HomeMy WebLinkAboutLehi City Corporation - Public Financial ReportPOPULAR ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2021 | LEHI CITY CORPORATION, STATE OF UTAH
TABLE OF CONTENTS
ABOUT THIS REPORT .......................................................................................................................1
INDEPENDENT AUDIT OPINION ...................................................................................................2
MANAGEMENT OVERVIEW ............................................................................................................3
ABOUT LEHI CITY ..............................................................................................................................4
LEHI BY THE NUMBERS ....................................................................................................................6
REVENUE AND TAXATION ...............................................................................................................8
MUNICIPAL SERVICES ......................................................................................................................9
GOVERNMENTAL ACTIVITIES ......................................................................................................10
BUSINESS-TYPE ACTIVITIES .........................................................................................................11
CAPITAL ASSETS AND DEBT ........................................................................................................12
BUDGET TIMELINE ..........................................................................................................................14
GLOSSARY OF TERMS ....................................................................................................................15
ELECTED POSITIONS
Mayor .........................................Mark Johnson
City Council Member ..................Chris Condie
City Council Member ............Mike Southwick
City Council Member ................Katie Koivisto
City Council Member ..............Paige Albrecht
City Council Member ................Paul Hancock
FINANCE AND ADMINISTRATION
City Administrator ......................Jason Walker
Assistant City Administrator..Cameron Boyle
Finance Director ........................Dean Lundell
Assistant Finance Director ....Karma Bentson
Treasurer ......................................Alyson Alger
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 1
ABOUT THIS REPORT
The Popular Annual Financial Report (PAFR)
is designed to provide residents and other
interested parties with a simple and concise
overview of Lehi City’s independently-
audited Annual Comprehensive Financial
Report (ACFR). This report only contains a
brief summary of the City’s governmental and
business-type activities for the fiscal year (FY)
ended June 30, 2021.
In accordance with state law, the ACFR is
published within six months of the close of
the fiscal year. The ACFR presents a complete
set of financial statements in conformity with
generally accepted accounting principles
(GAAP) and is audited in accordance with
generally accepted auditing standards by a
firm of licensed certified public accountants.
The Government Finance Officers Association
of the United States and Canada (GFOA) has
an Award for Outstanding Achievement
in Popular Financial Reporting. In order to
receive the award, a government unit must
publish a PAFR, whose contents conform to
program standards of creativity, presentation,
understandability, and reader appeal. This
prestigious national award recognizes
conformance with the highest standards for
preparation of state and local government
popular reports.
An Award for Outstanding Achievement
in Popular Annual Financial Reporting is
valid for a period of one year only. Lehi City
has received a Popular Award for the last
ten consecutive years (fiscal years ended
2011-2020). We believe our current report
continues to conform to the Popular Annual
Financial Reporting requirements, and we are
submitting it to GFOA.
For complete, more detailed financial
information, individuals may obtain a copy
of the CAFR online at www.lehi-ut.gov/
departments/finance or by contacting the
Finance Department at (385) 201-1000.
PHOTOGRAPHY
Lehi City resident photographers participated
in the 2021 Lehi Photo Contest and submitted
pictures highlighting life, landmarks, and
lanscapes throughout our community. We
are pleased to present some of those photos
throughout this report. The photo on the
front cover was taken by Katrina Cummins,
and the photo on the back cover was taken by
Tyson Mickelsen.
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 20212
INDEPENDENT AUDIT OPINION
Each year the ACFR is audited by an
independent certified public accounting firm.
This firm conducts an audit “in accordance
with auditing standards generally accepted in
the United States of America and the standards
applicable to financial audits contained in
Government Auditing Standard, issued by
the Comptroller General of the United States.”
The audit does not express an opinion on the
effectiveness of the City’s internal control of
the budget, but rather expresses whether
or not the preparation and presentation of
financial statements is fair.
