization of the direct democracy process in a way that protects the legislative authority of cities and their residents and ensures clarity, consistency, transparency, and fairness for all.
(D) We, the members of the Utah League of Cities and Towns, further resolve that:
I. Legislative authority:
1. Utah cities and towns will oppose any state legislative effort to erode traditional local legislative authority over planning and zoning decisions, as previously established in ULCT Resolution 2007-1.
2. Utah cities and towns will oppose any state efforts to penalize municipal leaders for land use decisions.
3. Utah cities and towns will oppose any state legislative efforts to reduce the local legislative authority of city councils or of the people themselves per Article VI of the Utah State Constitution.
II. Revenues and planning for infrastructure and services:
1. Utah cities and towns will oppose any state efforts to restrict the municipal ability or reduce existing municipal revenues to fund infrastructure needs and public services.
2. Utah cities and towns will oppose any state efforts to disproportionately shift the burden of paying for necessary infrastructure because of new development from future residents to current residents.
3. Utah cities and towns will engage with the other stakeholders to formulate and consider state initiatives for funding (i) the acquisition and development of transportation corridors of regional significance, and (ii) other infrastructure needs, which can accommodate future residential, commercial and retail growth so long as such initiatives preserve local official decision-making.
III. General:
1. ULCT will oppose state legislative efforts that violate principles of local authority, create an unfunded mandate, enforce a one-size-fits-all approach, or promote a “solution” in search of a problem.
V) Public safety i. Safe and Respectful Communities, Resolution 2011-004
Now, Therefore be it resolved that THE LEAGUE OF CITIES AND TOWNS puts forth this Resolution in support of safe and respectful communities as a common standard of behavior for all people, to the end that every individual and every community in Utah, keeping this Resolution constantly in mind, shall strive to promote respect and safety for all residents of our cities and towns, and shall prevent acts of violence against any member of our communities.
1. Everyone has the right freely to participate in the life of the community, free from fear of violence and actual acts of violence. 2. Acts of violence are not acceptable and will not be tolerated by the community, the government and the legal system. 3. Communities are committed to providing every resident the opportunity to live a full and engaged life without fear of violence. ii. Op-ed that the ULCT Board of Directors published about public safety: https://www.deseret.com/opinion/2020/6/22/21297205/utah-league-of-cities-and-towns- local-law-enforcement-community-improve-trust
VI) Tax policy i. Property Tax Resolution 2016-003
1. The current State “truth in taxation” regulations, that require a municipality to declare that it is proposing to increase property taxes, as a precondition of receiving additional property tax revenue, even when the actual proposed tax rate may remain the same or decline, is not truthful and is not fair, particularly when compared to the fact that the State of Utah receives increased revenues each year from income tax and sales tax without being required to make any such declaration.
2. Local municipalities need to be able to obtain some growth in property tax, without artificial impediments, in order to fund the increasing cost of essential municipal services, without and to avoid the undesirable effects of excessive dependence upon sales tax revenues and retail development. ii. Tax Structure Resolution, 2005-001
(4) Amend Truth-In-Taxation to make the newspaper ad more informative and less inflammatory. iii. Financial Sustainability Resolution, 2012-004
Be it resolved that the Utah League of Cities and Towns petitions for this Resolution to allow the ULCT and its staff to work with all interested parties to formulate a strategy to create long-term sustainability in local government financial tools. iv. Tax Structure Resolution, 2011-001
Now, therefore be it resolved that we, the members of the Utah League of Cities and Towns, recommend that we reaffirm the tax principles adopted in 2005. In addition, we recommend that before any statutory changes are adopted that impact municipal funding, that the Utah Legislature considers the following factors:
Any change to municipal funding should include the comprehensive input of cities and towns to ensure that all circumstances are considered.
Recognition that periodic evaluation of the funding tools available to local government is important.
Recognition that a review of municipal funding sources should not be singularly focused on one portion of the funding, but should be comprehensive of all available funding sources.
Recognition that there is no one right, or fair, answers to sales tax distribution. Each formula has “pro’s and con’s and must be generally supported by Utah’s cities and towns.
Maintenance of a 50/50 distribution formula for the municipal sales tax creates stability and consistency for local governments, and has been agreed to by our membership as the suggested distribution formula and “hold harmless” cities forfeited sales tax growth starting in 2005 to maintain that distribution formula.
Significant long-term financing, business development, land use, and community sustainability decisions have been made by municipalities based upon the premise of a continuing 50/50 distribution formula.
Changes to the distribution formula creates “winners” and “losers” and should be evaluated carefully.
VII) Transportation i. Motor fuel tax, 2018-003
1. Cities and towns support legislative action, either through the legislature or directly by the people, that would result in an increase of the gas tax.
