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CITY OF OREMCITY COUNCIL MEETING

56 North State Street Orem, UtahMay 8, 2012

3:30 P.M. WORK SESSION

CONDUCTING Mayor James Evans

ELECTED OFFICIALS Councilmembers Hans Andersen, Margaret Black, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner

APPOINTED STAFF Bruce Chesnut, City Manager; Jamie Davidson, Assistant City Manager; Greg Stephens, City Attorney; Richard Manning, Administrative Services Director; Stanford Sainsbury, Development Services Director; Mike Larsen, Public Safety Director; Karl Hirst, Recreation Director; Chris Tschirki, Public Works Director; Donna Weaver, City Recorder; and Rachelle Conner, Deputy City Recorder

CARE DiscussionCharlene Mackay, CNS Manager, advised the purpose for this work session is for the City Council to discuss where they want to go with the allocations. Staff has tentatively scheduled May 22nd for the City Council to approve the allocations; however, that can change if the Council desires.

Mayor Evans said he has looked at the information, and he is interested to hear what the Council has to say about the applications.

Mrs. Black said her goal was to make it work. She reviewed her proposed allocations as follows:

Facilities Recreation Commitment - $500,000 Center for Story Commitment - $300,000 SCERA Shell Handrails - $33,500

Total Facilities - $833,500 Maximum Original Bucket - $875,000

Mini Grants Roots of Freedom - $4,999 Chauntenettes - $4,999 Orem Chorale - $4,999 Utah Valley Civic Ballet - $4,799 (subtracted $200 for scholarship proposal) Colonial Heritage Foundation - $4,999 Utah Film Center - $2,500 (partial funding) Utah Storytelling Guild Story Camp - $4,999

City Council Minutes – May 8, 2012 (p.1)

Resonance Story Theater - $4,999 Wasatch Ballet Conservatory - $0 (no funding of scholarships) Utah Lyric Opera Society - $4,999 Latinos in Action - $4,999 Utah Baroque Ensemble - $4,999 The Provo Orem Word - $700 (live performance) Institute for Young Dramatic Voices - $2,500 (partial funding)

Total Mini Grants - $55,490 Maximum Original Bucket - $62,500

Major Grants Utah Regional Ballet - $40,000 Clear Horizons Academy - $0 Utah Valley Symphony - $9,800 SCERA - $500,000 Hale Center Foundation- $388,000

Total Major Grants - $937,800 Maximum Original Bucket - $750,000

Grand Totals Facilities - $833,500 Mini Grants - $55,490 Major Grants - $937,800 Administrative Costs - $27,000 Total - $1,853,790

2012 CARE Tax Funds - $1,630,000CARE Reserves to Facilitate Funding - $223,790Total Funding Sources - $1,853,790 Remaining Reserves - $21,753

Mr. Stephens indicated he was asked to research whether Clear Horizons qualified for CARE funds. He indicated State law requires the funding to go to cultural arts organizations. He then read the definition from State law. He expressed his opinion that Clear Horizons does not qualify as a cultural arts organization.

Mr. Sumner advised he forgot to add in the administration costs, and his proposal also uses the remaining reserves. He stated this is extremely difficult for him because all of the organizations had great presentations. He looked at the various applications and used the point system to determine his proposed allocations. He then reviewed his proposal as follows:

Organization Request Points Given AmountRoots of Freedom Foundation $4,999 23 $2,500Chauntenette Women’s Chorus $4,999 35 $4,999The Orem Chorale $4,999 39 $4,999Utah Valley Civic Ballet Company $4,999 25 $3,000Colonial Heritage Foundation $4,999 40 $4,999Utah Film Center $4,999 18 $1,000


Organization Request Points Given AmountUtah Storytelling Guild $4,999 37 $4,999Resonance Story Theatre $4,999 38 $4,999Wasatch Ballet Conservatory $4,999 32 $4,000Utah Lyric Opera $4,999 38 $4,999Latinos in Action $4,999 Education $4,999Utah Baroque Ensemble $4,999 31 $4,000The Provo Orem Word $4,999 14 $500Institute for Young Dramatic Voices $4,999 23 $2,500Total $52,493

35-40 points - $4,99930-34 points - $4,00025-29 points - $3,00020-24 points - $2,50015-19 points - $1,000Below 15 - $500

Organization Request AmountRecreation and Leisure Property Acquisition $500,000 $500,000Handrails – Scera Shell $38,000 $38,000Center for Story $300,000 $300,000Total $838,000

Organization Request Points Given AmountUtah Regional Ballet $75,000 33 $30,000Clear Horizons Academy Legal???Utah Valley Symphony $9,800 27 $8,000SCERA $660,970 43 $628,000Hale Center Foundation $634,702 37 $410,000

Total $1,076,000Available CARE With Reserves $1,875,000Total All Areas $1,966,493Need to Cut $91,493

Mayor Evans indicated if they do not cover the administration costs from the CARE funds, they will have to take it out of the General Fund.

Mrs. McCandless expressed her opinion that the CARE Tax does not need to have a reserve fund for emergencies. This is more like the CDBG funding that they distribute the entire amount each year. It is important to show the tax payers that they are not just setting money aside. She said she is comfortable spending the money that is available each year.

Mrs. Street said she has been asked whether the CARE funds have to be spent during the time period they are given. Mr. Stephens replied State law is not really clear on that issue, and the City will have to determine what their interpretation is. He then read the language from State


law. He noted he thinks they are fine saving the funds during the CARE Tax period. The difficulty comes after the eight-year tax is over.

Mr. Sumner noted he is not comfortable with having so many funds sitting in a savings account. He expressed concern with how the public would perceive it.

Mrs. McCandless advised the funds set aside for recreation have a purpose, but the reserves funds are just sitting there.

Mrs. Street agreed that they should go ahead and spend the reserves they have. She said she views the reserves differently than the money they set aside for recreation and the Center for Story. She said she wants to make sure as they field questions from the residents, she want to be able to say that they were able to save money for other projects while they were also improving and maintaining what they already have.

Mr. Andersen asked Mr. Stephens to obtain a better interpretation for what distribution means. He expressed concern that only forty percent of the people he polled said they would renew the CARE Tax. He said he thinks the support has gone down because the people feel it is not being spent the way they wanted it spent.

Mrs. McCandless questioned whether Mr. Andersen’s poll asked how the people wanted it spent. Mr. Andersen replied it was just a question that asked if they would vote for the CARE Tax again and sixty percent said no.

Mr. Stephens advised he would like to listen to the legislative session where the distribution period was discussed to see if he can glean their intent. He will then provide a written opinion to the City Council.

Mr. Seastrand said he is not interested in holding the funds out beyond the CARE Tax period.

Mr. Davidson explained the Legislature generally does not provide a lot of specificity when they pass bills in order to provide some flexibility.

Mayor Evans stated Mr. Sumner had a good point. When they go out and ask people to pass the tax again, they should have a good accounting of the money.

Mr. Sumner noted a lot of his comments were based on the fact that this question will be voted on next year and the residents will want to know how the funds had been spent.

Ms. Mackay stated staff is looking at providing more educational information for the residents to show them what this funding is and how it helps in the community.

Mayor Evans advised that is good. There is a group of successful businessmen in the community who were interested in raising the remaining funds for the Center for Story. When they approached some of the businesses, they were told that the facility is going to remove baseball fields, which is not true. It is so important to get the accurate information out to the residents.


Mr. Seastrand voiced his opinion that the reserves have served its purpose by having the extra funds each year to help keep the organizations as whole as possible. He said the CARE funds seem to be on the upswing, so he is fine with using the remaining reserves this year. He said he is struggling with some of the organizations wanting to do an event in Orem just to receive funds, even when they are not an Orem organization. As he was looking through the list, he saw a few of the organizations that work with SCERA, such as the Roots of Freedom. They hold their event at the Scera Park, and they utilize the SCERA costumes. He questioned whether the ability to fund that event could be handled through the SCERA. It seems that there could be some collaboration with the SCERA. Another example would be the Utah Valley Symphony.