The FY 2021 audit was performed by Osborne,
Robbins & Buhler, P.L.L.C. In their opinion, “the
financial statements [contained within the
ACFR] present fairly, in all material respects,
the respective financial position of the
governmental activities, the business-type
activities, each major fund, and the aggregate
remaining fund information of Lehi City
Corporation…” The auditor also stated that
the changes in financial position, cash flows,
and budgetary comparison for the General
Fund and the Redevelopment Agency are also
fairly represented.
The complete opinion of the auditor is
available on pg. 15-16 of the ACFR, which can
be found at www.lehi-ut.gov/departments/
finance.
Photo credit: Brooke Qi
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 3
MANAGEMENT OVERVIEW
NET POSITION
The Net Position of the City is defined as the
difference between the City’s assests and
liabilities. Assets include land, water rights,
buildings, infrastructure, office furniture,
equipments, etc. Over time, increases or
decreases in net position may serve as a useful
indicator of whether the financial state of the
City is improving or deteriorating.
At the close of the most recent fiscal year,
the assets of the City exceeded liabilities by
$720,745,618. This is an increase of 10.8% over
the previous year.
2021 2020
Governmental
Activities
$290,781,382 $247,744,334
Business
Activities
$429,964,236 $402,188,861
Total $720,745,618 $649,933,195
A large portion of the City’s increase is related
to captial grants and developer contributions
of infastructure. The City’s net position also
reflects its investment in capital assets (e.g.
land, intangible assets, buildings, equipment).
OVERVIEW OF FINANCIAL STATEMENTS
The City’s basic financial statments are
comprised of three components: (1)
government-wide financial statements, (2)
fund financial statements, and (3) notes to the
financial statements.
The government-wide financial statements
provide a broad overview of the City’s
finances, in a manner similar to a private-
sector business. These statements distinguish
between functions that are principally
supported by taxes and intergovernmental
revenue (governmental activities) and those
that are intended to recover all or a significant
portion of costs through user fees and charges
(business-type activities).
This report will focus on providing a summary of
the government-wide analysis, governmental
activities, and business-type activities.
Information on the fund financial statements
and notes to the financial statements may be
found in the ACFR.
GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES
General
Government
Streets and
Highways Culinary Water Electric
Public Safety Parks and
Recreation Sewer Drainage
Community
Development Cemetery Pressurized
Irrigation Garbage
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 20214LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 20214
Originally settled by pioneers, Lehi has been
known as Sulphur Springs, Snow’s Springs,
Dry Creek, and Evansville. It was incorporated
as Lehi City in 1852. The Overland Stagecoach
Route, the Pony Express Trail, and the
Transcontinental Telegraph all passed through
or near Lehi during the peak of their use.
According to the U.S. Census Bureau, Lehi is
the 5th fastest growing city in Utah County
since the 2020 census. Lehi has more than
doubled in size since 2000, with population
estimates over 75,000 residents. Lehi is
quickly becoming a premier technology and
commercial center along the Wasatch Front.
Several landmark companies call Lehi home,
including Adobe, Texas Instruments (formerly
Micron), Xactware, Microsoft, Vivint, and
Xango. Lehi is also home to a wide variety of
retail stores and restaurants. Thanksgiving
Point, a unique destination offering museums,
botanical gardens, shopping, restaurants, and
other entertainment options, highlights all
that Lehi has to offer.
Lehi is a beautiful place to live and work.
Utah Lake is located just to the south,
with the picturesque Jordan River running
through the City. Lehi is surrounded by the
Wasatch Mountains on the East and the White
Mountains and Oquirrh Mountains on the
West. Lehi’s beautiful natural surroundings
provide easy access to hiking, mountain
biking, fishing, camping, skiing, hunting, and
many other outdoor activities.
