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DRAFT – Springville City Council, Budget Retreat, January 29, 2013 of 22

MINUTES OF THE BUDGET RETREAT OF THE CITY COUNCIL 2

OF THE CITY OF SPRINGVILLE, UTAH MULTIPURPOSE ROOM, 110 SOUTH MAIN STREET 4

JANUARY 29, 2013 – 2:00 P.M. 6

The following are the minutes of the Budget Retreat of the Springville City Council. The meeting was held on Tuesday, January 29, 2013 at 2:00 p.m. in the Springville City Civic 8 Center Multipurpose Room, 110 South Main Street, Springville, Utah. Adequate notice of this meeting, as required by law, was posted in the Civic Center and on the City’s website, and 10 delivered to members of the Council, media, and interested citizens.

12 Mayor Wilford W. Clyde presided. In addition to Mayor Clyde, the following were

present: Councilmember Rick Child, Councilmember Chris Creer, Councilmember Benjamin 14 Jolley, Councilmember Dean Olsen, Councilmember Mark Packard, City Administrator Troy Fitzgerald, Assistant City Administrator/City Attorney John Penrod, Assistant City 16 Administrator/Finance Director Bruce Riddle, and City Recorder Venla Gubler. Also present was: Administrative Services Manager Rod Oldroyd. 18 2:00 p.m. Welcome and Introduction 20

Mayor Clyde welcomed everyone and turned the time over to Administrator Fitzgerald at 2:02 p.m. Administrator Fitzgerald commented that he had finished reading a book that he feels 22 is applicable to today’s discussions. He gave a brief synopsis of the book and explained how he felt the subject was applicable to today’s discussion. He distributed maps of the Westfields near 24 400 South and 1750 East. He reported that the City is concerned about economic development. He pointed out on the map the properties owned by the Presiding Bishopric of the LDS Church, 26 those properties held by Suburban Land (also the LDS Church), those properties held by Property Reserve Inc. (PRI, also the LDS Church). He suggested that the LDS Church will have 28 a great impact on Springville’s future retail development. He reported that he had asked representatives from PRI to come and give the Council their perspective, and Boyer Company is 30 expected later. He noted that Boyer Company owns one parcel near the freeway that is surrounded by PRI. 32

2:05 p.m. Economic Development – PRI’s prospective 34

Mr. Daniel Wright thanked Administrator Fitzgerald for his introduction. He introduced his companion; Mr. Graham Larson. He reported that the LDS Church is a large landowner in the 36 City that is interested in the well-being of this community. He informed the Council that PRI is a 501(c)(3) or nonprofit holding company for the LDS Church. Surburban Land is a sister for-38 profit company that is able to develop. He explained PRI is responsible for providing the LDS Church’s rainy day fund by protecting land values and transitioning land from agriculture use to 40 urban use. Their constraints are that they are unable to develop or to subdivide. They can apply


for zoning changes, but cannot sell multiple parcels that are adjacent to each other within a five-year period. They cannot appear to be a developer. That is the purpose of Suburban Land—the 2 parcels are sold to Suburban and then developed.

Administrator Fitzgerald reported that Boyer looked at various configurations of parcels 4 for development potential, but a concern of the Council was that the development was focused west of 1750 West. If PRI cannot sell another adjoining parcel within five-years, there may be 6 restrictions on development for the east side of 1750 West. Mayor Clyde suggested the likelihood of development starting on the east side of 1750 West before the five-year restriction. 8 Councilmember Packard commented that PRI can sell multiple parcels to Suburban Land at the same time; there is just a restriction on selling other adjoining parcels for the next five-years. Mr. 10 Wright agreed. He explained that if five to ten-acres are needed for Kohl’s or Target, the co-tenancy prospects must be considered before transferring land to Suburban Land. They don’t 12 want to do a deal that starts the clock and restricts future development.

Mayor Clyde verified that the restriction is necessary to protect PRI’s nonprofit status. 14 Their purpose is to transition land for another use without appearing to be for-profit. He asked why larger areas of contiguous parcels could not be transferred to Suburban Land. Mr. Wright 16 replied that the LDS Church’s preference is to sell, and not to hold property for long periods. Their policy is to sell just enough for residential development to last five-years, and for a store’s 18 immediate needs for commercial development. Other tenants are encouraged to come later.

Mayor Clyde asked how PRI ended up with the middle parcel in this area of the 20 Westfields. Mr. Wright replied that there had been a different owner. He encouraged the Council to consider the long-term vision for this area, and work with PRI to end up with the right 22 combination of parcels. He asked if there were any questions so far. There was none.

Mr. Wright presented a slide showing retail centers that exist from Ogden to Santaquin. 24 He pointed out that there are two existing retail centers in Utah County—the Meadows in American Fork and University Mall in Orem that includes Costco. He reported that major retail 26 centers are spaced at about ten-miles. Spaced at five-miles between are smaller retail areas. In Utah County, these are Provo Towne Centre and Lindon. The next ten-mile spacing is 28 Springville or Spanish Fork, but incomes, population, and access affect development, too. He reported that Springville is 7.5 miles to University Mall, and Spanish Fork is 10.6-miles. There 30 must be a minimum base population of 100,000 to get a Target. He reported that all the cities in this area total a population of 80,000. He expects a major retail center to come to Springville or 32 Spanish Fork by the year 2020, possibly Springville and Spanish Fork.

Mr. Wright asked if the Council has seen the Woodbury map. The reply was no. 34 Administrator Fitzgerald reported that he could get a copy to the Council. Mr. Wright reported that a retail center typically has a major anchor. The options are a Kohl’s, or a Target. He 36 reported that a Lowes does not attract co-tenants, and Wal-Mart is already in Springville. He reported that Kohl’s has been presented both the Springville and Spanish Fork locations. They 38 have looked at both and indicated a preference for the Springville location, but Spanish Fork has offered a better deal. The Target previously chose Spanish Fork (before the recession), but there 40


are soils issues. Provo does not have any room for development outside of East Bay. He reported that other developers have been given information about Springville. However, it will be a huge 2 hit to the City’s development if Springville loses Target and Kohl’s. There are other uses—for instance, there is potential for an IHC Center, but there will be no retail. These are Springville’s 4 three best, and only, options for some time. PRI’s job is to dispose of and sell land. They don’t want to hold inefficient farming land. He assured the Council that PRI will work with the City to 6 sell the property.

Manager Oldroyd asked what Mr. Wright meant by his statement that Kohls’ has a better 8 deal in Spanish Fork. Mr. Wright replied that he does not have specifics, but the land is less costly. Administrator Fitzgerald reported that raw commercial land in Spanish Fork is $2-per-10 square-foot. In Springville, Boyer Company purchased their parcel for $12-per-square-foot and the Church is indicating a sale price of $8-per-square-foot. He noted that there are problems with 12 the Spanish Fork land in soils issues and visibility, but the cost is a draw.