2. Cities and towns support efforts to inform the general public about local transportation funding needs in order to repair, replace, or construct vital road infrastructure. 3. Cities and towns urge the Utah State Legislature, if voters approve Question 1, to increase the gas tax by ten cents.
4. Cities and towns urge the Utah State Legislature to allocate the ten cent gas tax increase according to consensus formulas. ii. Transportation Strategy, Resolution 2014-002
1. The Utah State Legislature empower cities and towns with the financial tools to fulfill the new paradigm of transportation that our residents expect; and
2. The staff of the Utah League of Cities and Towns is authorized with the necessary flexibility to pursue all potential funding options to address the new transportation paradigm.
3. The Utah State Legislature should provide or authorize adequate funding to implement the 2040 Unified Transportation Plan, by providing adequate increased funding for State transportation needs, local transportation needs, and for transit needs.
(D) We the members of the Utah League of Cities and Towns recommend that the Utah State Legislature carefully consider the following comprehensive approach:
1. A statewide, local option 1⁄4 cent sales tax dedicated to transportation. This statewide, local option sales tax would provide additional critical transportation infrastructure funding for cities and towns to invest in the new transportation paradigm and reduce the impact of growth or aging transportation infrastructure on municipal general funds.
2. The 1⁄4 cent sales tax for transportation would generate the approximately $3 billion between now and 2040 and could meet the priority needs identified in the Unified Transportation Plan.
3. Clarify and expand the definition for what transportation funds can be used to reflect both the diversity of transportation options in cities and town and the demand from our residents for more active transportation options. Under current state law, B&C revenues via the motor fuel tax may only be spent on B&C roads and on transportation modes within B&C rights of way. The new definition could include transit, sidewalks, trails, bridges, signage, road safety, tunnels, bicycle paths, and other modalities outside of B&C rights of way. Investing in trails, sidewalks, and bike paths will result in Utahns living more active and healthy lifestyles and thus decreasing health care costs and improving quality of life. Investing in transit, trails, and bike paths will also help improve the air quality because it will reduce the quantity of motor vehicles on the roads.
4. Raise the traditional statewide motor fuel tax and include an indexing component so that the motor fuel tax could keep pace with inflation. Date: December 4, 2020
To: Cedar Hills Mayor Jenney Rees on behalf of Governor-elect Spencer Cox and the transition team
From: Cameron Diehl, Executive Director, Utah League of Cities and Towns
RE: feedback from cities about how to improve the efficiency and effectiveness of state government
Note: ULCT sent this memo to Mayor Rees on Nov. 24 but then received input from a couple of additional cities. I have noted and dated their feedback below.
Thank you for the opportunity to provide feedback to Governor-elect Spencer Cox and his incoming administration. The below memo outlines feedback that we received over the last couple of weeks from cities ranging in size from Orem to Providence and Clearfield to Moab.
In sum, the membership has expressed general support for how state agencies conduct their business currently. They also highlighted the need for more proactive and collaborative communication between state agencies and municipalities. For example, I heard frequently that the communication, beyond UDOT, was lacking on the local level and at times city leaders felt like counties had more regular and updated information than cities did. Several people indicated that the state and cities should see themselves as “on the same team” to ensure the quality of life of our collective constituents.
Before I identify city feedback about specific agencies, here are some additional thoughts from me. it is important for the Governor-elect, his senior staff, and his agency directors to be on the same page about their vision and expectations for the state. For example, we as ULCT staff have been frustrated previously to meet with the Governor and hear one policy direction and then meet with senior staff who push an entirely different policy direction. The executive branch also needs to assert its legal responsibility and ensure a strong separation of powers with the legislative branch.
The state provides many resources to local government that are currently scattered across agencies. The state also regulates local governments in many ways. I presented to the ULCT Board of Directors about a model that Colorado and some other states use to better organize state resources for local governments. I’ve heard some interest from our members in that approach and will submit the concept to the transition team after Thanksgiving. I’m also working with leaders from the Utah Association of Counties, metropolitan planning organizations, and associations of government to identify the best way to provide regular input to the administration about important policy issues.
Finally, the Governor-elect can use his “bully pulpit” to explain the value of what agencies are doing to the general public in order to build public confidence in government. The Governor-elect can and should be the leading voice to help the public understand the challenges around growth and how we are all working together to plan for the future, mitigate negative impacts, and balance the needs of today’s and tomorrow’s residents. While it is great to proclaim that Utah is the “best managed state,” it is important to help the public understand how state and local government work together to ensure our quality of life. I’m concerned about the growing distrust in government and I believe that the Governor-elect’s ability to humanize issues and connect directly with Utahns will be a game-changer for our state.
Department of Transportation (UDOT):
Multiple people articulated their appreciation for UDOT’s collaborative approach on planning. For example, one city referred to the relationship with UDOT as a “model” because of regular meetings to “discuss on-going projects, plans for the future, address proactive solutions to issues ‘lying in wait’ and build rapport with each other.” One elected official emailed that “we have a good relationship with UDOT because they reach out to us with issues and we've developed relationships with individuals in the organization. I would like to see that happen with other agencies.”