LEHI CITY
PIONEERING UTAH’S FUTURE
Photo credit: Gaajidmaa Sukhbaatar
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 5LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 5
Lehi operates under a six-member council
form of government. Policy making and
legislative authority are vested in a governing
council consisting of the mayor and five
city council members, each elected at large
to serve four-year, staggered terms. The
governing council is responsible, among other
things, for passing ordinances and resolutions,
adopting the budget, appointing committees,
and hiring the City’s administrator, recorder,
and treasurer. The City’s administrator is
responsible for working with the mayor to
carry out the policies and ordinances of the
governing council, overseeing the day-to-day
operations of the government, and appointing
heads of the City’s operational departments.
The City provides a full range of services,
including police and fire protection,
construction and maintenance of roads,
power department, parks, commercial and
residential building inspection, recreational
opportunities (including a recreation center,
indoor pool, and outdoor pool), and many
cultural events. The City also owns and
operates a culinary water system, a secondary
water system, a wastewater system, a storm
water system, an electrical distribution system,
solid waste collection, and an emergency
medical service.
Indeed, Lehi City is pioneering Utah’s future!
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 20216
Population Square Miles
Median Age Housing Units
Historical Population Estimates
(Source: Lehi-Portrait of a Utah Town, by Richard Van Wagoner)
75,907 28.5
25 16,611
167 2,719 3,627
19,488
1850 20202010200018601870188018901900191019201930194019501960197019801990
LEHI BY THE NUMBERS
(2020 U.S. Census Estimates)
Photo credit: Katrina Cummins
75
,
9
0
7
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 7
State Roads
(Timpanogos Highway, 2100 North,
State Street, Pioneer Crossing)
Lane Miles
Median Income Principle Employers
Developed Parks
Undeveloped Parks
4
584
$95,510
3.85 80%
317 acres
137 acres
Average
Family Size
Home
Ownership
1. Texas Instrument (formerly Micron)
2. Adobe
3. Young Living
4. Vivint Solar
5. Alpine School Dist.
6. Entrata
7. Nexeo Staffing
8. Ancestry
9. Hadco
10. Xactware
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 20218
REVENUE AND TAXATION
Government-wide activities are funded
through two general types of revenue: (1)
program revenues and (2) general revenues.
PROGRAM REVENUES
Program revenues include charges for services,
grants, and contributions. These are typically
restricted to a specific program and service.
GRANTS
The City receives grants every year from the
federal, state, and county governments.
These grants fund different projects including
energy efficiency, library, parks, public safety,
and transit programs.
FEES
Fees are assessed for various services including
business licenses, recreation, building, power,
and water. All municipal fees are reviewed
annually, ensuring that charges for services are
based upon costs associated with providing
that service and current market conditions.
GENERAL REVENUES
General revenues are revenues that are
collected from the general public, including
property taxes, sales and other taxes, and
impact fees.
PROPERTY TAX
Utah County assesses the taxable value of
property and collects all property taxes.
Primary residences are taxed at 55% of their
assessed value. Other property is taxed at
100% of the assessed value.
Property taxes paid by Lehi residents are
divided among a number of tax-collecting
entities, including: Alpine School District,
Lehi City, Utah County, Central Utah Water
Conservation District, Timpanogos Special
Service District, and the Lehi Metropolitan
Water District.
SALES TAX
The total sales tax is made up of several rates
levied by the State, County, and City. Of the
7.15% tax on general purchases, the City
levies in total about 1% ($1.00 per $100 spent
by consumers). Beginning in April 2022, the
PARC (Parks, Arts, Recreation, and Culture) tax,
which was approved by the voters, will go into
effect and make the tax rate to 7.25%.
MUNICIPAL BONDS
Some of the City’s capital projects are funded
through debt. A detailed section on the City’s
debt administration can be found on page 13
of this document.
PROPERTY TAX DISTRIBUTION
Property tax is distributed to various taxing entities. The largest portion of the tax (just under 70%) goes to Alpine
School District. Lehi’s portion is about 15% of the taxable value.