Mr. Andersen asked who determines the total percent of funds the organizations can ask for. Mrs. McCandless explained it was the City that set the thirty-five percent amount. The Council did not want the organizations to become dependent on the CARE Tax. They modeled this after Salt Lake County.

Mr. Andersen suggested the City give the SCERA $1 million of the reserves to help construct their fly system. Mrs. McCandless replied that State law does not allow the CARE funds to be used for privately-owned facilities.

Mr. Andersen then commented that he would bet they could figure out a way to do this. Mrs. McCandless responded that the only way they could is if the City owned the SCERA building. Only public buildings can receive the CARE funds.

Mr. Andersen asked why they could not just use $1 million from the reserves to try to accomplish this. Mrs. Black advised there is not $1 million in reserves. The amount is down to just over $200,000.

Mrs. McCandless expressed her opinion that the organization does not have to be based in Orem. Part of the benefit for the community is the opportunity to watch the performances and be uplifted by the presentations. She is comfortable with having the groups who want to perform in Orem apply for the funds.

Mr. Stephens clarified that the thirty-five percent requirement is a City requirement that the City Council approved by ordinance. He noted it would not be appropriate for them to change that for this granting round because the applicants made their requests based on the thirty-five percent. If they wanted it changed, they should change the ordinance to request it for the next round.

Mrs. Street voiced her hope that the CARE Tax will be renewed. Orem is a better community because of the cultural arts opportunities. She thanked Mrs. Black and Mr. Sumner for their efforts in putting together the lists of recommendations. Mrs. Street advised the SCERA has a broad reach and variety in what they do. She said she feels the need to try to fund the SCERA as close to their request as possible. There is no other organization in the community that does as much as they do. The economy has been hard for all of these organizations, but she would like to find a way to fully fund SCERA’s request. That might mean they set aside less money for land acquisition for recreation this year.


Mrs. Black stated the City has allowed the organizations to include the CARE funds in their totals two years ago, so they continue to ask for more funds each year. If they did not allow them to include the CARE funds, the SCERA could have asked for $485,970 this year and the Hale could have asked for $498,902. There is an inflation thing that has occurred for the last two years. She stated the intent was to allow the organizations to receive more money; however, she does not believe it was so the City would fully funds their requests each year.

Mrs. Street noted for the record that she supports building library additions with library bonds, and she feels they have already given a lot of money to the Center for Story from the CARE Tax. She would prioritize the nonprofit organizations over a City facility that has other funding sources.

Mrs. Black indicated the other funding sources would include taxes and bonding, while this uses the CARE funds. Mrs. Street stated she understands that.

Mr. Sumner said that is why they need a game plan with dates for purchases for recreation and the Center for Story to show people what is being done with the money. They are not moving forward with any plan.

Mr. Chesnut advised they have the final design for the Center for Story. They need to raise an additional $740,000 for the Center for Story, and there is a campaign with the library folks and the business community in raising those funds. There are businesses that are interested in setting up an endowment to pay for the ongoing operational costs of the facility, which would address Mrs. Street’s concerns. They are moving forward with the Center for Story in a positive way and recreation recently held open houses, which has helped them determine the direction they want to go. They had 175 people attend the open house and give their input. That is the best open house attendance they have had in a long time. That input will be put into action and they will see the money spent.

Mr. Sumner noted that next year the residents will vote on renewing the tax, and with the perception the City has given the public, it will not pass.

Mr. Chesnut clarified that the conflict that was created a year ago between cultural arts and recreation created the problems with the CARE Tax. As he has talked with the cultural arts people and the recreation people, they all agree they need to quit the conflict and get together to or this CARE Tax will not pass. The CARE Tax is a great thing in the community, and those two elements have to get together. The conflict between the City and the cultural arts organizations has to stop, and they are trying to do that. They have been meeting with the SCERA and other organizations to try to lock arms and work together. This has to happen or the tax will not pass.

Mrs. Black indicated her intention is to have all of the organizations rise together. Everyone needs to rise in order to succeed. They need to understand that the City cannot give everyone everything they want.

Mr. Davidson explained it is very appropriate for the City to look at the CARE Tax as one-time money. They should look to accomplish projects that can be done without having the CARE Tax


in the future. Some of these projects, such as property acquisition, are an opportunity for the City to accomplish great things. He cautioned against allocating the funds with the assumption that the tax will be there in the future. Based on what he is hearing from the City Council, there are questions as to whether this money will be here in the future. He questioned whether they were creating a co-dependent relationship with some of the organizations. He wondered whether the City is feeding a process that they will not be able to continue in the future. The one-time opportunities may serve a better purpose for the funds.

Mayor Evans thanked everyone for their comments. He said they need to look at the allocations and decide how they want to proceed.

Mrs. McCandless suggested they start with the proposed Mini Grants and try to work through those numbers.

The Council looked at the difference between Mrs. Black’s and Mr. Sumner’s proposal and agreed to the following:

Organization AmountRoots of Freedom Foundation $4,999Chauntenette Women’s Chorus $4,999The Orem Chorale $4,999Utah Valley Civic Ballet Company $4,799Colonial Heritage Foundation $4,999Utah Film Center $1,000Utah Storytelling Guild $4,999Resonance Story Theatre $4,999Wasatch Ballet Conservatory $0Utah Lyric Opera $4,999Latinos in Action $4,999Utah Baroque Ensemble $4,999The Provo Orem Word $700Institute for Young Dramatic Voices $2,500Total $53,990

Mayor Evans asked if there were any other thoughts on the Major Grant allocations.

Mrs. Black said if they wanted to add more money for the SCERA, they could use the remaining reserves. That would raise them to $523,000.

Mrs. Street indicated a lot can happen when the City gets behind something, and they are doing that with the Center for Story. She said the City should also put their support behind the SCERA’s efforts in fundraising to remodeling their facility. She said the City cannot give them money for their physical facility; however, if the City could fully fund their programming, it would allow them to use their funds for the remodel.

Mrs. Black noted they could use some of the money they set aside for property acquisition on 720 South to increase SCERA’s allocation. Mrs. Street advised that is a great suggestion.


Mrs. McCandless remarked that SCERA has wonderful programming that touches so many people; however, the Hale Center Theater is also expanding their programming, and they need the additional help as well.

Subsequent to Council discussion, the following proposed recommendations were made:

Mini Grants - $53,990

Utah Regional Ballet - $40,000Hale Center Theater - $410,000SCERA - $600,000Utah Valley Symphony - $8,000

Facilities - $833,500

Grand Total - $1,945,490

Mr. Seastrand cautioned that this uses all of the reserves so, if the CARE Tax brings in the same amount next year, there will not be as much to fund the allocations next year.

Mr. Andersen expressed his opinion that the more they fund the SCERA the easier it will be to get the CARE Tax passed again.

Mayor Evans stated there were many organizations involved in getting the CARE Tax passed, including the Hale, recreation, SCERA, and the Center for Story. They all need to work together if they want to get the tax renewed.

REVIEW OF AGENDA ITEMS

The Council and staff reviewed the agenda items.

CITY COUNCIL AND STAFF NEW BUSINESS

Mayor EvansMayor Evans read a text message he had received from his wife stating she had received a robo call that came from the City Manager’s office telling people the City Council was going to raise property taxes that evening, and they should come to the City Council meeting.

He indicated the robo call was made by Aaron Campbell from that number without permission. He asked Mr. Andersen if he knew anything about it. Mr. Andersen said Mr. Campbell had talked about maybe doing it, but Mr. Andersen did not think he would actually do it.

Mayor Evans advised it is illegal to use that number without permission.

Mr. Chesnut then asked Mr. Andersen whether he told Mr. Campbell to make the call, to which Mr. Andersen replied no.


Mr. Chesnut indicated Mr. Campbell has used the City Manager and Mayor’s number as the one to go out to the community. That is a violation of the law, and the Attorney General’s Office wants to investigate the call. The City Manager’s Office is being flooded by return calls wanting to know why the City sent out this robo call. What has happened is unethical, and if the City is a part of it, it is a major problem.