That said, one city raised two UDOT specific issues. First, “UDOT allows its contractors to utilize their rights of way (e.g. the space around on and off ramps) as staging or lay-down areas for highway projects. I get that having a staging area is necessary. However, on and off ramps are gateways into cities and make an impression. In our case, there is practically never a time when the 700 South interchange doesn’t look like a dump, thanks to UDOT’s policies and their contractors. They just don’t seem to care how their projects impact the look and visual impression of a city.”
Second, “UDOT has policies for each of their highway categories that govern the spacing between intersections and access points. Sadly, these policies seem to be based on the assumption of development through virgin territory. In our city’s case, practically everything is redevelopment. Not only that, but it is redevelopment that is addressing important regional issues, such as demand for housing (even affordable housing), sustainable growth patterns consistent with the Wasatch Choice vision, public transit, etc. Unfortunately, our reward for doing these things is a constant battle with UDOT about what they will and won’t allow regarding access to their highways. In other words, it seems that UDOT’s policies encourage sprawl and are a disincentive to smart, sustainable redevelopment. The people there are good, but the policies don’t jive with the bigger vision and the need to accommodate growth (especially denser growth).”
On a related note, one mayor wrote “there is a lot of unnecessary red tape that prevents good development and better plans because of the mindset that this is how it’s been done and this is the way our procedure allows us to do it. The ability for entities to be able to assess that and update policies is crucial. A notable one was that my city was not able to get a state road put in
despite offering to exchange land for it, pay outright, and offer reimbursements. Better communication with the cities directly is critical for proper planning and development.” I’ve heard similar frustrations from cities through the years.
That said, my personal experience is that the hiring two years ago of Teri Newell and the re- alignment of UDOT after SB 136 has greatly improved the planning coordination between UDOT and local governments.
I add that UDOT is very collaborative legislatively (Linda Hull is a valuable resource for both UDOT and local government) and they have been tremendous partners on the motor fuel tax and the development of the road usage charge program with ULCT staff. The road usage charge is the future of the motor fuel tax because it will actually become a user fee and due to the decreasing consumption of traditional gasoline. Cities and towns must be part of the road usage charge future. We still have challenges to work out—the mechanism for tracking miles, the tax collection, individual privacy, etc.—but UDOT is working on all of those challenges. I wrote a letter to the USDOT requesting flexibility for cities and towns to also have the ability to impose a road usage charge alongside the UDOT charge.
Department of Environmental Quality (DEQ):
DEQ is in a difficult spot as they are often enforcing federal unfunded mandates that frustrate state and local leaders and property owners. DEQ has improved their communication with local governments but could still enhance their articulation of the underlying health reasons for the mandates.
One public works director stated “I would like to see more collaboration when it comes to implementing new rules (stormwater, drinking water, water rights, etc.). I understand it is the ultimate responsibility of the municipality to follow the rules and guidelines, but as we all know resources are limited. The state needs to allocate more resources to the actual implementation of a particular program because simply being the enforcing agency isn’t working. We need more resource to help us, not only, understand the why, but to support it as well.”
Another city added that the state should “be slower to punish municipalities not conforming with the letter of state regulations, and more willing to instruct and assist to fully conform.”
So you know, Nancy Lyon interviewed ULCT’s Director of Policy Wayne Bradshaw and me about DEQ specifically. Is she on your transition team subgroup? We gave her a lot of information.
Public safety (DPS):
Several cities raised questions about “police reform” and where the Governor-elect intends to go in that dialogue. Several cities expressed support for DPS Commissioner Jess Anderson and urged improvements to POST’s training options. So you know, I was in a briefing on Nov. 23 where the POST Director outlined some additional requirements to basic training that will begin in 2021. That
same briefing also touched on public safety data collection and multiple local government leaders (police chiefs and sheriffs) raised the frustration around the inability of the different data collection systems in police departments, sheriff offices, and jails to communicate with each other. It is difficult to have data-driven conversations about public safety when the data collection is impossible to do because of differing standards and systems. We want to respect the autonomy of local governments but also figure out a way to improve data collection and data sharing.
One police chief wrote “I appreciate Commissioner Anderson communicating with the chiefs directly during the pandemic and the earthquake. However, prior to that it didn’t seem like there was that type of communication. I hope the same level of communication continues and not just when there is a crisis. Please pass on that I truly appreciate the commissioner’s communication since March! I believe he has excelled in communicating the State’s response to civil unrest, the earthquake, and the pandemic.”
One city urged an audit of the Bureau of Emergency Medical Services and raised concerns about supporting agencies who want to increase their licenses.