69.04%14.29%8.53%5.77%
Special Districts
& Assessment
Fees
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 9
MUNICIPAL SERVICES
Generally speaking, Lehi City uses tax dollars
and fee revenue in two ways: (1) provide
municipal services and (2) fund capital
projects.
MUNICIPAL SERVICES
Lehi City offers a variety of services to
residents and visitors. These services generally
fit into one of six categories: public safety,
public works, leisure services, administrative
services, community development, and
non-departmental. The table below further
explains these categories.
CAPITAL PROJECTS
The second way the City spends revenue
includes the purchasing, construction, and/or
maintenance of roads, public buildings, and
infrastructure. The Mayor and City Council
direct staff on which services to provide and
to what level. The Mayor and staff then submit
a budget to the City Council for approval.
FUND STRUCTURE
Lehi City uses fund accounting to ensure
compliance with finance-related legal
requirements. All of the City’s funds are divided
into two categories: (1) Governmental Funds
and (2) Proprietary Funds. Governmental funds
include governmental activities. Proprietary
funds include business-type activities
(enterprise funds) and internal revenue funds.
The next sections will summarize financial
data for governmental activities and business-
type activities. Other fund information can be
found in the FY 2021 ACFR online at www.lehi-
ut.gov/departments/finance.
SERVICE FUNCTION DEPARTMENTS
Public Safety Provides high-quality services
to protect life, property, and the
environment
Police, Animal Control, Fire,
Emergency Medical Services, Justice
Court, Neighborhood Preservation
Public Works Provides services for the City’s
infrastructure and facilities
Parks, Cemetery, Culinary Water,
Pressurized Irrigation, Power, Sewer,
Storm Drain, Streets
Leisure Services Provides educational,
recreational, and social services
Library, Literacy Center, Legacy Center,
Outdoor Pool, Senior Center
Administrative
Services
Provides administrative support
and oversight to all city services
Administration, Emergency
Management, Finance, Human
Resources, IT, Legal, Risk Management,
Fleet, Utility Billing, Information Center
Community
Development
Provides services for
environmental, economic, and
community development
Building and Safety, Economic
Development, Engineering, Planning
and Zoning
Non-
Departmental
Expenses for activities that are
not specifically related to a
department
Money set aside for contingencies,
“rainy days,” inter-governmental
agreements
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 202110
GOVERNMENTAL ACTIVITIES
Governmental activities are accounted for
under four main governmental funds (general
fund, capital projects fund, special revenue
fund, and redevelopment agency fund)
and internal service funds for buildings and
grounds, information technology, fleet, and
rist management.
During FY 2021, governmental activities
increased the City’s net position by
approximately $43 million. Capital grants
and contributions were greater than FY 2020
by approximately $16.1 million. Capital grant
revenues related to infrastructure installed
by developers returned to more typical
levels prior to the COVID-19 related drop by
increasing $5.1 million higher than 2020. Also,
federal grants for infrastructure improvements
were $4.4 million greater in 2021 than 2020.
Expenses increased by approximately $1.3
million with the largest increases occuring
in streets and highway expenses as well as
public safety operating expenses.
The chart above shows a comparison of revenue and expenditures by functions of the general government.
ACTIVITIES AT A GLANCE
REVENUES BY SOURCE
Total Revenues
Grants/Contributions
Total Expenditures
Increase in Net Position
$108,089,848
$44,024,219
$65,052,800
$43,037,048
Property Taxes
$23,321,339
Grants/Contributions
$34,122,734
Sales Tax
$23,397,161
Charges for Service
$13,666,806
Other Grants/Fees
$13,581,808
Governmental Activities
Expenses and Program Revenues
Total Revenues Total Expenses
$25 Million
$20 Million
$15 Million
$10 Million
$5 Million
General
Govt.
Public
Safety
Comm.
Dev.
CemeteryStreets
Highways
Parks &
Rec.
