10-2a-504. Feasibility study -- Feasibility study consultant -- Qualifications for proceeding with incorporation.

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Effective 5/1/2024

(1)Unless the lieutenant governor rescinds the certification under Subsection 10-2a-503 (5)(b), the lieutenant governor shall, within 90 days after the day on which the lieutenant governor certifies a feasibility request under Subsection 10-2a-503 (3)(a), in accordance with Subsection (2), engage a feasibility consultant to conduct a feasibility study.

(2)The lieutenant governor shall:

(a)select a feasibility consultant in accordance with Title 63G, Chapter 6a, Utah Procurement Code;

(b)ensure that the feasibility consultant:

(i)has expertise in the processes and economics of local government; and

(ii)is not affiliated with a sponsor of the feasibility request or the county in which the proposed municipality is located; and

(c)require the feasibility consultant to:

(i)submit a draft of the feasibility study to each applicable person with whom the feasibility consultant is required to consult under Subsection (3)(c) within 90 days after the day on which the lieutenant governor engages the feasibility consultant to conduct the study;

(ii)allow each person to whom the consultant provides a draft under Subsection (2)(c)(i) to review and provide comment on the draft;

(iii)submit a completed feasibility study, including a one-page summary of the results, to the following within 120 days after the day on which the lieutenant governor engages the feasibility consultant to conduct the feasibility study:

(A)the lieutenant governor;

(B)the county legislative body of the county in which the proposed preliminary municipality area is located;

(C)the primary sponsor contact; and

(D)each person to whom the consultant provided a draft under Subsection (2)(c)(i); and

(iv)attend the public hearings described in Section 10-2a-506 to present the feasibility study results and respond to questions from the public.

(a)The feasibility study shall include:

(i)an analysis of:

(A)the likely population and population density within the proposed preliminary municipality area when all phases of the map or plat for the proposed preliminary municipality area are completed; and

(B)the population and population density of the area surrounding the proposed preliminary municipality area on the day on which the feasibility request was submitted;

(ii)an analysis of the following, determined as if, at the time of the analysis, the proposed preliminary municipality area is incorporated as a town with a population of 100 people:

(A)the initial and projected five-year demographics and tax base within the boundaries of the proposed preliminary municipality area and the surrounding area, including household size and income, commercial and industrial development, and public facilities;

(B)subject to Subsection (3)(b), the initial and five-year projected cost of providing municipal services to the proposed preliminary municipality area, including administrative costs;

(C)assuming the same tax categories and tax rates as imposed by the county and all other current service providers at the time during which the feasibility consultant prepares the feasibility study, the initial and five-year projected revenue for the proposed preliminary municipality area;

(D)the risks and opportunities that might affect the actual costs described in Subsection (3)(a)(ii)(B) or the revenues described in Subsection (3)(a)(ii)(C) of the proposed preliminary municipality area;

(E)new revenue sources that may be available to the proposed preliminary municipality area that are not available before the area incorporates, including an analysis of the amount of revenues the proposed preliminary municipality area might obtain from those revenue sources;

(F)the projected tax burden per household of any new taxes that may be levied within the proposed preliminary municipality area within five years after incorporation as a town; and

(G)the fiscal impact of the proposed preliminary municipality area's incorporation as a town on unincorporated areas, other municipalities, special districts, special service districts, and other governmental entities in the county; and

(iii)an analysis regarding whether sufficient water will be available to support the proposed preliminary municipality area when the development of the area is complete.

(i)In calculating the projected costs under Subsection (3)(a)(ii)(B), the feasibility consultant shall assume the proposed preliminary municipality area will provide a level and quality of municipal services that fairly and reasonably approximate the level and quality of municipal services that are provided to the area surrounding the proposed preliminary municipality area at the time the feasibility consultant conducts the feasibility study.

(ii)In calculating the current cost of a municipal service under Subsection (3)(a)(ii)(B), the feasibility consultant shall consider:

(A)the amount it would cost the proposed preliminary municipality area to provide the municipal service for the first five years after the area incorporates as a town; and

(B)the proposed or current municipal service provider's initial and five-year projected cost of providing the municipal service after the proposed preliminary municipality area incorporates as a town.

(iii)In calculating costs under Subsection (3)(a)(ii)(B), the feasibility consultant shall account for inflation and anticipated growth.

(c)In conducting the feasibility study, the feasibility consultant shall consult with the following before submitting a draft of the feasibility study under Subsection (2)(c)(iii):

(i)if the proposed preliminary municipality will include lands owned by the United States federal government, the entity within the United States federal government that has jurisdiction over the land;

(ii)if the proposed preliminary municipality will include lands owned by the state, the entity within state government that has jurisdiction over the land;

(iii)each entity that provides, or is proposed to provide, a municipal service to a portion of the proposed preliminary municipality area; and

(iv)each other special service district that provides, or is proposed to provide, services to a portion of the proposed preliminary municipality area.

(4)If the five-year projected revenues calculated under Subsection (3)(a)(ii)(C) exceed the five-year projected costs calculated under Subsection (3)(a)(ii)(B) by more than 5%, the feasibility consultant shall project and report the expected annual revenue surplus to the primary sponsor contact and the lieutenant governor.

(a)Except as provided in Subsection (5)(b), if the results of the feasibility study, or a supplemental feasibility study described in Section 10-2a-505 , show that the average annual amount of revenue calculated under Subsection (3)(a)(ii)(C) does not exceed the average annual cost calculated under Subsection (3)(a)(ii)(B) by more than 5%, the process to incorporate the area that is the subject of the feasibility study or supplemental feasibility study may not proceed.

(b)Except as provided in Subsection 10-2a-505 (3), the process to incorporate an area described in Subsection (5)(a) may proceed if a subsequent supplemental feasibility study conducted under Section 10-2a-505 for the proposed incorporation demonstrates compliance with Subsection (5)(a).

(6)If the results of the feasibility study or revised feasibility study do not comply with Subsection (5), and if requested by the sponsors of the request, the feasibility consultant shall, as part of the feasibility study or revised feasibility study, make recommendations regarding how the proposed preliminary municipality area may be altered to comply with Subsection (5), unless the sponsors are precluded from modifying the feasibility request under Subsection 10-2a-505 (3).

(7)The lieutenant governor shall post a copy of the feasibility study, and any supplemental feasibility study described in Section 10-2a-505 , on the lieutenant governor's website and make a copy available for public review at the lieutenant governor's office.

Enacted by Chapter 534 , 2024 General Session