Another city requested an increase in funding for emergency management and urged a more collaborative relationship between the state and cities, especially on ordering and sending resources to emergencies outside of Utah. The same city raised concerns about the delay in reimbursing cities for out-of-state deployment because the current delay for reimbursement can be up to a year.
Post-Nov. 24 addition:
Another city raised concerns about the Department of Emergency Management and the lack of coordination in the software between the department and Salt Lake County Emergency Management. Likewise, that city was concerned about the mutual aid system.
A city also pointed out that the relationship between cities in Salt Lake County and the Division of Forestry, Fire, and State Lands (FFSL) could improve. For example, the city requested a simpler way to update the National Wildfire Coordinating Group and the Resource Ordering and Status System qualifications. The city also recommended that Salt Lake County needed their own representative with FFSL because the county currently shares a representative with Davis and Tooele Counties or relies on the United Fire Authority. The city recommended that the state revise fire resource rates to better match federal rates and surrounding state rates.
On an unrelated note, one city suggested that the Department of Commerce create an apprentice program or other program to increase the quantity of building inspectors.
Parks and Recreation:
One city’s recreation director suggested that state parks personnel rejoin the Utah Recreation and Parks Association (URPA). The recreation director stated that they pulled out due to state budget cuts and said that there was a need for more coordination and sharing of resources between state parks staff and local governments. For example, the state could provide expertise to local governments about urban fishing, special use parks, and special events.
On a related note, I sit on the Governor’s Office of Economic Development’s Outdoor Recreation Grant Advisory Committee which is one of the best parts of my job. I think it is a model for state- local collaboration. The state provides grant money to communities to enhance outdoor recreation infrastructure based on certain criteria that includes economic development, connectivity, and access for residents and visitors alike. The city demonstrates local partnerships and funding streams and the state then becomes a partner. We always have more worthy projects than available dollars and the demand for outdoor recreation, especially as our population continues to grow, will continue.
Finance (several agencies):
Several cities have raised the ongoing question about the collection and distribution of online sales tax. ULCT has done several events about this topic but it appears that the Tax Commission could improve their communication to cities to ensure confidence that online sales tax dollars are flowing to the cities where the residents live who are making the online purchases.
On a somewhat related note, several cities raised frustration about the perceived antagonistic approach that the Utah State Auditor takes toward municipalities. While Auditor John Dougall is independently elected, their hope was that the Governor-elect could encourage the auditor to be less antagonistic.
Conclusion:
In conclusion, here is a comment from a city manager which I think is indicative of cities in general about state government and the Governor-elect’s outreach:
As a city, our most productive state agency associations are by way of regular, scheduled meetings where we can come together to discuss common issues and concerns. Moreover, such relationships are also the result of BOTH city and state organizations reaching out to each other to coordinate and discuss matters that are important to those we collectively serve.
In contrast, other state relationships we have are the result of reactive responses to things that have happened or are scheduled to occur in the immediate future without advance warning or information. It is these relationships that are most frustrating as they reflect poorly on both the state and our municipality and serve to reinforce the unfortunate notion that governments generally do not work together, are inefficient and do not strive to build commonality in relation to services we collectively provide to those we are serving.
As a city, we look forward to working with Governor-Elect Cox and his team as we continue to build a better community and state. COMMITTEE ASSIGNMENTS 2021
HOUSE OF REPRESENTATIVES
Business & Labor Joel Ferry, Chair Walt Brooks, Vice Chair Brady Brammer Jim Dunnigan Tim Hawkes Jon Hawkins Brian King Cory Maloy Ashlee Matthews Calvin Musselman Casey Snider Mark Strong Jordan Teuscher Norm Thurston Mark Wheatley
Law Enforcement & Criminal Justice Ryan Wilcox, Chair Jeff Burton, Vice Chair Francis Gibson Matthew Gwynn Sandra Hollins Marsha Judkins Kelly Miles Paul Ray Angela Romero Mike Schultz Andrew Stoddard
Transportation Kay Christofferson, Chair Mike Winder, Vice Chair Melissa Ballard Steve Christiansen Joel Ferry Suzanne Harrison Dan Johnson Karen Kwan Ashlee Matthews Merrill Nelson Jeff Stenquist Ray Ward
Government Operations Cory Maloy, Chair Norm Thurston, Vice Chair Walt Brooks Jen Dailey-Provost Phil Lyman Mike Petersen Val Peterson Candice Pierucci Stephanie Pitcher Steve Waldrip