Interest
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 11
BUSINESS-TYPE ACTIVITIES
During FY 2021, business-type activities
increased the City’s net position by
approximately $27.7 million. At the end of the
fiscal year, all of the City’s major business-type
activities reported a positive net position,
meaning that assets exceed liabilities.
The City is in the fourth year of a five-year
rate study for culinary water and pressurized
irrigation rates. The rates recommended by
the study were adopted by the City Council.
Rates for both utilities are 3.0% higher in
the 2021 fiscal year than the 2020 fiscal year.
The City contracts solid waste hauling with
Waste Management. Charges to customers
may increase as the rates charged to the City
grow. In order to properly maintain the City’s
storm drain system and remain compliant
with federal regulations, the monthly fee was
increased from $4.50 per month to $4.75 per
month.
Capital grants and contributions added $31.1
million to the net position of the City. This is
due to high levels of development. Overall
capital grants and contributions are indicative
of consistent growth levels year to year.
The continual growth of the city means that the cost to provide services has increased. However, those costs are offset
by new revenue generated from serving more customers.
ACTIVITIES AT A GLANCE
REVENUES BY SOURCE
Total Revenues
Grants/Contributions
Total Expenditures
Increase in Net Position
$103,115,988
$34,508,944
$75,340,613
$27,775,375
Grants/Contributions
$34,508,944
Charges for Service
$67,069,850
Other $1,537,194
Business-like expenses increased by $3.5
million in FY 2021.
$0
$10000000
$20000000
$30000000
$40000000
$50000000
$60000000
GarbageDrainageFiberElectricPressurized
Irrigation
SewerCulinary
Water
Business-Type Activities
Expenses and Program Revenues
Total Revenues Total Expenses
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 202112
CAPITAL ASSETS AND DEBT
CAPITAL ASSETS
During FY 2021, the City continued to
make investment in the development and
maintenance of infrastructure a top priority.
The total investment in capital assets, as of
June 30, 2021, amounts to $749,505,747 (net
of accumulated depreciation). This investment
includes land, buildings, improvements
(including infrastructure and distribution
systems), machinery and equipment, vehicles,
and office furniture and equipment.
Major capital asset activity during FY 2021
included the following:
DEVELOPER CONTRIBUTIONS: Developers
donated about $35.3 million in infrastructure,
land, and water rights to the City for
governmental and business-type activities.
POLICE: The City broke ground on a new police
station during July 2019. Approximately $11.3
million was incurred during the 2020 FY and
an additional $5 million during the 2021 FY on
this project.
MAIN STREET: Approximately $6.7 million was
spent on the construction and improvements
for Main Street from 2300 West to the
crossroads.
Capital Assets
(Governmental and Business-Like Activities Combined)
2020 2021 % Change
Land $ 154,045,331 162,989,690 6%
Intangibles 59,130,125 60,386,565 2%
Construction in Progress 40,393,512 43,732,599 8%
Buildings & Structures 28,794,204 26,630,122 -8%
Improvements (incl. Infrastructure) 418,459,974 444,796,305 6%
Machinery, Equipment, Vehicles 10,850,971 10,922,297 1%
Office Furniture & Equipment 64,572 48,169 -25%
Total $ 711,738,689 $749,505,747 5%
City crews re-paving Airport Drive
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 13
DEBT
Since 1998, the City has used bonds for the
acquisition of substations, water storage
facilities, the building of the new Jospeh D.
Adams Public Saftety Building, and drainage
facilities. The City has also bonded to improve
roads, expand the library, and incentivize
economic development. In FY 2021, Lehi City
had a total bonded debt outstanding of $133
million. The City issued $63 million in franchise
and sales tax revenue bonds. Additionally, the
City’s long-term obligations increased by $54.2
million due primarily to regularly scheduled
debt service requirements in conjunction with
the issuance of the new bonds for the City’s
fiber project.
PENSION LIABILITY: The City reported, in
accordance with the requirements of GAAP,
net pension liability totaling $1,988,813.