Mrs. Black remarked that she would like this investigated.

Greg Stephens, City Attorney, stated they need to look into the matter.

Mike Larsen, Director of Public Safety, advised the Police Department would look into it tomorrow and contact the Attorney General’s Office.

Mr. Chesnut reiterated neither the Mayor nor the City Manager is making those calls. It came from Aaron Campbell, and Mr. Chesnut does know yet know who else is behind it.

Mr. Larsen indicated it should not be too difficult to find out who set this up.

Mrs. Black noted she would like a full investigation into this incident.

Mr. ChesnutMr. Chesnut stated staff had a nice ninety minute meeting with Hidden Hollow neighbors last week. They went through the history of the area because most of the residents in the area are new. The neighbors would like to lower the speed limit to twenty miles per hour and have public safety put a flashing speed sign up.

Mr. Sainsbury noted the street is twenty-two to twenty-five feet wide. This is a Planned Residential Development (PRD), and there is no parking allowed on the street. The street has full size lanes, but the homes are placed close to the street. Mr. Chesnut then indicated that Mr. Hirst has been working with Michael Green on the property east of Lakeside Park to make additional parking available, and it will be accessible for parking tomorrow.

Councilmember Street Mrs. Street indicated Richard Bradford, Pleasant Grove Economic Development Director, is having health problems and will not be returning to work.

Development Services Director, Stanford Sainsbury Mr. Sainsbury indicated Tim Christensen, former Councilmember, was involved in a plane crash, and he is in serious condition. They are concerned with pneumonia at this time.

The Council adjourned at 5:55 p.m. to the City Council Chambers for the regular meeting.

6:00 P.M. REGULAR SESSION

CONDUCTING Mayor James Evans


ELECTED OFFICIALS Councilmembers Hans Andersen, Margaret Black, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner

APPOINTED STAFF Bruce Chesnut, City Manager; Jamie Davidson, Assistant City Manager; Greg Stephens, City Attorney; Richard Manning, Administrative Services Director; Stanford Sainsbury, Development Services Director; Mike Larsen, Public Safety Director; Karl Hirst, Recreation Director; Chris Tschirki, Public Works Director; Donna Weaver, City Recorder; and Rachelle Conner, Deputy City Recorder

INVOCATION / INSPIRATIONAL THOUGHT Scott Gurney

PLEDGE OF ALLEGIANCE Ned Jackson

APPROVAL OF MINUTES

Joint Orem/Provo City Council Meeting of April 5, 2012, City Council Work Session of April 17, 2012, and the City Council Meeting of April 24, 2012

Mr. Seastrand moved to approve the minutes of the April 5, 2012, joint meeting of the Orem/Provo City Councils, the City Council Work Session of April 17, 2012, and the April 24, 2012, City Council meeting. Mrs. Black seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.

MAYOR’S REPORT/ITEMS REFERRED BY COUNCIL

Upcoming EventsThe Mayor referred the Council to the upcoming events listed in the agenda packet.

Upcoming Agenda ItemsThe Mayor referred the Council to the upcoming agenda items listed in the agenda packet.

Appointments to Boards and CommissionsMayor Evans recommended Rhonda Wilkinson be appointed to serve on the Beautification Advisory Commission.

Mrs. McCandless moved to appoint Rhonda Wilkinson to serve as a member of the Beautification Advisory Commission. Mr. Seastrand seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.

Mayor Evans recommended Nathan Coe be appointed to serve on the Heritage Advisory Commission.


Mrs. McCandless moved to appoint Nathan Coe to serve as a member of the Heritage Advisory Commission. Mr. Sumner seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.

Recognition of New Neighborhoods in Action OfficersNo new Neighborhood in Action officers were recognized.

PRESENTATION – Strawberry Days RoyaltyAlyson Johnson, Miss Pleasant Grove, introduced her attendant--Kylie Major, Chelsie Richards, Kirsten Millet, and Allie Howe. Miss Johnson welcomed those present to Strawberry Days in Pleasant Grove, which will be held June 19-23.Miss Major stated Tuesday will be the concert in the park. They will have free strawberries and cream and a vintage band. It is great for families.

Miss Millet indicated the famous baby contest will be held Wednesday morning and the children’s parade will be that night.

Miss Richards indicated Huck Finn Days will be on Friday. They will have a pie eating contest, face painting, and fishing.

Miss Howe noted Saturday they will have their Grand Parade at 10:00 a.m. There will be lots of local bands and floats.

Miss Johnson presented the City Council with a strawberry cheesecake.

The Pleasant Grove Rodeo Royalty then introduced themselves--Cheyenne Mellot, Chelsea Arnold, and Celeste Francis. The rodeo will be held June 20-23 at 8:00 p.m. There will be fireworks on Wednesday and Saturday, and they will have concerts on Friday and Saturday after the rodeo.

PROCLAMATION – Bike to Work Month – MayMrs. McCandless read a proclamation for Bike to Work Month.

Mrs. Black moved to proclaim May as Bike to Work month. Mr. Seastrand seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.

PERSONAL APPEARANCES

Time was allotted for the public to express their ideas, concerns, and comments on items not on the agenda.

Mayor Evans stated tonight the City Council will receive the tentative budget from staff. As a City Council they will review it in depth and receive feedback from the community. It will then be brought back for the City Council to adopt the final budget. Mayor Evans indicated his wife received a robo call this afternoon that came from the Mayor’s Office. Someone had said that


the City Council is raising taxes tonight and told everyone to come to the meeting. He stated that if anyone had attended because of that call, he apologized. The City did not authorize anyone to make that call from the City, and it is not accurate information because the City Council is not to that point yet. They just barely received the budget, and they will be going through it and talking with staff. Tonight staff will be presenting the tentative budget to the City Council and explaining the needs of the City. Mayor Evans then indicated they will be holding a budget work session on May 22nd at 4:00 p.m., and they will have a public hearing to adopt the final budget at 6:00 p.m. on June 12, 2012. The budget is posted on the City’s website, and staff can also help obtain copies for anyone who is interested. If the City Council decides at that point that a tax increase is necessary, there will be another public hearing on August 14th.

Mr. Chesnut advised the City will be holding many open houses and they will be meeting with the Neighborhood in Action committees to reach out to the various neighborhoods. They are just starting the budget process tonight, and they are not approving anything final that evening.

Mayor Evans stated the City Council will just be accepting what staff has prepared, and they will then have the opportunity to review and discuss it many times before they approve a final budget.

Clayton Swenson, resident, expressed concern about the street he lives on. The street is a mess and is falling apart. There is no curb or gutter, and there is an uncovered canal in front of his street. This is not the first time he has brought this issue to the Council’s attention. He has lived in his home for eight years, and it has always been a problem for him. The light at 1600 North to go northbound has a double turn lane to go onto a residential road, which is not a good idea. He asked the City Council to do something about the roadway.

Aaron Campbell, resident, indicated he is responsible for the robo call. He said he wanted to get the proposed tax increase out in the open now as the budget process begins. He said it is his understanding that they are going to increase City allocated property taxes by fifty percent, which is about $100 for a $200,000 home. They are also going to increase lighting and water fees. He noted he does not have a problem with the tax increase, but he wants it to be known that the City Council is thinking about it and he wants the public to be aware of it. He expressed concern that the people who are going to run for the Council and Mayor next year do not have his same ideas, and he does not agree with them. Mr. Campbell stated he told the City Council that if they raise taxes for things that are not necessities, people will be upset. Mr. Campbell voiced appreciation for Mayor Evans’ comments in the premeeting that the City needs to focus on the needs and priorities, which might mean the City has to cinch their belt. They do not need to be doing things that are not priorities.

Mayor Evans thanked Mr. Campbell for his comments. Mayor Evans then reiterated that there will be public hearings for the City Council to take public input, He invited the residents to call the City Council or email them with all of their concerns. The City Council and staff will be meeting with groups to get their input. They will hold as many meetings as possible.