Revenue & Taxation Robert Spendlove, Chair Adam Robertson, Vice Chair Nelson Abbott Stewart Barlow Joel Briscoe Steve Eliason Suzanne Harrison Karianne Lisonbee Jefferson Moss Doug Sagers Travis Seegmiller Andrew Stoddard Mark Strong
Political Subdivisions Jim Dunnigan, Chair Calvin Musselman, Vice Chair Gay Lynn Bennion Jeff Burton Steve Christiansen Matthew Gwynn Mike Kohler LaWanna Shurtliff Jordan Teuscher Elizabeth Weight
Economic Development & Workforce Services Steve Handy, Chair Jeff Stenquist, Vice Chair Clare Collard Francis Gibson Steve Lund Carol Spackman Moss Doug Owens Susan Pulsipher Mike Schultz Mike Winder
SENATE
Business and Labor Sen. Curt Bramble, chair Sen. Kirk Cullimore Sen. Gene Davis Sen. Don Ipson Sen. Karen Mayne Sen. Dan McCay Sen. Scott Sandall Sen. Jerry Stevenson Sen. Todd Weiler
Economic Development and Workforce Services Sen. Ron Winterton, chair Sen. Derek Kitchen Sen. Karen Mayne Sen.-elect Mike McKell Sen. Ann Millner Sen.-elect Derrin Owens Sen. Jerry Stevenson
Government Operations and Political Subdivisions Sen. Daniel Thatcher, chair Sen. J. Stuart Adams Sen. Gregg Buxton Sen. David Hinkins Sen. Jani Iwamoto Sen.-elect John Johnson Sen. Kathleen Riebe Sen. Evan Vickers
Judiciary, Law Enforcement and Criminal Justice Sen. Todd Weiler, chair Sen. Kirk Cullimore Sen. Luz Escamilla Sen. Dan Hemmert Sen. Derek Kitchen Sen. Jerry Stevenson Sen. Daniel Thatcher
Revenue and Taxation Sen. Dan McCay, chair Sen. Curt Bramble Sen. Gene Davis Sen. Luz Escamilla Sen. Lincoln Fillmore Sen. Wayne Harper Sen. Dan Hemmert Sen. Don Ipson Sen.-elect Chris Wilson
Transportation, Public Utilities, Energy and Technology Sen. Wayne Harper, chair Sen. J. Stuart Adams Sen. Jake Anderegg Sen. Don Ipson Sen. Karen Mayne Sen. Ann Millner Sen. Kathleen Riebe Sen. Ron Winterton Policy Tiers Green: update to tier Tier 1 Tier 2 Tier 3 Water conservation Land Use Task Force: Land Use Task Force: Rainy day funds -PID -Annexation/incorporation Housing: -Annexation/incorporation -Low impact development Gun preemption -Building fees -Gravel pits -Development agreements -Impact fees -Low impact development -Water provider review of plat State homeless coordinator/plan -ADU -Development agreements -Building permits/vesting -Permitting & inspection authority -Water provider review of plat -Impact fees Anonymous code complaints -HRZ, other affordable housing tools -Building permits/vesting -Boundary line adjustment -Impact fees -Land use training Eminent domain Trust in public safety: -Boundary line adjustment -Officer discipline process -Land use training Convention and tourism Enterprise funds -Training assessment -Data collection Transportation/Air quality Emergency authority ULCT will engage on bills that impact trust & ULCT prism GIA and notice of claim Rainy day funds Marijuana, tobacco (land use, licensing) Municipal fees and taxes (in general) State homeless coordinator/plan Gun preemption Economic development/incentives Fireworks Metro Townships JRI investment
CRA/RDA (Sen. Harper) Public safety individual privacy
EMS Legal notice/print news
Transportation utility fee (defend) Emergency authority
CARES funding, 4th stimulus *Justice Courts Utility connections TO: ULCT Board of Directors FROM: Victoria Ashby, Director of Government Relations DATE: December 4, 2020 SUBJECT: HB 374 Building Regulation Amendments: Municipal Plan Review and Building Inspection Times
In House Bill 374 (2020 GS 4th Sub. Rep. Ray) the Legislature asked municipalities to examine whether cities and towns met land use process deadlines—plan review and building inspections— in the face of unprecedented population growth.
Background
• ULCT collected plan review and building inspection process data and was required to report findings to the Business and Labor Interim Committee. • In accordance with the legislation, ULCT collected data for the period between April and October of 2020. • ULCT focused on the 82 large and fast-growing cities identified in Senate Bill 341 (2019). These communities comprise 81% of Utah’s total population and most of the state’s residential and commercial construction activity. All municipalities were provided the opportunity to submit data. • To ensure robust data collection complicated by COVID-19, ULCT partnered with the American Planning Association – Utah Chapter and several planners to design the information gathering process and hired an intern to aggregate data and help cities navigate the reporting form. • Not all municipalities provide plan review and inspection services. Towns and smaller cities often contract with their county.
Plan Review Findings
“Plan review” is statutorily defined as the verification that the following conditions have been met before a municipality issues a building permit (UCA 10-5-132(1)(d)):
• The construction project complies with the State Construction and Fire Codes Act (Title 15A); • The construction project complies with the energy code adopted under UCA 15A-2-103;
1 UCA 10-9a-401 identifies these as cities of the first, second, third, or fourth class and cities of the fifth class located in counties of the first, second, or third class. This cross-section of municipalities includes communities ranging geographically from Smithfield to St. George.