Councilmember Olsen asked if there is a chance to draw in a Kohl’s store. Mr. Wright 14 replied that this is an existing anchor that would attract other retail co-tenants. He noted that Lowe’s does not attract others. The anchor store needs to be a destination, like a Home Depot or 16 a Wal-Mart. Councilmember Jolley noted that IHC owns land in the Westfields. This was confirmed. There was a discussion on if or when this development would take place. 18 Councilmember Jolley asked if there is any indication of a deal that would allow development by Woodbury. Mr. Wright replied that there is an option, but the property is still owned by IHC. 20 Mayor Clyde suggested that it may be in the City’s interest to buy out Boyer and deal with Woodbury. Mr. Wright commented that Woodbury is an aggressive planner, and may not put in 22 a development favorable to future development in Springville.

Administrator Fitzgerald reported that there have been planning variations over the last 24 years that have not come to fruition. He noted that Boyer had grand plans and an option on the Harward parcels in the area. The option was allowed to expire. The cost of land and the available 26 acreage was discussed. Mr. Wright indicated that PRI may consider selling a portion of their land as a “loss leader” to bring others in at a higher price. Administrator Fitzgerald pointed out that 28 the land in Springville already has some development completed at the City’s cost. Mayor Clyde commented that the biggest problem is that Boyer has so much invested in their parcel. There is a 30 risk that nothing will happen because of their investment return. Administrator Fitzgerald reported that Boyer had a development on University Parkway. They put in mid-sized boxes like 32 Old Navy and got out without generating significant dollars. They are in a difficult situation in Springville, but he would not like to see them do something similar. Mayor Clyde asked about 34 the price of the Wadsworth parcel. It was noted that the parcel is listed at $8-per-square-foot, but they are anxious to sell. 36

Mr. Wright encouraged the Council to be careful with mid-sized boxes, to look long-term, and increase the value. Councilmember Packard asked if the anchors are looking at the big 38 picture. He noted that Springville is being played against Spanish Fork because of the cost of the ground, but the Spanish Fork ground is near the old dump, has soils issues, and less visibility to 40


the freeway. Councilmember Jolley agreed. Administrator Fitzgerald observed that Spanish Fork is talking about making a push to connect this area to Springville’s 1600 South, which is slated 2 for a future interchange. Councilmember Olsen noted that Springville has this area in their annexation policy. Administrator Fitzgerald observed that Spanish Fork offered to exchange 4 property near the airport for this annexation area. Now, Springville knows the reason. He added that Spanish Fork is offering incentives that hurt their City, much like American Fork did for the 6 Meadows development. Springville has tried to avoid that situation.

Mr. Wright noted that the theater is looking at purchasing near the Costco in Spanish 8 Fork. Administrator Fitzgerald observed that Costco does not want a theater next to them because of parking issues. It would be interesting if this happens. There was a discussion about 10 the Orem Costco and the theaters that have built up around them. Councilmember Packard asked if the theater is considering the cost of ground an advantage. Mr. Wright replied yes and added 12 that access and population were also a factor. There was a discussion about Home Depot.

Mayor Clyde commented that these development companies can draw maps and do their 14 demographics, but all the communities south of Provo are bedroom communities that travel north to work and shop. They are in the habit of driving north and not south. He noted that these 16 residents will travel farther north to reach a destination, but residents living on the northern side will never drive south to reach a destination. He reported that he had tried to convince Costco of 18 this concept by pointing out that Springville has the top Wal-Mart in the state for sales because it draws from south Utah County. However, those in South Provo will not travel to Spanish Fork to 20 go to Costco. They will shop at Sams because of the perception of driving south. He also tried to convince Larry Miller. He suggested that the demographics may show Spanish Fork, but retail 22 will do better in Springville. He commented that he had been surprised by the announcement of a small Wal-Mart in Spanish Fork. Mr. Wright reported that Wal-Mart is decreasing their spacing 24 nationally and putting smaller stores in between their super Wal-Mart stores. He reported that a new smaller Wal-Mart is being planned for the Pleasant Grove exit, too. 26

Administrator Fitzgerald asked Mr. Wright what Springville City can do to facilitate retail development of PRI property. Mr. Wright replied that one support would be timely 28 information. He reported that PRI will sell for less if information is delivered soon enough that they could get approval in advance. Another is incentives. He agreed with Administrator 30 Fitzgerald that it would not be worthwhile to the City to give too much away, but the City can determine in advance what they are willing to do. If this information is available to PRI and the 32 developers, the incentives can help make a sale. He added that PRI is not “married” to Boyer, although they are in communication. They may consider a sale separate from Boyer if necessary. 34

Administrator Fitzgerald asked how the City can help build population west of the freeway. Mr. Wright agreed that this land is good for residential uses, but when he has brought it 36 up to homebuilders, they pass it by. He does not know what is going on, but the homebuilders just say that they don’t want to build in Springville. Some have expressed concern about working 38 with Springville City. Mr. Larsen reported that he has mentioned Springville in his discussions with builders, and they move on to the next available parcel. Administrator Fitzgerald observed 40


that this is the second time he has heard a mention about the difficulty of working with Springville. Councilmember Packard suggested that part of the problem with homebuilders is 2 that demand for homes is higher in the north end of Utah County. He believes that as the north county area fills, demand will shift to the south county area. He noted that mid-sized builders are 4 doing well here in Springville, and the demand will catch up. There is a quicker return in the north county area. 6

Mayor Clyde asked if PRI will sell on a contract. Mr. Wright replied that he is limited to tax parcels. If he can guarantee that a parcel will be taken, he can start a discussion on a contract 8 sale. There is a one-time take down—he can only move a parcel for sale to Suburban once, and Suburban is not a holding company. He pointed to the residential parcel near the ballfields 10 owned by Suburban, and noted that utilities are a challenge in this location. Administrator Fitzgerald replied that the utilities in this area are an impact fee project. He reported that he 12 would contact the developer.