Brandon Jeppson, resident, asked what dates the City Council will be discussing the budget.


Mayor Evans stated Mr. Chesnut will give those dates to those present. He also indicated that he started a blog in order to get information out to the residents. He lists all updated information on his blog as well and the City website.

Mr. Chesnut explained the budget work session will be May 22nd at 4:00 p.m., and the final budget public hearing will be June 12th at 6:00 p.m., and if the City Council moves forward with Truth in Taxation, that will take place on August 14th at 6:00 p.m.

Mrs. Street thanked the residents who came out tonight to discuss the budget. She expressed concern that when members of the community make a call for action such as this, they need to make sure that they are responsible and are giving out accurate information. There are a number of residents in attendance that are there because they are afraid something is going to happen or they are here because they do not have enough information. She stated all of the Councilmembers want the residents to have the information they need, and it is concerning that people make telephone calls to scare people into action without giving them accurate information. She thanked those in attendance and asked them not to feel that the City Council does not want to be there or that the City Council does not want the residents to know about the budget, because they do. The City Council wants the residents to have all of the accurate information, because they now have a tentative budget to work with.

Mrs. Black indicated another source of information is the City’s Facebook page. There is always information about the upcoming meetings, happenings in the city, and links to the agendas. That is a helpful Facebook page.

Jeremy Peterson, resident, voiced his concern about the safety of the street he lives on. It is a narrow road, and there is a lot of traffic. He asked the City Council to do what they can to make it safer. He noted 1600 North is wider and has two sidewalks, so if that went through it might help alleviate some of the problems on Hidden Hollow Drive.

Mr. Chesnut advised staff met with some of the neighbors in that area last week and discussed options to help mitigate their concerns.

Wayne Burr, resident, stated he has just returned to Orem from a long vacation. He voiced his concern about raising the taxes. He said he is happy to hear that there will be a lot more meetings to discuss this so the residents have a better understanding of what is going on. He noted he has lived in Orem all of his life, and a tax increase will be devastating to some Orem residents. He said he is opposed to raising taxes. If there is any place they can find to cut taxes somewhere else, he would like to do that. He also said the City needs to leave things to private enterprise as much as they can.

Dick Brunst, resident, expressed appreciation for the hard decision that the City Council is dealing with in terms of the finances for the City. He said for a long time he has felt that the City needs to raise taxes, The income has gone down because of sales tax decreases, and Orem is lower than the other cities in terms of property taxes and utility rates. It is important to keep the infrastructure good for the future residents and the children who live in Orem. However, he has a private business and his employees have not had a raise in three to four years, and he has taken a twenty-five percent pay cut to keep everything running within his own business. He is concerned about the creep of City salaries and suggested they have a committee look at the


salaries to see where they could make cuts. The top eighty-two people within the City government make a combined salary and benefit package of around $10 million. He reviewed the salary of six librarians and advised they make over $100,000. The main librarian has done a wonderful job, and he supports her very much; however, she makes $16,000 more than the Governor of Utah, $14,000 more than the Mayor of Salt Lake City, and $24,000 more than the chief librarian at the University of Utah. This information was obtained on the Utah’s Right To Know website. He suggested the City Council look at the top 100 earners within the City and see if there is room to take a 10 to 15 percent pay cut. He said he loves what is going on at the city, and he supports all of the wonderful people that are working here. However, if they are going to put taxes on the backs of the residents, it would be helpful to also look inward to see if there are other areas to save money. He expressed appreciation for all of the work staff and the Council does.

Bob Wright gave amounts for the various funds the City has in its bank accounts. He said the City is not suffering, and they do not need to raise taxes for the residents in order to keep afloat. He commended the City for the way they have handled things over the years in investing the money, but he thinks the City should use the money they invested to pay off the UTOPIA debt in order to get out of it. That way they will not have to pay principle and interest for forty years. He was informed that the City cannot do that because they signed the contract for forty years, but he thinks a judge would side with the City on this.

Michael Brooks, resident, thanked the City Council and staff for following up so quickly with the neighbors’ concerns about the safety of Hidden Hollow Drive. He stated the neighbors did come up with several temporary solutions. He said he is there to ask the City Council to follow up on the suggestions of the neighbors to make sure they are acted upon. He noted staff was concerned that closing the road at Hidden Hollow Drive would be an inconvenience to some people. He said he would not want the City to place this concern about inconvenience over the safety of the residents in that area.

Kristina Clark, resident, indicated she has lived in her home since Christmas, and she has seen a dog, a child, and herself almost get hit by vehicles. She said there will come a time when someone gets hurt or killed on that street. She thanked the City for the time and effort that they have already put into this concern.

Wayne Erwin, resident, stated he does not have a lot of problem with the taxation. He lives here and he is willing to pay his taxes. However, he is concerned with the UTOPIA issue. He said he understands the City already owns part of the unfinished Midtown Village, and now they want to become involved in something else that is a private affair. The City should not be involved in UTOPIA, and he hopes the City Council will keep that in mind and vote to stay out of private affairs and keep the City concerned with city affairs.

Judy Cox, resident, stated she lives at the bottom of Hidden Hollow Drive, and there are constantly vehicles parked on the street even though there is no parking allowed. The City put no parking signs up, and they were removed by some of the residents. Her son was almost hit because a vehicle was parked on the sidewalk and he has to walk in the street to go around it. She said the speeding vehicles are not the only problems with the street. There is also a concern with where the residents and their visitors are parking.


John Lockwood, resident, stated he has spent most of his career as a telecommunication specialist. He said he was excited when he first heard about UTOPIA, and he does believe that fiber should go to the homes. He said he would be happy to talk with the City and offer any of his expertise to help with negotiations or dealings to help them understand what is going on from an interested party. He does have concerns with the thirty-year bonding. He noted people change computers often because technology is outdated, and this is no different. He said he is also concerned with the install fee and a monthly fee, and he does not think it is right to have both. The install fee should be dropped. One thing that really bothered him was the Orem newsletter article on how wonderful UTOPIA would be and how great it was. Some of the Cities have dropped out of UTOPIA, be it right or wrong. He asked who continues to pay Layton’s fees.

Mr. Chesnut clarified that Layton pays their own fees. None of the cities have dropped out of UTOPIA. One city dropped out of UIA, but none have dropped out of UTOPIA. He invited Mr. Lockwood to come in and speak with staff about UTOPIA in order to get accurate information.

Mr. Lockwood indicated he would like to do that. He wondered if Comcast or other providers would have a tacked on fee. He said he needs to find out what the install fee was for Alpine School District and for all of the churches in northeast Orem. He said he used to have fiber to his office in Lindon through UTOPIA, and he did not pay anything for it other than the monthly fee. Now they are going to charge the homeowners for the connection. He sees lots of problems that might not have been looked at by the appropriate people.Mayor Evans stated they have a citizens committee they formed to help the City with UTOPIA issues. He said it might be helpful for Mr. Lockwood to come talk to them.

**Mrs. McCandless left the meeting at 6:57 p.m.

Melva Gifford, resident, said she would like to avoid money going after a bad decision and she asked the City Council to find any way they can to bail out of UTOPIA. She stated she likes the idea to pay things out of their savings in order to get out of debt.

Mark Fernland, resident, stated the only people who need faster speeds are the ones who use it for wireless video streaming and on line video games. In Alaska they have wireless broadcast throughout most of the state. They set up wireless points, and the State pays for wireless access as opposed to running a line directly to people’s houses. He suggested the City Council look into that as an option because digging up the streets causes traffic problems. He also noted that he noticed every time he tries to leave the City, going either east or west, he hits every red light even when there is not traffic coming the other direction. He asked the City to look at readjusting the timing of the lights. Mr. Fernland then asked whether the property taxes will be lowered once the UTOPIA bill is paid for.