• The construction project received a planning review; • The applicant paid required fees; • The applicant obtained final approvals from any other required reviewing agencies; • The construction project complies with federal, state, and local storm water protection laws; • The construction project received a structural review, which includes2: o Footing size and bar placement o Foundation thickness and bar placement o Beam and header sizes o Nailing patterns o Bearing points o Structure member size and span o Sheathing • an account of the total square footage for each building level of finished, garage, and unfinished space; and • The plans include a printed statement indicating that the actual construction will comply with applicable local ordinances and the state construction codes. Highlights
• Cities are required to complete plan reviews for single- and two-family dwellings and townhomes within 14 business days. Multifamily homes must be completed within 21 business days. (UCA 10-6-160 (3)) These deadlines do not include time for applicant corrections. HB 374 tasked ULCT to report on the net length of time from when a plan is requested to when a permit is issued. • The average length of time across all reporting municipalities was 8.34 business days for detached single family, two family, and townhome construction. • 93% of respondents’ average single family detached and townhome plan review lengths fell within the statutory parameters. • The average length of time for multifamily construction plan review across all reporting municipalities was 9.5 business days. • 93% of respondents’ average multifamily residential plan review lengths fell within the statutory parameters. • Municipalities were asked what their longest plan review time was. The mean response value was 25.3 business days for single-family detached, two-family, and townhomes. The mean response was 16.2 business days. • The average length of time for commercial plan review was 12.9 business days. • The average value for longest reported times was 29.4 business days.
• Every city but one reported they allow non-substantive plan changes3 without requiring resubmission. • 27% of respondents cited waiting on plan corrections by applicants or their engineers (sometimes repeated corrections) as the reason for prolonged plan review. • The pandemic significantly affected city budgets, particularly in the spring and early summer, and initially, though briefly, disrupted city services. Most cities established hiring freezes. This left some planning and building departments lacking resources and personnel.
Building Inspection Findings
Building inspection is the final oversight step in the construction process. Building inspectors confirm that the builder has followed the state building code, ensuring the structure is safe for occupation.
Highlights
• The data suggests that the average building inspection is executed within one (1) day of the date requested.4 • The average value for the longest reported residential inspection delays was 4.3 business days.
3 UCA 10-6-160(4)(b) and (c) imply “minor changes” are “items with which the city is concerned and may enforce during construction;” and “building code violations found in the plan.” Feedback from stakeholder groups suggest there may not be clear consensus amongst respondents.
4 A previous version of this document identified the average length of delay as 0.6 business days. This number was the mean result of the most frequently reported delay values: 0 and 1 business days. The decimal metric was replaced as it may have been misleading. The majority of response values fall within the 1-day timeline and all respondents’ average inspection lengths fell within the statutory parameters. • The average length of time reported for commercial building inspection completion was .95 business days. • 90% of respondents’ average commercial plan review lengths fell within the statutory parameters. • The average value for the longest reported commercial inspection delays was 4.1 business days. • Many cities reported they do not schedule same day inspections. • Several cities contract all building inspections with a private firm. • The averaged response for the longest number of business days between request and completion was 3.26. • Cities collectively contracted with private inspectors for approximately 5,277 hours (4,976 residential and 301 commercial) to meet the three-day requirement.5 • Cities cited staffing shortages and a high volume of inspection requests as the primary reason for delays.
52020 HB 29 requires municipalities to contract with a private inspector to perform inspections if the city inspector is unable to complete the inspection within three business days. State of the HBA update from Executive Officer Paul Ray
Government Affairs: NWHBA continues to lead the fight on the Hill with 6 of our members being members of the state legislature, including the Speaker of the House, Senate President and House Majority Whip. We are working on legislation this year to completely modernize plan checks, building permit approvals and inspections. Most cities are good to work with, but we do have many that do not follow state law on turn around times for plan check approvals and building permits. We have decided to allow a plan check that is stamped and certified by an engineer to bypass the city review. We will allow the builder to hire a third-party inspector to complete the inspections instead of waiting several days for a city to schedule one. We are also restricting what type of building ordinances that can be implemented by a city or county. It will be limited to health and safety; aesthetics will not be allowed. Gone will be the days of requiring rock and brick, pitch of a roof, what color the door is and other things that should be up to the buyer. I am tired of government redlining neighborhoods to keep lower income families out. I have been working with a roundtable in Washington DC, created by President Trump and chaired by HUD Secretary Ben Carson to make housing more affordable. We believe that by limiting the role of government and especially elected officials who try to discriminate against families based on social and economic factors, we can decrease the cost of housing and again make the American Dream attainable to all citizens.