Councilmember Jolley observed that Springville cannot ignore the fact that developers do 14 not want to work with Springville City. Mr. Wright agreed that it would be worth the conversation. Mayor Clyde observed that homes are more desirable in north Utah County 16 because of the access to Provo and Salt Lake for employment. There is a lot of demand in Lehi due to this fact. Springville needs to bring employment here to build population. Councilmember 18 Jolley suggested that Springville needs to stop comparing themselves to other cities and look at the internal causes of building contractors not choosing to build in Springville. The real reasons 20 need to be discovered. Mayor Clyde observed that some homebuilders feel that Springville City is difficult to work with. Mr. Wright reported that he has heard the same complaint. Manager 22 Oldroyd asked if the issue is impact fees, or ordinances and standards. Mayor Clyde replied that it is all of the above. 24

Administrator Fitzgerald commented that Springville’s impact fees are comparable to other cities, but Springville has a Power Department, so the total amount of impact fees are 26 higher. He added that City Councils of 10-years ago also set high standards. He informed the Council that this is the driving theme of this Budget Retreat. The Council has not turned away 28 from high standards since the policies were set in the 1990’s. Mayor Clyde pointed out that planter strips on both sides of a street are eight-feet-wide instead of a combination curb, gutter, 30 and sidewalk. Councilmember Packard suggested that Springville wants high standards. He added that if developers know the “rules of the game” in advance, they can do their analysis and 32 deal with the standards. He suggested that changes in mid-process are frustrating. Mayor Clyde reported that he had heard complaints that Springville’s planning department is difficult to deal 34 with. Councilmember Packard observed that he has heard this complaint about all cities. He feels that the information process would solve these complaints. 36

Councilmember Olsen asked what Spanish Fork is doing that Springville is not. Mr. Wright replied that Spanish Fork is dealing with Woodbury and not Boyer, the land base is lower 38 in Spanish Fork, and Spanish Fork gave everything away. He commented that Spanish Fork is obviously pushing hard for development. However, there are many entities to deal with in 40


Springville, but he is not sure Springville is pushing as hard. Mayor Clyde expressed surprise the Boyer let Woodbury “one-up” them since they have a lot of huge developments in the state. Mr. 2 Wright explained that huge developments have struggled during the recession. He also pointed out that Woodbury developed the two largest retail centers in Utah County, and so he feels they 4 have the pulse of Utah County. Boyer’s large developments are outside of Utah County.

Councilmember Olsen asked if precedent has now been set in Spanish Fork since they 6 have attracted the Costco. Mr. Wright replied that Kohl’s is still at issue, but timing will still be very important. Administrator Fitzgerald reported that Boyer is still trying to break-even on the 8 purchase of their parcel in Springville. He suggested that Springville cannot compete pricewise because of Boyer’s property cost. Mr. Wright reported that the nature of retail is that Springville 10 can compete with a blended price of $8-per-square-foot. PRI will come down for Kohl’s in this situation. Administrator Fitzgerald commented that Boyer may have to drop their price too. Mr. 12 Wright urged the City to let PRI know of any interest. He assured the Council that PRI wants to sell and not to hold onto farming property. He noted that the Church has welfare farms in 14 abundance. Director Riddle asked if PRI has comparable commercial property in other cities. Mr. Wright replied that the best freeway frontage is in Springville, although there is commercial 16 property in Saratoga Springs. He expressed appreciation to the Council for allowing him to come and talk to them about PRI’s investment in Springville. 18

Manager Oldroyd asked if it would be advantageous to Springville to encourage the Miller Theaters to come here. Mr. Wright replied that other retail development would encourage 20 the theater to come here. He reported that theater development likes parking lot traffic. He added that he is not saying don’t go after the theater; everything is still on the table. No contracts have 22 been signed, and anything available would be worth the effort. Mayor Clyde asked where IHC would go if they decide to sell their parcel. Mr. Wright replied that he is not sure; this is a good 24 location for them. They may go further south. He suggested that IHC is a good tenant to have in Springville and they tend to sustain high home values and commercial values. The Council 26 thanked Mr. Wright and Mr. Larsen for coming.

28 2:59 p.m. Economic Development – Boyer’s Perspective

Administrator Fitzgerald reported that Boyer would not make it to this meeting. They 30 have encountered two accidents on the way and have another meeting back in Salt Lake. He has asked them to come another time for a discussion with the Council. 32 3:00 p.m. Economic Development – Springville City (Troy Fitzgerald) 34

Administrator Fitzgerald suggested that Boyer has a difficult parcel to sell if they want to make money. The development will need to attract two large users at the same time. There has 36 only been interest from one large user at a time. He added that although Kohl’s is still “circling,” they have had a bad quarter. The City will need a second large user at the same time. Pad sites 38 for co-tenants will also need to sell for $12-per-square-foot as well.


Councilmember Jolley asked if the City can buy the parcel and be the developer. He asked if there are issues with the State if the City tried to take this approach. He suggested 2 offering $3.5 to $4 million to Boyer to sell out now. Councilmember Packard noted that Boyer has the contacts, not Springville. Councilmember Jolley replied that developers would be dealing 4 with the City and not Boyer. He suggested that the property may be worth investing in by the City. There was a discussion on how personal contact by City officials has been accepted by big 6 box developers, and breaking even in a marketplace that the City knows little to nothing about. Councilmember Jolley pointed out that if the City owns the parcel, incentives will be easier to 8 do. Attorney Penrod asked what Boyer, as the expert, says Springville needs to land Kohl’s. Administrator Fitzgerald replied that the City needs to incentivize Boyer so it lowers their 10 property cost for Kohl’s. He suggested that the Council needs to have a discussion about whether to buy a tenant. He asked if having a tenant there would generate more for the City in the long 12 run. He reported that by doing the math on sales tax, he has found that a Kohl’s store averages about $4 million a year or about $20,000 to the City. He suggested that the City should be careful 14 about saying yes to his question about buying a tenant.

Councilmember Packard commented that if the City could attract two players, other 16 businesses will follow. Administrator Fitzgerald replied that other businesses do not follow Costco or Wal-Mart. He pointed out that shoppers head home after shopping at these stores. 18 There is no incentive to locate near one of them. Councilmember Packard asked how much the other retail attached to Kohl’s would bring to the City in sales taxes. Councilmember Jolley felt 20 that Kohl’s could bring in 20 more stores—some retail, and some restaurant. Administrator Fitzgerald reported that the analysis for 1750 West shows that there are 50 to 60-acres that could 22 be shopping area. This would hold about four big-boxes, 12 pad stores/restaurants and midsize boxes. The total sales tax revenue is estimated at $1.5 million. He offered to make the 24 breakdown available to the Council.

Attorney Penrod asked what is being done to go after Kohl’s and Target now. 26 Administrator Fitzgerald replied that calling on the management offices for these chains had resulted in negative results in the past. He added that the City is staying in touch with Boyer, 28 Woodbury, and Wadsworth. He and Mayor Clyde have pushed these developers to bring their stores to Springville. So far, Spanish Fork has been the more attractive location. Mayor Clyde 30 reported that land is cheaper in Spanish Fork, but it is next to a dump, has alkali and other issues with the soil. He has pointed this out to these developers, as well as talked about the habit is 32 traveling north. Administrator Fitzgerald added that Provo also has issues with garbage dump land for the property they worked with Target on. 34

Administrator Fitzgerald asked the Council to read the Economic Development Plan for Springville that has been prepared. He distributed it to the Council. He asked them to read it and 36 bring their suggestions to him. He reported that he has seven bullet points that can be comprehensively pursued immediately. He commented that he feels strongly that the City needs 38 to pursue residential development within one mile of the commercial area. He hopes to see the new units at Aldara (a new multifamily residential development) under development first. 40


Springville needs demographics that support commercial development. Councilmember Olsen asked how impact fees affect residential development. Administrator Fitzgerald reported that 2 Springville’s impact fees are being updated. This process is underway and all of the impact fees will be addressed over the next few months. He added that the Council may want to consider a 4 review of the Westfields Overlay. He noted that basements are not allowed in the Westfields and this appears to significantly hamper development. The Westfields Overlay also sets high 6 standards for development that have long term implications.

