“State of the City Report – 2013” –  by Cedar Hills City official mailed to residents

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Analysis Part One: Provided by Financial Experts/Advisers from CEDAR HILLS CITIZENS FOR RESPONSIBLE GOVERNMENT

CHCRG’s Financial experts have reviewed the “State of the City Report” and found it disappointing.  So much is missing that should have been published.  It’s like being an investor or share holder, and getting a fancy report that leaves out the most critical information necessary to determine whether our enterprise is profitable or not.  But the Report’s pictures sure are pretty!  Being partially transparent is not transparent at all.  

Here’s our CHCRG Financial Advisors expert review and commentary.  Follow along with a copy of the report at http://www.cedarhills.org/sites/default/files/state-of-the-city-report-2013.pdf :

• City is finally recognizing that Cedar Hills’ residents are paying the highest property tax rate in North Utah County.  However, the attempt to recast it by normalizing the tax rates by the number of residents is totally misleading. Due to the demographics, Cedar Hills has a young population and therefore many residents per household.  Dividing tax rates by the number of residents is totally bogus.  Property taxes are calculated on the value of each residence, not the number of people in the residence.  Shame on the City for twisting around statistics to try to portray an erroneous perspective.

• Transferring the events revenues and expenses out of the golf course fund is a step in the right direction (recommended a year ago).  Unfortunately the actual financial status of the events business is still not transparent as it is now hidden in the general fund.

• Glad to see that the “grill” was shut down.  Sammy’s is a for-profit business and the only reason they would agree to operate out of the Golf Course Club House would be if the rents they would pay the City would allow them to be profitable.  Thus the question: are the rents being charged Sammy’s covering the actual capital and operating cost of the use of the building space?  If the rents do not cover the actual costs, then the citizens of Cedar Hills are subsidizing Sammy’s.

• City admits general fund transfer to cover losses not covered by property tax.  Now the transfer will not be disguised as a loan and hidden by an obscure accounting manipulation.

• The explanation that the budgeted revenues were over estimated and therefore lead to a higher losses because budgeted subsidy was under estimated is misleading.  The golf course is losing more money than anticipated because not enough golfers are paying to golf in Cedar Hills.  It is not a budgeting problem.

• Budgets do not provide an indication of the financial status of the City.  Residents should be given a summary of the audited financials that show the operating revenue and expenses along with all subsidies for all years, current and past.

• Golf course financial details still add property tax subsidy to revenues.

For the complete analysis, please see this PDF… CHCRG Analysis of _State of the City Report 2013_.pt 1 of 2

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