Todd Seager, resident, noted he is a fiscal conservative, and he is discouraged by a lot of things that are happening in the country today. However, on the subject of UTOPIA, aside from the long-term bonding, he personally believes in UTOPIA. He works with many people in the technology industry around the country and in other parts of the world, and they are stunned with what he can do. UTOPIA has brought lower prices for the residents, and the problem he has is access to UTOPIA. He has used the other providers, but none of them can do what UTOPIA does because of the permanent connection. He said he uses UTOPIA for his business, and if he


did not have it, he would not be able to live in Orem. He said it is an essential service just like water and sewer. The Internet was not an essential service ten years ago, but it is now. It is becoming more important in the home, and it more critical for businesses that wish to reside in Orem. Businesses are primarily choosing to locate in cities that have UTOPIA.

Tom Hover, resident, said he is concerned with the conversations that evening. He said he is concerned about the increase in fees for utilities. He works for Utah Valley University as an administrator, and one things that he notices that the departments never seem to have a point where enough is enough. It was either use it or lose it and ask for more the next year. He said he saw a need to reallocate the available funds and spend them on realistic needs. He asked the City to not continue to tax people, especially during a downturn in the economy, and to take into account what the residents can afford.

Mayor Evans reiterated that the meeting tonight is not a budget public hearing. He apologized for the confusion. He clarified that the City Council has just received the tentative budget. They still start to review the budget, along with the residents, and will have public hearings where the residents can give their input. The City welcomes the dialogue and discussion as the process moved forward. He apologized again for any miscommunication that has occurred and ask Charlene Mackay CNS Manager, to let the people who came in late know the dates of the public hearings.

Mr. Campbell said he does not think that a $60 million budget is something they should discuss at one public hearing. He advised he sent the robo call out to the residents. He said he was very honest in what he said in his phone call. The City is planning to raise the property tax by fifty percent. He will be paying another $100 per year, which is fifty percent more than he is paying now. Even though the City Council has not read through the entire budget, the residents should be allowed to express their opinions about it.

Mayor Evans apologized to those present for the misinformation. The robo call was made illegally from a City number. His wife was concerned that this information was sent out from the City offices and he nor staff knew anything about it.

Mr. Campbell said he can use any phone in this building and make a call. Mayor Evans responded that there is not just one meeting where this will be discussed. They are going to be meeting with citizen groups and organizations about the budget. Tonight the City Council is receiving the tentative budget and now the process will begin. He stated he has allowed the residents to speak tonight about the budget. He just did not want people to feel like this was the primary purpose of the meeting tonight.

Mr. Campbell noted this is the beginning of a long process. He said he will not stop the robo calls. He will not use the Mayor’s number anymore. He will keep advising the residents of Orem. It is important that there is transparency in everything the City does. He stated he does not agree with everyone on the stand, but that is not important. It is important that every resident is informed as much as possible all of the time.

Mayor Evans stated that is correct, which is why the City is posting information daily about the city. They are trying to improve how they are doing things as a city and as a Council to let people know what is there. There is a process with this that the Council is trying to go through.


Mr. Campbell agreed and said he will help them in that process.

Kathryn Hardy, Colonial Heritage Foundation, invited those present to the Colonial Heritage Festival. It is a free event that will be held at the Scera Park on June 30 th and July 2-4th. She said it is a lot of fun.

Darrell Conrad, resident, said he cannot understand why they cannot come to a meeting to hear that there will be a decrease in the cost of living. He said he has been in business for fifty years. He has kept his costs down and has not increased his costs in fifty years. He advised he is tired of taxes and the cost of utilities.

James Murphy, resident, noted he has lived here for twenty-six years. He stated he has seen taxes go up in this country. There is a lot of waste. He said he does not know what this City Council will do, but if they are going to raise taxes, he might as well go buy a tent and find somewhere else to live because he cannot afford it. Right now, the amount of taxes he is paying is massive. He stated he will have to go south where he has 4,750 men that are well-armed who are fighting to keep people from coming across the border to take things. He said the City Council better keep it within means or they will have all of the people on their backs.

Tom Phelon, resident, advised the residents are all frustrated. He would like an entity to look at past taxes and see where the City has good intentions that have gone astray. The tax for the SCERA theater was a good thing, and the taxes that went for the Scera Shell is also good. However, he does not agree with the $585,000 that is going to the Hale Center Theater for the same tax. They put in new seats and carpet with the money they received, and they do not pay anyone there for their talent. He said they need to look at past taxes to determine if the money was spent where it was intended to go and whether it can be trimmed. The Council is up against a lot with the city. He commended the City Council for their integrity, their willingness to serve, and their willingness to work this out.

Van Gaffney, resident, said he has lived above Hidden Hollow Drive for twenty-seven years, and that road really needs attention. He indicated he voted for Mr. Andersen for Council because he agreed that this is a city and not a private enterprise. He said the Internet is such a volatile thing, and to invest in it is not good. UTOPIA is still not in his neighborhood. He said Orem is great. They have streetlights, sidewalks, and they can do something about Hidden Hollow. They just need to use Orem’s money for City stuff.

Dora Shoenfeld, resident, advised she has been an Orem resident for sixteen years. Her main concern is the projects that are being proposed that require an increase in taxes. She recently lost her employment. She is in her seventies and is facing living on a fixed income. She said if they do not have money for things such as UTOPIA and the Center for Story, then they should not be involved in them. She expressed her opposition to tearing up the front of the City Center building to construct the storytelling building. They need all the green they can get in the community. She also noted she is opposed to a salary increase for any employee this year. Mayor Evans reiterated that the City Council is very interested in receiving citizen input on any City items. He encouraged the residents to look at the tentative budget on the website. The City is looking at all of the options in regards to UTOPIA and are willing to listen to any suggestions. He expressed appreciation for those in attendance.


Mr. Seastrand indicated he looks forward to reviewing the budget that night. He noted he is a little surprised that after all of the conversations, rather than staying and trying to understand the budget, people are leaving. As much as everyone cares about the budget, tonight is the night people should stay to learn about the budget and see what is being proposed. He encouraged those that were leaving to stick around and indicated they might see some things about the budget that are surprising.

Gary Anderson, resident, stated the printed information on the agenda states the City Council will adopt the Fiscal Year 2012-2013 Tentative Budget and then they will set the public hearings. To his mind, that is a little backwards. If they are adopting the tentative budget, they have already made a decision. Greg Stephens, City Attorney, clarified that State law requires each City to adopt a tentative budget; however that can be changed. This is definitely not the final budget. The City Council cannot adopt a final budget until after holding the public hearings. This is the starting point in the budget process. By adopting the tentative budget, the City Council has something to work off of.

Mayor Evans agreed that it is confusing to use the word adopt; however, it is required by State law. Mayor Evans noted it is very helpful to go to the Executive Summary in the budget. It outlines the issues and concerns the City is facing right now.

Mr. Chesnut advised there are nine key issues they will be talking about later in the evening, so he invited everyone to stay to listen to the presentation.

CONSENT ITEMS

Mrs. Black moved to approve the following consent item. Mr. Seastrand seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.

RESOLUTION – Authorizing the Mayor to Sign an Interlocal Cooperation Agreement between Salt Lake County, Utah County, Orem City and the Unified Police Department for the Multi-agency Communications Intercept Program

SCHEDULED ITEMS

6:00 P.M. PUBLIC HEARINGORDINANCE - Amending Section 14-1-3 of the Orem City Code and the Sign Zone Map of the City of Orem, Utah, by Changing the Sign Zone From ‘D’ to ‘B’ for Property Located at Generally at 1500 East 800 North

Stanford Sainsbury presented an applicant request that the City Council, by ordinance, amend Section 14-1-3 of the Orem City Code and the Sign Zone Map of the City of Orem, Utah, from sign zone ‘D’ to sign zone ‘B’ for property located generally at 1500 East 800 North in the C2 zone. The applicant owns Will’s Canyon Pit Stop at the mouth of Provo Canyon. The current sign zone (D) does not allow a sign greater than a monument sign, which is six feet high and thirty-six square feet in area. However, a previous owner increased the size of the approved monument sign without City approval. When the new owner (the applicant) asked to replace the sign with similar square footage and height, the request was denied because of the size. The applicant requests their parcel


along with two adjacent other parcels be changed from sign zone ‘D’ to sign zone ‘B’. The original request was just for the Will’s property but after review, it made sense to include the adjacent commercial parcels.