Attorney Penrod reported that the LDS Church development standard (smart code) for 8 their property in the 1500 West area was designed to make their land more valuable, but there has been a dispute over building materials, specifically brick. Councilmember Packard 10 commented that their intent was to increase the density, narrow the road, and sell off the land. Administrator Fitzgerald observed that his impression has been that the Council wants to push 12 development at any cost. This smart code revision would be a sacrifice to current standards. He asked the Council if this is their intent. Mayor Clyde replied that he does not feel that 14 development is needed at any cost.

Councilmember Jolley reported that he has had three individuals living near him in the 16 Westfields pull him aside and say that they have heard that homebuilders are working with the City to change the Westfields Overlay away from brick and stucco. They stated that they wanted 18 the Overlay to stay so that builders cannot build substandard homes in their neighborhoods. Administrator Fitzgerald noted that the Crystal Springs and Pheasant Meadows Subdivisions 20 opted to stay with minimum standards and no increased density so the Westfields Overlay did not apply. If a subdivision developer wants greater density, the quality control of the Westfields 22 Overlay is applied. He added that these homes are being built down the road, but not right in Councilmember Jolley’s neighborhood. 24

Councilmember Packard restated that homeowners get frustrated when builders construct substandard homes in their neighborhoods, and builders get frustrated if standards are upheld. 26 However, if the standards are clearly defined, builders can make a decision to get involved early in their process and it reduces frustration. Administrator Fitzgerald observed that standards are 28 useful in land use planning, but not economic development. He reported that he had gone on a field trip in Springville’s Westfields with PRI and Suburban Land. They traveled through the 30 developments to see what was happening with the standards. He reported that there had been a pattern to developments, and that the decisions made affect development visibly over the long 32 term. He asked if the Council would like him to set up a similar field trip. Staff would be happy to point out what happens over time. 34

Administrator Fitzgerald read goal #2 from the Economic Development Plan, “Stay in close contact with large landowners in the commercial center concerning opportunities for retail 36 development.” He noted that there are only three to four large landowners. He addressed goal #3, “Ensure all infrastructure needs are met in the commercial center.” He reported that the 38 infrastructure in this area is complete with few exceptions—the storm drain along I-15 and the sewer on 1500 West. He noted that these two infrastructure issues are blocking development. He 40


suggested that the Council may want to consider debt-related funding to complete these large projects. 2

Administrator Fitzgerald read goal #4, “Contact potential tenants for existing openings in established retail buildings;” goal #5, “Encourage the strengthening of the Chamber of 4 Commerce through active participation;” goal #6, “Work with the Economic Development Committee to determine community interests in economic development and key target 6 businesses, and forward these recommendations to the Council;” and goal #7. “Develop a marketing plan to attract key target businesses that have been recommended by the Economic 8 Development Committee.” He asked the Council what needs to be changed.

Councilmember Packard observed that he likes the goals. However, his concern is the 10 quick turnaround needed with Boyer and any pending agreements in Spanish Fork. He would like the top priority to be a discussion with Boyer regarding the two top potential retailers. 12 Mayor Clyde agreed, but noted that if Springville attracted one, there may not be another ready to start for five-years. There was a discussion on Spanish Fork’s economic development director. 14

Administrator Fitzgerald observed that he plans to put the economic development plan on the City website. He asked the Council if there is something else that should be different. 16 Councilmember Jolley suggested that he believes the marketing plan is critical. He would move it up from #7. He added that this is what lets people know what is expected in the area. Mayor 18 Clyde suggested adding demographics that add selling points. For instance, Springville’s Wal-Mart is the top store in Utah. He added that he does not have actual dollars to support this claim, 20 but he had visited with the manager at a Chamber meeting and was told this information. There was a discussion of the size of the store and how it compares to others in the chain. 22

Councilmember Packard observed that he would like the City to pursue more retail, and in particular, pursue Kohl’s. Mayor Clyde commented that Spanish Fork has momentum. They 24 have attracted many stores to their two freeway exits. He reported that he feels Springville should talk to the theater guy at Miller and explain why Springville would be better than Spanish 26 Fork. Springville should have this conversation before a decision is made. Councilmember Packard agreed that the City should help Boyer along. Mayor Clyde agreed, and added that 28 Springville needs to get their story developed—the demographic story. He pointed out that Utah has more developers than Boyer and Woodbury. If Springville wants to make something happen, 30 they could go to the others with their “story.”

Administrator Fitzgerald noted that the “story” is moved to goal #1, and goal #2 is to 32 focus on Boyer. He asked about #7, the marketing plan. He also asked if there were other directions. Mayor Clyde suggested making a push for Ivory Homes in the Village Center area. 34 He suggested driving the developer around. Councilmember Packard suggested using the City’s influence to get the rail hub moved south to Springville as soon as possible. Administrator 36 Fitzgerald replied that he had talked to UTA. They are willing to work with Springville and start a rapid bus service to the Provo Transit Station. Mayor Clyde added that he had talked to a UTA 38 representative too. They assured him that the Springville station would be reviewed. Administrator Fitzgerald reported that the next round of financing is needed by UTA before they 40


can start in Springville. Mayor Clyde reported that UTA’s system was built on time and under budget, so they have the availability of funding more than any other urban transit authority. A 2 break was called.

4 3:45 p.m. Break Mayor Clyde called for a break at 3:42 p.m. 6 The meeting was reconvened at 4:05 p.m. 8 4:00 p.m. Recreation (John Penrod) Attorney Penrod noted that the subject of a recreation center was discussed at the last 10

retreat in September. He presented a quote from the minutes, “Mayor Clyde suggested letting the project sit for the summer and then reorganizing and get working on a layout, analysis, and 12 discussions with the school district.” He asked if the Council were still in a mind to work with the Nebo School District on making the old junior high school into a recreation center after the 14 new junior high school is built. Mayor Clyde observed that he is still interested. He suggested that the time to start negotiations is now. Attorney Penrod reported that the District is still 16 interested. Mayor Clyde reported that he had met with representatives of the District and raised the issue of the old junior high. The superintendent was not sure that to do with the old building. 18 He suggested that the building could be split with the District taking the north side and the City the south side with the main entrance, auditorium, and the rooms on that side. He had presented 20 this idea to the District. Attorney Penrod reported that the District plans to move the young mother program at Grant Elementary and the technical programs at the old Westside to the old 22 junior high. Mayor Clyde commented that the District remodeled the old Westside structure when they moved the District offices there. He added that the building is accessible to Main 24 Street. He suggested that the District may sell this structure.