Nov. 25, 2020 TO: ULCT Board of Directors FROM: Cameron Diehl, Executive Director DATE: December 10, 2020 SUBJECT: Executive Director’s Report for December 2020
We survived 2020! Thank you for your leadership in your communities and for your engagement in the Utah League of Cities and Towns. Cities work because of your leadership and dedication. I’m proud of what our team has accomplished in 2020 as we’ve completed our mission to advocate and provide resources for cities. While I and my team have missed seeing you in person in 2020, we are cautiously optimistic about what is ahead in 2021.
This report will provide an update on our external communication strategy and will request your input about the 2021 Midyear Conference. This report will also update you on the outstanding membership dues that ULCT staff is still trying to collect before the end of the calendar year.
Midyear Conference
Speaking of 2021, our team is already at work preparing for an in-person event in St. George on April 21-23. We are looking at outdoor spaces, re-purposing the ballrooms at the Dixie Center, and a virtual component. There will be a COVID-19 vaccine in circulation by April but we don’t know what the public health precautions will look like. The planning effort will occur simultaneously with the legislative session with several key contractual “go, no go” dates beginning in January.
As ULCT staff prepares for Midyear, we request a handful of board members be available for periodic check-ins about public health recommendations, event planning, and conference logistics.
Communication
On Monday, December 7, the officers, Victoria Ashby, and I met with the editorial boards of the both the Deseret News and The Salt Lake Tribune. We presented our pillars and policy prism, explained municipal compliance with SB 34 on housing policy, shared data from Y2 Analytics about trust in local government to plan for growth, and data about local fees and processes. We took questions about housing, CRAs, homelessness, seismic standards, and public safety. That evening, the Deseret News published an article about local government planning efforts.
https://www.deseret.com/utah/2020/12/7/22160096/news-state-government-city-planning-for- infrastructure-amid-growth-utah-league-of-cities-and-towns While The Salt Lake Tribune has yet to publish an article about the meeting, previous visits with their editorial board have resulted in important coverage and commentary. https://www.sltrib.com/opinion/editorial/2019/02/21/tribune-editorial-utah/
Additionally, several board members provided the monthly commentary on Utah Policy with the question “what new legislators should know about local government.” Thanks to board members (Mayors Beerman, Castleton, Niehaus, and Silvestrini and Council Member Tasha Lowery) along with Midvale Mayor Robert Hale submitted their thoughts which you can read here: https://utahpolicy.com/index.php/features/today-at-utah-policy/25676-messages-to-new- legislators-from-ulct
If you want to participate in our Utah Policy series, please contact Susan Wood at [email protected].
Membership
ULCT staff expects 247 of the 249 municipalities to be members of the organization this year. One municipality, Cedar Highlands, is in the process of disincorporating. Another municipality, West Valley City, has declared their intention to not participate this year. Meanwhile, ULCT has not received payment from the following municipalities though we expect them to participate. ULCT staff is contacting each mayor and clerk and we request your follow up assistance as board members:
Brighton, $1,600.91
Clawson, $77.31
East Carbon, $784.93
Enterprise, $884.13
Fielding, $210
Price, $5,259.68
Scofield, $43.37 TO: ULCT Board of Directors FROM: Abby Bolic, Operations & Membership Coordinator DATE: December 10, 2020 SUBJECT: ULCT Boards & Commissions Appointments & Vacancies
Utah Outdoor Recreation Grant Advisory Committee
ULCT Executive Director Cameron Diehl has served on the Utah Outdoor Recreation Grant Advisory Committee for the past 4 years. Cameron’s term will end January 1, 2021. Cameron would like to be reappointed to the committee for another four years. One member of this board is to be appointed to represent ULCT. We need the Board of Directors approval for his reappointment.
Joint Highway Committee Vacancy
The Joint Highway Committee is made up of representatives from Utah counties and cities. They meet twice a year and make project recommendations each spring to the Utah Transportation Commission. They also make recommendations for the use of state provided state park access funds. All appointments to the committee are to be made by the board of directors of the Utah League of Cities and Towns. The former City Manager for Blanding has relocated to Washington City. There is now a vacancy in region 4 south east. Counties in that region include Carbon, Emery, Grand, and San Juan. The League is soliciting applicants and we welcome suggestions for the appointment.
ULCT PROJECT GOALS & OBJECTIVES 2020 #CitiesWork
Cameron Diehl, 2020 goals to reflect the guidance that the Board of Directors Executive Director provided during the strategic planning sessions DATE Baseline for Goals: Attainable, Achievable, Impactful December 16,2019
Department: Training Develop a strategic training plan for the organization to implement annually, Goal #1 which includes targeted training opportunities for specific audiences within the league membership (newly elected, intermediate, seasoned veterans)
Objectives: Ensure sufficient training for rural members
Ensure 101 level programming at both Midyear and Annual that focuses on Elected Officials Essentials (EOE) Ensure 201 level courses that focus on bigger picture policy implementation Explore 301 level courses that are both nuts and bolts and policy implementation,
including options for “Muniversity” deep-dive sessions, utilization of retired experts, and partnerships with universities and other similar mission-driven organizations
Implement regular/quarterly LUAU trainings throughout the year with annual goals (promotion, course material, partners, frequency, etc.)