The parcels affected by this request are Will’s (Faulkner), Mama Chu’s (Nicolson), and the parcel just north of Will’s (Bastian). Amending the sign zone will permit a sign on each parcel larger than six feet high and thirty-six square feet. Overall size will be determined by street frontage. Each of these parcels are also zoned C2. The Faulkner parcel and the Nicolson parcel are locations for retail commercial activity while the Bastian parcel is the location of a storage building. The surrounding commercial parcels have office uses and are zoned C1. The subject parcels are the only lots in the area that are zoned C2.

The sign code was amended around 1990, and removed pole signs as an option at this location. It should be noted that Will’s Canyon Pit Stop is the only gas/convenience store in the city that is not permitted a pole sign. The topography of the area, road alignment, and speed of traveling vehicles warrant a sign higher than a monument sign for enhanced visibility.

The following is the table used to determine the maximum square footage and height of a sign in zone ‘B’. Sign zone ‘D’ does not permit a pole sign but does permit a monument sign. Using the street frontage of each parcel in this request, a sign at the maximum height and square footage could be constructed on each lot. The applicant has no desire to construct a sign at the maximum height but it should be noted that the possibility exists.

Sign Zone "B" Street

Frontage(in feet)

Max. Sign Area(in sq. ft.)

Max.Height(in feet)

50 or less Frontage X (.4) + 60 1051 to 100 Frontage X (.4) + 60 15101 to 125 Frontage X 1.0 20126 to 150 Frontage X 1.0 21151 to 175 Frontage X 1.0 22176 to 200 Frontage X 1.0 23

201 to more Frontage X 1.0 24No sign in Zone "B" shall exceed 225 square feet in area.

Sign Zone "D"Freestanding pole signs are not permitted in the "D" zone.Freestanding monument signs are allowed.

Advantages: Better signage increases business Three parcels are affected Provides equal signage to similar businesses

Disadvantages: None identified

Holly Faulkner, applicant, stated they have owned the Will’s Canyon Pit Stop since 2005. In order to be competitive in this economy, they have decided to change from Texaco to Chevron


and wanted to update the sign to advertise that change. The sign they ordered is larger than the existing sign, and when they went to get a permit they were told it was not in conformance with the sign ordinance. She said they have the smallest sign of all of the gas stations, and they are just looking to be competitive with the other gas stations.

Mr. Sumner noted that is a busy intersection, and there have been some terrible accidents. He asked whether the sign will obstruct traffic in anyway. Mr. Sainsbury explained the traffic engineer will go out to the location before the sign is installed to make sure the clear vision area will not be obscured, if this application is approved. That is part of the permit process.

Mrs. Black asked why the third parcel was included in the request. That is a warehouse and she does not see a need for it to be included in the request. Mr. Sainsbury explained that was not part of the applicant’s request. All three lots are zoned C2, and they are allowed to have a pole sign anywhere else in the city.Mayor Evans clarified they could remove that parcel as part of the motion if the Council desired.

Ms. Faulkner stated they had a lot of customers sign the petition to allow this sign. The one person that lives on the hill above Mama Chu’s that will even be able to see the sign was willing to sign the petition.

Mayor Evans opened the public hearing.

Mark Fernlund, resident, stated he is a patron of Will’s Canyon Pit Stop. He said he has tried to turn left and right out of that parking lot and a larger sign would not help that situation.

Mrs. Faulkner noted the proposed sign is actually smaller than the sign that is there right now. It is slightly taller but narrower.

Mr. Sainsbury noted part of the process is to do a site survey and make sure the line of sight is not affected.

Kathy Bird, resident, agreed that monument signs are dangerous. She asked staff to be cautious when making this decision.

Tom Phelon, resident, asked whether they can limit the height of the sign. He said he is not opposed to the sign, but he would not want it to cause traffic problems.

Mr. Fernlund suggested the Council approve the sign and then they can decide placement once it goes to the permit process.

Mayor Evans closed the public hearing.

Mayor Evans commented that the City is currently looking at the sign ordinance to find a balance for the residents and the businesses.

Mrs. Street stated she likes to be consistent and does not like different rules for different groups. She would like the signage in the C2 zone to be consistent throughout the entire zone, and she said think ordinance accomplishes that.


Mrs. Street moved, by ordinance, to amend Section 14-1-3 of the Orem City Code and the Sign Zone Map of the City of Orem, Utah, from sign zone ‘D’ to sign zone ‘B’ for property located generally at 1500 East 800 North in the C2 zone. Mrs. Black seconded the motion.

Mr. Seastrand expressed appreciation for the comments about safety. He said if this is approved, staff will look at the sign and approval.

Mr. Sumner noted he is pro-business, but he has seen some terrible accidents at that intersection. He said he is putting his full confidence in staff to make sure the sign is safe.

Mayor Evans called for a vote. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Mark E. Seastrand, Mary Street, and Brent Sumner. The motion passed unanimously.

Mrs. McCandless returned to the meeting at 7:57 p.m.

RESOLUTION - Adopt the City of Orem Fiscal Year 2012-2013 Tentative Budget

Bruce Chesnut, City Manager, presented a staff recommendation that the City Council, by resolution, adopt the Fiscal Year 2012-2013 Tentative Budget and set public hearings to adopt the final budget on June 12, 2012, at 6:00 p.m. and August 14, 2012, at 6:00 p.m.

On May 8, 2012, the City Council will receive the tentative budget for Fiscal Year 2012-2013. A budget work session will be held for the City Council on Tuesday, May 22, 2012, at 4:00 p.m. in the Public Safety Building Training Room. The purpose of this item tonight is to accept the tentative budget and set public hearings for June 12, 2012, at 6:00 p.m. and August 14, 2012, at 6:00 p.m. to adopt the final budget for Fiscal Year 2012-2013.

Mr. Chesnut reviewed the process that the City Council will use in moving forward with the budget. He reiterated that this is the first step in the budget process and there will be opportunities for the public to voice their opinions and concerns over the City budget.

Mrs. Street advised she agrees with Mr. Seastrand’s earlier comments that it would have been nice for the residents that came to speak about the budget to have stayed to listen to this presentation and hear about the process. It is unfortunate that there was a call that appeared to be official communication that was misleading about what as actually going to happen that evening. She said that saddens her.

Mr. Chesnut reviewed the revenues with the City Council. He indicated budget cuts over the last four years include:

Personnel - $1,122,600 Operations - $1,224,500 Capital Projects - $1,367,400

o Total $3,714,500

There are some major issues that will be a part of this budget. They are as follows:


Issue 1 - Water Rateo Increase water rates to pay for Jordanelle water, In 1976, the Metropolitan Water

District of Orem signed an agreement with Center Utah Water Conservancy District for Jordanelle water for the benefit and use in the City of Orem. The increases will continue through 2017

o Cover increase in operation costso Proposed increase:

Increase the base rate for a ¾” meter from $12.66 to $13.07 This is $.25 for Jordanelle and $.16 for operations and maintenance Total monthly increase for ¾” meter is $.41

o All other meter size base rates will be increased proportionately

Issue 2 - Sewer Rate o Increase the sewer usage rate to cover increased operation costso Proposed increase:

The increase volume charge is from $1.39/1,000 to $1.42/1,000 gallons This will be approximately a $.39 increase per month for each connection