Councilmember Packard asked if the City operates recreation programs from the junior 26 high. The reply was yes. Attorney Penrod reported that the City could expand their programs there. Mayor Clyde observed that the City would not buy the structure, but use the interlocal 28 agreement and control the operation of one side of the school. He suggested putting a gate on the main hallway and putting the recreation office there. The programs would operate out of the 30 rooms on that side. The lunchroom could be turned into a dance studio or used for other activities. The two shops could be used for community programs. The auditorium could be used 32 for events and for the Playhouse to put on their productions. The band room could be used to store costumes and scenery. The District has updated the locker rooms recently too. 34

Attorney Penrod asked what is wanted for a recreation center—what vision should be looked for. He presented a list of recreational offerings in Springville from private and public 36 entities. He suggested that there are a number of activities for residents offered both privately and publically; some are City programs. Administrator Fitzgerald commented that part of the 38 goals for recreation is to promote the right events. A discussion was held on money-making events held by private entities such as the Zombie Chase and the Dirty Dash. 40


Attorney Penrod presented a list of recreational opportunities that are offered near to Springville—within 10 to 30 minutes. He asked what the Council wants to accomplish with the 2 creation of a recreation center. He suggested that more recreational opportunities, to help fight drugs, to become a center for the community, a place for kids to “hang out,” to provide 4 entertainment, to promote healthy lifestyles, and to centralize recreation programs are a few of the goals, but he wonders if the community really realizes all the things that are happening in this 6 community.

Councilmember Jolley observed that Attorney Penrod has a good point. He asked how 8 much this fights against what the City already does. Administrator Fitzgerald asked if this is the reason 60-percent of the residents voted no against the recreation bond. Mayor Clyde attributed 10 the defeat of the bond to the dissemination of misinformation. Councilmember Creer commented that the main reason for the recreation center is to replace the pool. Mayor Clyde suggested that 12 the current pool can be re-skinned, the locker rooms upgraded, and an outdoor pool can be built across the creek. He reported that the current pool was planned for expansion to include a weight 14 room. He also suggested that Springville can quit taking care of south Utah County.

Attorney Penrod observed that the UV Rays always ask for more. He suggested that the 16 City could take over the swim program and make some money. Mayor Clyde commented that the City already has the Seals program. Attorney Penrod presented some options to address the 18 recreation center issue. He suggested that the City has six possibilities. They can do nothing and promote what the City already offers. They can upgrade the existing City and school facilities. 20 They can use the old junior high with or without swim facilities. The City can consider a public/private partnership. Another option is to create a redevelopment project in the downtown 22 area and include the recreation center. The final option is to incentivize private development. He added that there is also the possibility of using a combination of the above efforts. 24

The Council discussed the possibility of opening the high school gyms and putting money into the indoor track. Administrator Fitzgerald suggested a community recreation card to 26 get into classes or an open gym night. The card can help to cover costs or can be part of a larger program. Attorney Penrod suggested including private programs on the card, too. Mayor Clyde 28 asked about the use of elementary and junior high gyms. Administrator Fitzgerald reported that the City has an annual net credit under the interlocal agreement; just staffing needs will need to 30 be covered. Attorney Penrod suggested that the District may participate and put more money into their facilities. 32

Councilmember Olsen asked if the school district would sell the old junior high. Administrator Fitzgerald replied that they may consider a sale. Councilmember Olsen asked for 34 an estimate of a cost for the building. Administrator Fitzgerald replied $10 million, maybe? He added that the Superintendent may also divide the structure if the City would rather own. The 36 cost of a new competition pool was disclosed at about $7 million. Mayor Clyde reiterated the idea of renovating the current pool, putting in a walkway across the creek, and constructing an 38 outdoor pool on the baseball fields.


Administrator Fitzgerald observed that he likes this concept. He reported that the original plans for the current pool were a small recreation center with added building space on the north 2 side and an outdoor pool to the west. He added that the boiler was sized for both pools. Councilmember Child commented that the building has a moisture problem because of the plan 4 to expand to the north. The Council discussed the acoustical tile, trusses, and frozen doors of the current pool structure. Mayor Clyde suggested that the current structure could be removed and 6 the lot put into parking. The pool can be constructed in the baseball fields. There was a discussion about a negative attitude in town about putting the recreation center on the west side 8 of town.

Attorney Penrod explained about public/private partnerships. He noted the facility is built 10 by a private entity and leased to the City. Over a 20-year period, the lease is paid and the City owns the structure. He reported that Portland, Oregon and Lawrence, Kansas have posted a list of 12 projects for private/public partnership. The Council discussed how private/public partnerships work, and other successful private/public partnerships in Utah. 14

Mayor Clyde reported that doing a redevelopment project in the downtown area may result in more than a recreation center. There could be restaurants and a theater. Administrator 16 Fitzgerald observed that it could be similar to the Solomon Center in Ogden. Attorney Penrod asked what option the Council would prefer. Councilmember Packard reported that he is partial 18 to using what is available—working with the school. Councilmember Child asked if the City could put any money into a study of the possibilities at the junior high school. Councilmember 20 Packard commented that he would like to explore expanding the current pool. The Council discussed possibilities on the junior high school site and the current pool site. 22

Administrator Fitzgerald commented that there are enough ideas to give some direction to the committee and start a study. He commented that some dollars can be put into professional 24 help as well. The first focus will be on the old junior high. Councilmember Child suggested that the study focus on the old junior high as is, and give options with and without a pool. The second 26 choice is a rehabilitation or reconstruction of the current pool site. Administrator Fitzgerald commented that a standalone pool has the same cost wherever it is built. The site costs are the 28 ones that will be different. Councilmember Creer asked about staffing costs. The Council pointed out some of the differences in staffing that could be expected at each of the preferred sites. 30 Councilmember Creer suggested that it would cost the same money and be more efficient to use the interlocal agreement to gain public access to the high school gyms and weight rooms. 32

Attorney Penrod asked the Council what seems to be missing in the City recreation programs. He offered a list of ways that Springville could improve. He asked the Council to 34 review the list and let staff know if this is the right direction. The Council discussed the structure of the recreation department and funding for recreational activities. 36

4:30 p.m. The Budget Plan (Bruce Riddle) 38 Assistant Administrator/Finance Director Riddle presented the budget preparation

strategies and considerations. He commented that this is a general approach and focuses on 40


conservative forecasting and maintaining current service levels. This is the mindset going into preparing this budget. Not much will change unless the Council makes a decision to change it. 2 He reported that the economy is improving but no dramatic shifts are anticipated. Modest growth is anticipated. The emphasis is to maintain services. He asked the Council to let him know if they 4 find anything that needs to change direction.