Explore options for regular trainings on other key topics outside of conferences
Goal #2 Stay fresh, efficient, and relevant on trainings, particularly at conferences
Solicit regular feedback from the affiliate groups, board members, and general Objectives: membership about potential themes and topics Develop an annual calendar of events/timelines/internal deadlines
Streamline the process for conference idea submissions
Ensure that ULCT staff attends NLC and other relevant events to bring ideas back to ULCT
Department: Finance/administration
Maximize programming dollars to pivot away from expensive entertainment or GOAL #1 other programs that don’t bring a sufficient return on ULCT investment
Objectives: Re-evaluate conference entertainment costs
Evaluate the ROI of programs like the essay contest, Local Officials Day, etc.
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Expand the value for sponsors and exhibitors and non-member revenue for ULCT Goal #2 at conferences and events
Implement the new sponsorship program with the a la carte options at Objectives: conferences
Enhance the experience in the exhibit halls for exhibitors, sponsors, & attendees
Enhance the ROI for sponsors year-round through publications, website, podcasts, LPCs, and other events
Hire Strategic Partnership Coordinator to improve communication between sponsors, exhibitors, and ULCT staff With the shift to the Salt Palace and the changes to the sponsorship program, Note: calendar year 2020 will be a benchmark for the number of sponsors, number of exhibitors, and amount of revenue to inform future goals and metrics
Cross-Department(s): Membership Engagement
GOAL #1 Enhance networking opportunities for members
Expand use of receptions and community of commonality caucuses (women in Objectives: local gov’t, emerging leaders, similar cities, mayoral forum, etc.)
Keep ULCT membership on state boards and commissions up to date
Increase member participation in ULCT training programming, particularly from Goal #2 elected officials, rural communities, and cities who have not recently engaged
Identify cities and towns who have not participated in the last three years and Objectives: reach out to them to participate Explore incentives to increase conference participation, such as a sponsor-
funded scholarship for rural members, early-bird discounts, group discounts, recent absence, first-time attendees, etc. (need to create an application process and timing)
Improve tracking of ULCT member participation at all events (conferences, trainings, LPC, etc.) 2020 will become the benchmark for attendance of members (particularly elected Note: officials), sponsors, and exhibitors at the Salt Palace to inform future goals
GOAL #3 Delineate staff duties over membership engagement
Roles: Membership, communication: the personal touch, spotlight (Comm.)
Membership, advocacy: legislative participation, leadership (leg team)
Membership, structure/operations: Nominations, boards and commissions, Board of Directors (Nick/Abby)
Membership, events: tracking, recruitment, strategies to increase attendance (events/training team)
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Department: Communication
GOAL #1 Enhance the visibility of ULCT officers, board members, and ULCT members
Objectives: Spotlight officers and board members in Friday Facts and on website
Provide them with opportunities to represent ULCT publicly (editorial boards, op- eds, capitol testimony, ULCT meetings, state leaders, NLC, etc.)
Have conference spot for President’s city, enhance the pomp and circumstance around the officer nomination process
Promote the Brent and Jennie Taylor Service Award within and outside the organization
Utilize the new website and social media to communicate with members and GOAL #2 stakeholders
Objectives: Articulate on our website what we train on and what we don’t
Keep the new website fresh, timely, and up to date
Have conference spot for President’s city, enhance the pomp and circumstance around the officer nomination process
Promote the Brent and Jennie Taylor Service Award within and outside the organization
Department: Advocacy
GOAL #1 Increase member participation in ULCT proactive advocacy efforts
Utilize COGs/COMs/AOGs/caucuses/Midyear to brainstorm and organize Objectives: priorities in the spring and summer
Use surveys to solicit input from members about legislative priorities
Encourage resolutions at the Annual Convention to define policy objectives
Improve formalities and efficiencies at the Annual Business Session
Improve efficiency of LPC (which could include improved remote participation and online voting) and focus LPC on necessary action rather than recaps
GOAL #2 Improve process for prioritizing ULCT political capital during the session
Objectives: Engage the officers regularly during the session
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Increase public coordination between state leaders and ULCT members and GOAL #3 elevate city issues during the 2020 campaign Objectives: Strategically invite state leaders to conferences as participants or presenters Coordinate with political parties to train city officials on how to run for delegate or partisan office Conduct video interviews (or podcast or questionnaire) with gubernatorial candidates
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