Issue 3 - Street Lighting Feeo It is the cities goal to have all enterprise funds be self-sustaining based on the

fees charged. The General Fund still contributes to the Street Lighting Fund. With this increase, the General Fund will still be contributing around $250,000 per year to the Street Lighting Fund

o Proposed increase: Implement a Street Lighting Operation and Maintenance fee of $2 per

month Staff will propose another $1 per month increase next year

Chris Tschirki, Public Works Director, noted in 2000 the City Council bonded for a Citywide Streetlighting Program. There was a $3.25 fee placed on the residents’ power bills to help pay for the costs for the streetlights. There was a graduated phase in for billing. In 2001, there was only 476 units billed. Today there are approximately 22,000 units billed. The City currently pays for the power to the streetlights. Rocky Mountain Power has advised that power costs will go up about 9.7 percent this year. There is an estimated need of $3 million to install the remaining 671 lights, which are going to be very challenging based on their locations, deep lots, and having to go through major street facilities. This is done through an enterprise fund; however, it is not self-supportive. Over the past five years, the City has subsidized this fund by paying approximately $585,000 per year. Part of the proposal this evening is to eliminate that subsidy. The City needs $3 per month; however, they are asking for $2 this year and they will ask the City Council to consider a $1 increase next year. Mr. Tschirki indicated it is the City’s plan to eliminate this fee after 17 years of paying for the fee. He is recommending they change the name of the fee to a Street Lighting Capital Improvement fee. He also suggested they modify the street lighting operations and maintenance fee on an as needed basis in the future to support the general operations and maintenance. The cost for power has gone up over the past 5 years, and will continue to go up. Staff is also looking at implementing a replacement fixture program to install LED lights throughout the city to help edge those costs. The potential savings there is upwards of 50 percent.Mr. Chesnut indicated the end date for the street lighting fee is 2018, so it will retire in five years.


Mr. Manning clarified that the street lighting fee will phase out in the same order it was implemented. It will take about four years to wind down, but everyone will be paying the same 17 years for this program.

Jamie Davidson, Assistant City Manager, recommended the City Council approve a reduction in the solid waste container fees.

Issue 4 - Residential Solid Waste Container Feeo There will be a reduction in the solid waste container fee from 10.60 per month

to $10.10 o Reduction in the recycling container fee from $3.55 per month to $3.05 per

montho Opt out recycling

The City is sending out a flyer to all of the customers to give them information about this program and what they need to do if they want to opt out of the program

Mrs. Street thanked Mr. Davidson for his presentation. She noted that earlier someone had asked whether the fees ever go down. She said it is nice to see that it is possible.

Issue 5 - Vehicle Replacement Programo Budget $600,000

Fleet wanted $1.6 million for replacement Issue 6 - Employee Compensation

o 2% market adjustment

Mr. Manning explained they looked at other entities to see what they had been doing with compensation. Utah County employees have received an average of 5.72 percent during the time that the City of Orem has frozen everything. The cost of living has changed 8.6 percent in that timeframe. Currently, the Utah County unemployment rate is 5.5 percent.

Mr. Sumner asked if there is an increase to the benefit package. Mr. Manning stated health insurance for the budget year overlap by six months. For the calendar year 2011-2012, there has been no increase in health insurance costs. This is almost unheard of. The employees have worked well in a new setup the City has entered into. The City does budget a four percent increase each year because they do not know what will happen. Medical inflation typically runs in the double digits. They feel fortunate that there was not an increase this year. The Utah Retirement System has increased their rates, and that is already built in to the budget.

Mr. Seastrand asked staff to discuss the compensation program and how it works. Mr. Manning explained the City uses a system called Hay International. They work with private and public organizations. They look at job descriptions and look at the geographic areas The Hay System makes their recommendations based on

Mr. Seastrand inquired whether there is a compatible study that compares private versus public jobs. Mr. Manning said it depends on the job. Of course the City Manager position is only a public position. However, engineers, clerks, and secretaries can be both public and private.


Mr. Seastrand said it seems that the Orem employees are very loyal to the City and stick around for a while. Mr. Manning replied the average age of the employees is forty-six, and employees do tend to stay at the City.

Mr. Seastrand then wondered whether the years of service affect the overall compensation. Mr. Manning explained it does to a degree; however, not as much as one would think. He then reviewed the midpoint program. The City has been told by the Hay group that they were not being as fair to the employees as they should based on what other cities were paying their employees.Mr. Seastrand then asked whether the City Council has control over an individual employees pay or just the pay system. Mr. Manning indicated it is set up so whatever is approved in the budget is then managed through the City Manager.

Mr. Seastrand commented that the City Council cannot go through and say that they need to pay any employee more or less. Mr. Chesnut clarified that the City Council can only do that with his salary.

Mr. Chesnut pointed out as they went through the Hay process this year, the Hay committee recommended a higher increase than two percent in order for the City to be competitive within the industry. However, Executive Staff felt comfortable presenting this number to the City Council for their consideration.

Issue 7 - Computer and Technology Upgradeso Budget $158,125 for computer and technology upgrades

Mr. Manning explained the budget process is very unique in Orem. As the Executive Staff looks at the needs versus the funds available, they will go around and make compromises in order to make the budget work. It is a case study in how a team ought to work together. They look at what is best and what will make the City of Orem work.

Issue 8 - General Fund Operational and Capital Improvement Needso Should the City proceed with Truth in Taxation procedure’s in order to address

the General Fund’s operational and capital improvement needs. The tentative budget includes a general property tax increase of $3,000,000 for operations and a judgment levy increase of approximately $350,000

Mr. Chesnut indicated the proposed property tax increase would mean an increase of approximately $8 per month for an average home in Orem. This decision will not be decided this evening. This will also not be decided in June. It will be brought to the City Council on August 14, 2012, as part of the Truth in Taxation process. This is included in the tentative budget, and if the City Council does not want to do this, the budget will then be cut back in order to balance the budget. Included in the General Fund obligations is the UTOPIA contract. That is no secret to anyone. The City has been paying that obligation and will continue to pay that as they honor their commitment in that process. He asked the City Council to keep in mind that staff is aggressively working to push that forward. As UTOPIA grows and becomes successful, that obligation decreases. It is part of the budget and their responsibility.


Issue 9 - Fees and Chargeso Exhibit B in the budget book

Mr. Chesnut displayed a chart that listed the various fees, including property taxes, charged by cities that are comparable to Orem. Orem currently charges the lowest fees of any of those cities. With the proposed adjustments in this tentative budget, including the proposed property tax increase, Orem would still be third from the bottom in terms of costs for service. He reiterated that property taxes have not been increased by the City of Orem since 1978. Many of the cities on the list are also looking at property tax increases.Mr. Seastrand noted Provo is implementing a monthly telecom fee of approximately $6 to help pay for iProvo. He asks whether that is shown in their fees. Mr. Chesnut replied it is not because that is part of their power bill. There are some fees that are not common among all of the cities, so that was not included. Orem has a street lighting fee as well, but that was not included because not every city has that fee.

Mr. Seastrand stated Orem has been a community that has benefitted significantly over the years from a higher than normal retail sales tax benefit because of the malls, State Street, etc. It is very apparent that the economy has affected the retail sales tax, which is down about $3 million. He recognized that part of the sales tax impact comes from the economy but another part is the Internet sales where sales tax does not come back to the community. He questioned whether the City sees sales tax revenues returning to where they were a few years

Mr. Manning explained City’s seek sales tax, and for a number of years, Orem was the star in Utah Valley as the place to shop. As the population has grown in northern Utah County, the stores that were once only in Orem have now opened in the north valley area. He stated he does not see Orem going back to those high numbers because of that.

Mr. Seastrand wondered whether anything is being done to mitigate the effects of the Internet sales not paying sales tax. Mr. Manning explained Orem does receive a fair amount of money via Internet sales. However, one of the largest retailers on the Internet does not charge sales tax. Brick and mortar businesses will probably always be the largest generators of sales tax for the cities.

Mr. Seastrand realized that the State has changed the way they allocate the sales tax collections based on population. He inquired whether that also affected the City. Mr. Manning responded the distribution of the one percent is based fifty percent on the point of sale and fifty percent on population. The latest census showed Orem’s numbers lower, so they are losing $40,000 a month based on population.

Mr. Seastrand asked whether the City has received an increase in the fuel taxes from the State to help cover the higher costs of fuel and maintenance. Mr. Manning replied fuel taxes are a set amount per gallon. As the price goes up, people start to curtail driving, so the City will get less.