Director Riddle commented that the Department Directors always want to improve their 6 area. The existing budget will be used as a base to move forward. Heavy justification will be needed for any enhanced service levels or additional programs. He presented the largest revenue 8 lines for the years since 2008. He reported that sales taxes are showing modest growth. Energy taxes are dependent on weather. Property taxes are increasing based on assessed values 10 returning.

Director Riddle suggested that inflationary fee increases would mitigate the need for 12 larger increases later. He understands the Council’s desire to hold fees, but inflation still must be accounted for. He noted that fee increases do not drive a lot of revenue, so the Council might 14 consider alternative revenue sources if these come with additional programs or enhanced services. He commented that other cities have increased property taxes for the cost of providing 16 general fund services, but this involves “truth in taxation” hearings. He reported that a one-percent increase relates to $27,000 in revenue. He suggested that another revenue source could 18 be a Recreation, Arts, Parks (RAP) tax. This tax was defeated once, but it may be passed if voters feel that more funding is needed for recreation. 20

The final possibility for a revenue increase is an increase in the transfer rate from the enterprise funds. Mayor Clyde reported that Mayor Curtis of Provo told him that their transfer 22 rate is eleven-percent. Director Riddle commented that the rate is actually higher than that. Councilmember Jolley asked if the rate is the same across all of the enterprise funds. Director 24 Riddle replied no, a select few are higher than others. He reported that power and water are both more than Springville transfers. Mayor Clyde commented that Provo has relatively low costs for 26 their enterprises. The Council discussed other revenue sources as presented in the recreation center discussion, including private/public partnerships. 28

Director Riddle addressed strategies and considerations for expenditures. He reported that there is a mandated retirement increase that totals $150,000 for all employees. Another 30 consideration is the approved funding of Fire/EMS staffing. He reported that issues to address are ways to minimize benefit package decreases, and address pay increases according to policy. 32 The only positions that will be considered for funding are those that result in a net cost savings, or that improve efficiency and productivity. There will be an effort to increase recreation funding 34 and to fund Council-requested projects. Other strategies included: continue funding vehicle and equipment replacement and major facility maintenance sinking funds; increase effort to fund 36 prioritized capital projects; maintain current service levels; and to maintain current funding levels and require justification from departments for proposed increases. Director Riddle 38 commented that operating cost increases for next year’s budget are estimated from $500,000 to $700,000. He noted that some dollars have been saved to the fund balance on CIP projects. 40


Director Riddle directed attention to the enterprise funds. He suggested that the Council consider inflationary fee increases. He presented increases since 2009 for the Council’s review. 2 He reported that nothing significant is expected to change in the enterprise fund revenues. He turned to enterprise fund expenditures. The plan is to maintain and hold to current service levels. 4 Any new positions that may be requested will be analyzed to see if the proposal results in net savings or improved efficiency. 6

Director Riddle suggested that the Council may consider debt financing for capital improvements at the golf course. He commented that the economic downturn has made it 8 difficult for golf in general and Springville’s Hobble Creek Golf Course has been fortunate to remain revenue positive over the last few years. He added that there will be a change in the lease 10 for golf carts this year as the current lease is expiring. He reported that the golf course management is focusing on ways to market the course this year. The City has ignored capital 12 improvements at the course for some years and attention must be given to a solution on how to infuse some renovations there. 14

Director Riddle reported that the next big issue to address is solid waste. This issue is being driven by the South Utah Valley Solid Waste District. There are proposed costs that will 16 need to be covered and a combination of changes needed. One is the transition into recycling by the City. Another is to decide what to do about composting. Director Riddle reported that the 18 Water Fund will also see changes as the City starts on the implementation of a secondary water service. He noted that these issues will be the focus while he begins preparing operating budgets. 20 He asked the Council to let staff know if they are out of step with the goals and objectives of the Council in the preparation of the budget. 22

Administrator Fitzgerald thanked the Council for listening to this blueprint for moving forward on the budget. He reported that staff would come back in April with the “score card” and 24 recommendations for budget projects. He commented that this memo and the lists of priorities are different from years ago and require different approaches. He asked the Council to review the 26 memo and let him know if staff is approaching the priorities from the right direction.

28 5:30 p.m. DINNER BREAK The meeting was closed temporarily for a dinner break at 5:23 p.m. The meeting was 30

reconvened after dinner at 5:57 p.m. Councilmember Packard was excused. 32 5:57 p.m. Springville City Dashboard (Troy Fitzgerald) Administrator Fitzgerald commented that he was excited about this discussion and he 34

hoped to get some good direction from the Council. He explained that marketers track buying habits of customers (turning right in the store, impulse buys at eye level, etc.). He reported that 36 Springville has the basic services that citizens want, but other entities are making money from Springville residents by providing alternative recreational opportunities. The City’s new 38 Museum Director says they have no data on who is walking through their doors, so she is now collecting data. He asserted that today’s market is more than just providing the basics, it is 40


providing targeted services. He reported on the data that Target collects and uses to bring customers to their stores and website. He noted that Target determines real time coupons by that 2 data collected from their shoppers.

Administrator Fitzgerald observed that the City does not invest in data like Target, but 4 there is pertinent information available. He offered some specific examples by displaying the “Springville City Dashboard.” He pointed out how the dashboard incorporates key objectives. He 6 asked the Council to let him know if he was headed in the right direction with the dashboard. He commented that it has been a challenge to think broadly enough, and he is aware that not 8 everything can or will be captured. He suggested that habits are powerful. For instance, he reported that the strategies and goals for the Power Department were established in the 90’s. He 10 displayed the current goal sheet for the Power Department. He pointed out that their goal to provide a “reliable” system was set when outages were common. He noted that the national 12 average for Region 1 of the American Public Power Association “System Average Interruption Duration Index” (SAIDI) is 23.97. Springville’s current SAIDI rating is 4.32. He commented 14 that Springville’s rating is way above average, and this high rating is coming at a huge cost. He asserted that the cost benefit analysis of this goal is way overdone, and yet it remains as a 16 priority goal. However, the Customer Average Interruption Duration Index (CAIDI) index has not been tracked and Springville’s average (181.68) is much more than the national average 18 (67.38). The reason for this disparity is that, despite city policy, line crew members have been allowed to move outside of the response distance. 20

Administrator Fitzgerald handed out “Springville City Key Objectives and Strategies.” He suggested that basic data tells a lot about what is going on in the City. He asked the Council 22 to review the objectives for each department and see if this is what the Council wants staff focused on for the coming year. He added that we also want to make sure that the budgets 24 submitted are in line with these goals. He asked the Council to turn to Art City Days. He reported that Mayor Mangum asked staff to work to grow Art City Days into the premiere event of the 26 county, and change the focus of the event to the arts, like “Swiss Days.” He noted that this is still a departmental goal as a holdover from Mayor Mangum. He does not want to derail or change 28 this goal if the Council still wants this change to be the focus, but he wants to make sure of the Council’s intent. Mayor Clyde observed that he is not as interested in growing the festival, but in 30 improving the quality. Administrator Fitzgerald noted that this is perfect feedback and indicates a different focus. 32

Administrator Fitzgerald returned to the dashboard and reported that this is a broader view than the view taken by the individual departments. He asked what targets the Council 34 would like to see added. He noted that the dashboard concept has been around for a long time, and is commonly used by large cities. The use of a dashboard is spreading. Michigan has now 36 mandated the use of a dashboard for all cities in that state. He plans to update Springville’s dashboard quarterly. The dashboard shows progress towards targets that are important to 38 citizens.