The City has no general obligation debt.
Outstanding Debt
(Governmental and Business-Like Activities Combined)
2020 2021 % Change
Tax Increment Note
(Payable to Developer)
$ 89,515,210 85,804,166 -4%
Other Notes Payable 1,841,053 1,661,491 -10%
Revenue Bonds 72,030,132 133,215,671 85%
Capital Lease Obligations 2,200,000 2,700,924 23%
Other Liabilities 10,812,087 7,276,930 -33%
Total $ 176,398,482 230,659,182 31%
Photo Credit: Tyson Mickelsen
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 202114
BUDGET TIMELINE
Lehi City adopts an annual budget following
an ongoing process that combines citizen
input, City Council direction, and staff
recommendations to meet community needs.
Residents can provide input by participating
in the Citizen Survey and attending public
meetings and budget hearings. The Citizen
Survey measures resident satisfaction with
administrative performance and the quality of
city services. Public meetings are held regularly
and provide residents the opportunity to
discuss services and community issues with
the City Council. Both forums are valuable
tools in the budget-planning process and pave
the way toward enhancing current services
and projects.
Contact the Finance Department at (385)
201-1000 with questions or for a copy of the
budget.
DECEMBER
1. Citizen Survey
2. Budget guidelines & instructions to departments
JANUARY
3. Amend current budget as necessary
FEBRUARY
4. Compile capital & replacement budget items
5. Review Citizen Survey
MARCH
6. Set goals for upcoming year
7. Hold budget work sessions
APRIL
8. Proposed budget to City Council
9. Tentative budget public hearing
MAY
10. Adopt tentative budget
JUNE
11. Amend budget as necessary
12. Adopt final budget
JULY
13. Fiscal year begins
14. Final budget takes effect
LEHI CITY POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2021 15
GLOSSARY
BUSINESS-TYPE ACTIVITIES: Activities
funded in whole or part by fees charged
for goods or services usually reported in
enterprise funds.
CAPITAL ASSETS: The City’s property,
including land, water rights, buildings,
infrastructure, office furniture, equipment, etc.
CAPITAL LEASE OBLIGATIONS: The amount
due for long-term asset lease agreements.
EXCISE TAX BONDS: Taxes collected on
a specific purchase (e.g. gas, alcohol, and
cigarettes, and tobacco). An excise tax bond
is supported by the revenue collected from
excise taxes.
FUND BALANCE: The accrual in excess of a
fund’s assets over its liabilities.
GENERAL REVENUES: Revenues that are not
matched to specific program expenses.
GRANT: A financial award given by the federal
or state government to an eligible grantee.
Government grants are not expected to be
repaid by the recipient.
GOVERNMENTAL ACTIVITIES: Activities
generally funded through taxes and
intergovernmental revenues; usually reported
in governmental funds and internal service
funds.
GOVERNMENTAL FUNDS: Funds that
account for most governmental functions.
These include: the General Fund, Special
Revenue funds, Capital Project Funds, and
Redevelopment Agency Funds.
NET ASSETS/NET POSITION: The City’s assets
minus the City’s liabilities.
NET OF ACCUMULATED DEPRECIATION: The
total investment in capital assets minus the
accumulated depreciation of those assets.
PROGRAM REVENUES: Revenues that derive
directly from the program itself and may
include parties outside the City’s citizenry.
REVENUE BOND: A bond that is supported
by the revenue from an income-producing
project. Revenue may include an increase
sales tax and charges for services due to the
completion of the project.
TAX INCREMENT NOTE: A payment due to a
developer to subsidize the cost of economic
development. The increase in tax revenue
(tax increment) caused by the development is
used to finance the debt.
Photo credit: Gaajidmaa Sukhbaatar
LEHI CITY CORPORATION | 153 NORTH 100 EAST | 385.201.1000 | WWW.LEHI-UT.GOV