Mr. Chesnut indicated they do not see a great fluctuation in the gas tax the City receives. The cost of oil does drive up the costs for operations.


Mr. Seastrand asked how they are making up the difference on the roads if the costs to maintain the roads has gone up, but the City has not received additional road fund revenue. Mr. Chesnut explained that it takes them longer to get to the improvements on the roads. They do not do as many overlays on the streets. The sidewalk replacement program has slowed down. They have a list of priorities, but it is a slow process to get them done.

Mr. Seastrand wondered whether they are able to maintain the roads at an adequate level with the funding they have, or are they stating to fall behind. Mr. Chesnut responded there is a greater need than they have money for. They do a very good job of generating the slurry seals and crack sealing, which is probably the best way to maintain and give life to the road. They try to get through the city every seven to eight years. However, they do not have the revenue to do overlays or reconstructions of streets or the infill of sidewalks. There is a long list of projects that they cannot get through as fast as they would like.

Mrs. McCandless stated the fees and charges list a change to the conditional use fee. She said she had asked staff to look at not requiring a conditional use fee for pool houses in the various PD zones because the City Council has to approve them if they meet the requirements. She said she does not want to charge someone an additional $400 for a conditional use fee if it is not necessary. Mr. Sainsbury stated the City Council eliminated many of the conditional uses a few years ago, and he is very supportive of removing even more of them.

Mrs. Street asked staff to put a link to the tentative budget on the City Website on the first page, so the residents can have easy access to it. Mrs. Street then thanked staff for all of the work that goes into putting this together. She said it would be nice if it were easy to say they do not want to raise the property tax. As they look at this proposed budget, and when they think about where they are today and where they are going in the future, they have some bigger picture questions to ask as a Council and a community. She thanked the residents that were still at the meeting. She asked those present to look at the bigger picture questions and think about how the City can deal with the decline in sales tax. She asked how the City moves forward based on these realities and how they can fund the shortfalls. If they understand how the system works, and if they look for solutions at a higher level of how to grow the economy and attract jobs to the city, they will get much further than if they argue over an $11 increase per month. If they do not look for solutions now, in the future they will be looking at a lot more than $11. She expressed her opinion that the City is in a fantastic spot and thanked staff for helping with that.

Mr. Seastrand noted earlier this evening there were comments that said the City has $40 million in bank accounts. Mr. Seastrand indicated he is looking in the budget and cannot see where that information came from. Mr. Manning clarified that at the end of April they had $30 million invested. That represents money they hold for developers that posted a bond, money set aside for debt service, etc. It fluctuates throughout the year, because the revenues does not come in twelve equal installments. It is very sporadic. If the City were to have a devastating earthquake, the residents would look to the City for help. That is the time the City needs the ability to marshal all of the forces they can to rebuild things, and that will take money. By having that money set aside, they are preparing for an eventuality none of them want to have happen.

Mr. Chesnut clarified that the money also includes the reserves they have set aside for water, sewer, and storm water. It is a combination of all of the funds.


Mr. Seastrand advised the State requires the City to have a certain amount of reserves. They limit the amount a City can hold. Mr. Chesnut stated that is correct. The City is closer to the minimum required balance now than the maximum.

Mr. Seastrand asked whether any of that money was available to help cover the operating costs. Mr. Manning stated not without taking reserves in other funds down to levels that staff does not think would be prudent. The UTOPIA debt is likened to co-signing on a child’s car loan. The bank would not allow someone to go in and say they wanted to pay down their percentage of a loan. The City of Orem is responsible for approximately twenty-one percent of the overall UTOIPA debt, and the bank will not let the City go in and pay their portion of the loan early because UTOPIA owns the debt. They could do that if it were the City’s debt.

Mr. Seastrand advised if/when UTOPIA is at a point that they can cover its own costs, the City’s obligation for that loan disappears. Mr. Manning stated yes, and they hope that comes sooner rather than later.

Mrs. Black expressed appreciation to staff for what they have accomplished. She said she was here during the last four years when that $4 million was cut from the budget. She has seen how painful it has been, but has also seen how the employees have worked together to determine the best use for the money that was available. She said it has been amazing to her. It is easy to look from the outside and say let’s do this to this, but it is very involved and is a definite process.

Mayor Evans advised two percent might seem like a lot; however, the City has good parks and roads because staff takes care of it for the residents. He stated the Council needs to look at the salaries and benefits, but he does the payroll for a large business in the area, and the Orem budget is small compared to what his company has to pay to keep people. It is so competitive right now, and he would love to take several City employees and hire them for his company because it is hard to find people that are qualified in the high tech industries. He expressed his appreciation to staff for their efforts to keep the City going.

Mr. Seastrand moved, by resolution, to adopt the Fiscal Year 2012-2013 Tentative Budget and set public hearings to adopt the final budget on June 12, 2012, at 6:00 p.m. and August 14, 2012, at 6:00 p.m. Mrs. Black seconded the motion.

Mr. Andersen indicated he is going to vote no. As he was campaigning, he saw this coming and he tried to tell people it was coming and now it is here. He had said he will never vote to raise taxes but would allow the residents to vote to raise their taxes. This proposed increase is over three times what the Alpine School District bond request was.

Mr. Sumner remarked this process is painful for Councilmembers, and he is open to suggestions from the residents. It is very easy to throw a few rocks, but if they have solid concrete ways to not increase fees or taxes, he is open to those suggestions.

Mr. Seastrand said it seems to him that the State requires the Council to adopt a tentative budget.

Mr. Stephens advised that is correct. They have to have something to discuss, something to put on the website, and something for people to comment on. They cannot really begin the process if they do not have a tentative budget.


Mr. Seastrand indicated that under Mr. Andersen’s assumption by saying he is not going to vote on this, the alternative is to say that he does not want the budget to be public or have it open for discussion.

Mrs. McCandless stated they have to have a budget to work with.

Mr. Seastrand questioned whether that abdicates their responsibility as elected officials to follow State law.

Mr. Stephens stated they have to adopt a tentative budget by law.

Mr. Chesnut noted it has to be done in the month of May.

Mayor Evans said staff could have come to the City Council with a budget where they slashed $3 million; however, this is their recommendation. The City Council is adopting it in order to review it, discuss it with the public, and receive input.

Mr. Andersen advised Mr. Seastrand is right, and when he saw this coming on December 26 th he sent all of the Councilmembers an email asking them to allow the residents to vote on this. The County said they could allow the residents to vote before April 15 th; however, now it is too late. He said he does not have an alternative position for him to vote on. This is not new to anyone on the stand. He said he is not trying to be irresponsible. He wanted a tentative budget which would have no tax increase or an increase that the residents voted on.

Mrs. McCandless agreed with Mr. Sumner’s comments. As she looks at this, the City has a shortfall in the budget this year. The City Council has to look for solutions such as cutting services, raising taxes, looking at fees, etc. She stated she is going to vote aye for this that evening; however, she is not approving a property tax increase. She is setting into motion an opportunity for the City Council and members of the public, residents that the Council represents because they voted for them, to have the opportunity to examine the options and to make a decision on June 12 as to whatever direction they wish to go. She sees in no way that adopting the tentative budget as being in favor of a property tax increase or approving a property tax increase.

Mayor Evans called for a vote. Those voting aye: Councilmembers Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner. Those voting nay: Hans Andersen. The motion carried with a majority vote of 6 to 1.

COMMUNICATION ITEMS

There were no comments on the communication items.

ADJOURNMENT

Mrs. McCandless moved to adjourn to a Redevelopment Agency meeting. Mrs. Street seconded the motion. Those voting aye: Councilmembers Hans Andersen, Margaret Black, Jim Evans, Karen A. McCandless, Mark E. Seastrand, Mary Street, and Brent Sumner.


The meeting adjourned at 9:36 p.m.

Donna R. Weaver, City Recorder

Approved: May 22, 2012


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