Administrator Fitzgerald noted that reserves are currently capped at 18% so the City cannot go over this percentage in the General Fund, but the debt burden is moving down. He 2 asked if the Council would like to set a target for the debt burden. Mayor Clyde commented that it would be interesting to see where the debt burden can legally go. Administrator Fitzgerald 4 commented that the maximum debt allowable is different than a focus on reducing debt burden. He asked which goal the Council would like to see. Councilmember Olsen commented that he 6 would like to bring the citizen debt burden down. Administrator Fitzgerald reported that the 2010 library bond raised the citizen debt burden. Mayor Clyde observed that the debt burden is now at 8 about $1,200 per person. He remembered when the bond election for the recreation center was being held and some people said the debt was too high. He asked, “What is too high? What 10 should the debt level be?” He commented that for some people millions seem like a huge number—and it can be on a personal level. However, for a business, that is not the case. 12

Councilmember Jolley asked if the debt is per household or per person. Administrator Fitzgerald noted that the number presented is per person. Mayor Clyde suggested that the state 14 has a bonding limit, so the City could stay within a certain percent. Councilmember Olsen observed that he feels that a number per household would be a better representation. Mayor 16 Clyde asked the number in an average household in Springville. The reply was 3 or 4. Director Riddle commented that it would be helpful for him to know the Council’s objective on debt. He 18 asked if the Council wanted to reduce the debt level, to maintain an acceptable level, to not to exceed a certain level. He will know then whether to not to propose debt financing to achieve a 20 priority project completion, or whether there is debt aversion. Councilmember Olsen asked if reducing debt will affect service levels and expansion possibilities. The reply was yes. 22 Administrator Fitzgerald reported that the sprinkler replacement on the back nine at the golf course may never get done without debt financing. This project has been put off for years as the 24 project savings never quite reach the construction estimates.

Councilmember Olsen asked what would be an “acceptable” level of debt. Mayor Clyde 26 observed that he was hesitant to suggest a level because there are some things that he would be willing to go into debt for and others that he would not. Councilmember Olsen asked if 28 Springville’s debt ratio could be compared to other cities in the state. Administrator Fitzgerald replied that he would try to narrow down the category by comparing Springville to other 30 communities, and state or national averages. He would bring this issue back with the information for more discussion. 32

Mayor Clyde asked how other communities use the dashboard and department goals. Attorney Penrod replied that the information is put on the webpage. Administrator Fitzgerald 34 added that the department goals are put in the budget document. He anticipates a goal sheet for each division since each has its own budget section. The purpose is to inform the public about 36 the value they are getting for their tax dollars. Councilmember Olsen asked if the City is getting questioned about how they are doing financially. Administrator Fitzgerald replied no; the goals 38 are primarily for the budget, but they do provide fantastic conversation pieces and can be used in the newsletter. 40


Mayor Clyde pointed out the line on the dashboard showing the percentage of property crimes versus the state average. He commented that Springville is getting closer and closer to the 2 state average. Councilmember Olsen asked, “What are the state averages?” Administrator Fitzgerald commented that Springville has held steady at 29 crimes per thousand in population, 4 but the state average is dropping. He suggested that this dashboard item tells citizens very little when it should be telling them that relatively few cities have a higher property crime rate than 6 Springville. Mayor Clyde noted that Springville is still below the state average, but does this justify the Chief of Police asking for more officers? Administrator Fitzgerald replied that 8 Spanish Fork has less officers than Springville. He reported that Chief Finlayson is already making changes. The Department has focused on traffic enforcement, and although it is working 10 and traffic accidents are doing down, it may be argued that it has come at the expense of property crimes. This detail was very enlightening, and Chief Finlayson is already working on 12 reassignments.

(Councilmember Packard returned at 6:32 p.m.) 14 Administrator Fitzgerald asked if the Council sees any targets that should be set. He

commented that the perception of residents as reported in the biennial survey reports that 16 neighborhoods feel safe. He asked if there were other goals or targets to write in here. Mayor Clyde replied that it seems easier to have Chief Finlayson set the targets. He would hate to set a 18 target and find that it is unrealistic. He commented that the Council can say “do better” or “doing okay.” 20

Administrator Fitzgerald asked the Council to review the rest of the targets. He noted that Springville is moving in a positive direction on recreational opportunities. He suggested that 22 residents are becoming aware of the number of programs in town. Councilmember Olsen asked where the information is coming from. Administrator Fitzgerald replied that the information 24 comes from the citizen survey. The next survey is due this September. Mayor Clyde suggested a target of 5.5 on overall quality, a 5 on rating of city services, and a 3.5 or 4 on perception of tax 26 dollars being spent wisely. Administrator Fitzgerald commented that if these targets are left in this format, small movements in the target range equate to hundreds or thousands of people 28 changing their minds.

Mayor Clyde asked about the availability of options when asking how to improve a 30 perception in the survey. Administrator Fitzgerald replied that a survey taker has seven choices for each question—4 is just average, 5 good, and 6 very good. Councilmember Olsen asked if the 32 targets for public safety are from the survey, too. Administrator Fitzgerald replied that the perception questions are from the survey. The last target is from internal data. He added that each 34 department can have their own dashboard with more data. He noted that the next page is taken from Michigan’s dashboard. He reported that a dashboard normally has dollars per capita 36 devoted to arts and recreation. He has tried to separate these divisions. He noted that the per capita amount committed to recreation in Springville is about $30, but Spanish Fork devotes $46 38 per capita just on recreation.


Mayor Clyde asked if special events are included in recreation. Administrator Fitzgerald replied that he has included all parks, recreation, pool, senior citizens, and Art City Days budget 2 lines to this target. Spanish Fork includes the seniors, pool, arts commission and Fiesta Days. Springville also has the Museum and Arts Commission separated into Arts and Culture. He 4 reported that the same amount is spent by both cities; it is just allocated differently. Mayor Clyde observed that he always gets approached by those who say Springville spends too much on the 6 Museum. Councilmember Olsen asked if Springville could use more volunteers for recreation and other items to offset expenses. It was noted that Spanish Fork uses volunteers for recreation, 8 too.

Administrator Fitzgerald observed that he has not included the rodeo grounds, so there 10 may be a question on what special events to include in “recreation.” He also noted that he can find national data to do a comparison. He can also break out individual events separately. 12 Councilmember Olsen commented that it would be nice to see the events individually. Mayor Clyde observed that some events are dependent on the revenues. Administrator Fitzgerald replied 14 that he could also gather data on net revenues. Councilmember Jolley suggested separating the arts and the Museum. He added that he likes parks and recreation and then arts and culture. 16 Attorney Penrod commented that Springville could investigate programs that bring in more revenue for recreation, such as possibly taking over the Playhouse and adding children’s 18 programs for theater. Mayor Clyde requested more comparison with other communities. He would also like to see Pleasant Grove and Payson. Administrator Fitzgerald reported that there is 20 a state initiative to share data, but local data is still hard to get. He would try to find the data requested. Mayor Clyde commented that the data is interesting. He observed that he still hears 22 people complain about the lack of recreational opportunities. Maybe this data could be used to help pass a RAP tax. 24

Councilmember Jolley asked if this is the full dashboard. He observed that there seems to be stuff missing. Administrator Fitzgerald replied that this is the reason for this discussion. He 26 added that dashboards tend to be compact so they are not overwhelming, but if there is a glaring omission, he would add to it. He reported that the acres of parks and the standard per thousand of 28 population is included in the Springville General Plan. He noted that Springville meets the national standard, but the data has provided for interesting discussion. He reported that library 30 circulation grew when the new library opened, but has flattened since. The target addressing maintenance of streets shows that maintenance is happening more often. He suggested that he 32 feels that the target should show the remaining service life instead of the last maintenance. He commented that it is a philosophical difference, but the current target is an accepted engineering 34 standard.

Administrator Fitzgerald observed that the next section of the dashboard is on enterprise 36 rates. He noted that the first three are steadily coming down, while the next three are coming up. He noted that Springville’s power rates are less than $1 higher per customer per year than Rocky 38 Mountain Power. However, he has based the comparison as an average of the immediate marketplace (Mapleton, Provo, and Spanish Fork). Commercial power rates are higher than the 40


immediate marketplace. He noted that the residential water rate looks great in comparison when looking at the average user. He reported that Mapleton is higher and Provo is lower. He 2 reminded the Council that their target for the amount of reserves in the enterprise funds as a percentage of gross revenues was set at 20-percent. He again noted that this measure does not 4 give a clear picture of the status of the fund, but it does show that reserves are building. He asked if the Council wanted to change this target. Mayor Clyde observed that he feels the current 6 reserves are high at 42.7-percent and suggested bringing them down to 20 to 25-percent. Councilmember Jolley disagreed. He noted that the total of these reserves is not “unrestricted.” 8 The Power Fund, especially, has the possibility of catastrophic costs when replacing a substation, for instance. He declared that the Power Fund needs to have at least 40-percent in order to have 10 enough in reserve to stand a major loss and replacement. However, now that the Power Fund has achieved the target of 40-percent, more does not have to be put away. He reported that the 40-12 pecent was derived from the amount needed to continue operations for 90-days without revenue. Administrator Fitzgerald reported that bond covenants commonly require enough reserves to 14 continue operations for 90 to 120 days, or 25 to 22-percent.

Councilmember Packard asked if the City should consider reducing power rates since the 16 fund has sufficient reserves. Councilmember Jolley replied that he would hesitate to decrease rates. He suggested that it would only be a matter of time until the rates are increased again, and 18 citizens will remember the last time rates were increased. Administrator Fitzgerald suggested a more needed discussion would be on the assignment of rates to the differing rate classifications. 20 He reported that increases since 2000 have been to just a few cents to each rate classification. No study has been done to analyze the actual costs of providing that service to that particular rate 22 classification. Mayor Clyde commented that the commercial rate should not be reduced without reducing the residential rates. Right now the costs are evenly distributed between the rate classes. 24 He suggested that rather than reducing rates, the Council consider increasing transfers to fund a recreation center. He noted that Provo’s transfer rate from their electric fund is eleven-percent. 26

Administrator Fitzgerald suggested that as the City moves forward and the Council considers rate increases, they do not raise rates “across the board.” He noted that it has been a 28 10-year process to get residential rates competitive. The commercial rate is still not competitive, as noted by many businesses. He reported that businesses commonly ask why Springville’s 30 power rates are higher. He asked for direction on the targets for enterprise efficiency, and or changes in the analysis for the dashboard. Mayor Clyde replied that he was okay with the 32 grouping. He noted that Springville’s residential rate is closing in on the rates in neighboring communities. Administrator Fitzgerald reported that Provo has approved a rate increase of five-34 percent that will take effect on July 1. Councilmember Child commented that Springville has held their rates while everyone else has raised their rates. 36

Councilmember Packard suggested that if Springville’s wish is to be competitive, they should consider a nominal decrease in the rates. Mayor Clyde observed that if Springville wants 38 to recruit businesses for economic development, reducing rates might be considered. Councilmember Jolley asked what reducing the rates would do cost-wise to the power enterprise 40


fund. Administrator Fitzgerald replied that a one-percent reduction would reduce revenues by $80,000. 2

Mayor Clyde observed that the power market changes quickly. Administrator Fitzgerald reported that Spanish Fork still has a “power cost adjustment” or PCA implemented. 4 Councilmember Olsen asked where Spanish Fork purchases their power. The reply was that Spanish Fork is a member of Utah Municipal Power Agency (UMPA). Administrator Fitzgerald 6 commented that Springville has a fuel factor in the power rates. It is not implemented, but the factor could protect the City in a sudden jump of the market. Mayor Clyde asked how far out a 8 fuel commitment could be purchased. Councilmember Jolley replied that staff is looking into five-year fuel hedging for the Whitehead facility. Mayor Clyde suggested that given the volatility 10 and risk of the power market, he would like to see how far out a price could be set.

Administrator Fitzgerald reported that Springville’s staff is focusing on liability and rate 12 stability. Rates have changed little since 2003. He explained that staff is managing to a budget number and gives the City a stacked resource delivery. Power has not asked for rate increases, 14 but is not doing much to drive costs down. He is not sure how much more profit is being left on the table. He reported that staff wants to purchase forward fuel and hard assets, but they are not 16 overly aggressive and trying to drive costs down. Mayor Clyde asked about locking up fuel contracts for five-years. Administrator Fitzgerald reported that the Power Board recommends 18 buying gas wells. The Council discussed the advisability of purchasing gas-producing wells. Mayor Clyde offered a recap of the purchase of the Craig-Mona transmission line. 20

Councilmember Jolley commented that Utah Associated Municipal Power Systems (UAMPS) is still driving the availability of resources. The Power Board welcomes their input, 22 but is looking at other options. He suggested that the Board feels Springville needs to be finding their own power solutions. Administrator Fitzgerald commented that he is glad the City decided 24 not to purchase an equity solution in the Minersville methane production and instead went with a power purchase agreement for the output. The output is now nine-months late. Councilmember 26 Packard commented that Springville does need to search out long-term solutions so that the City does not get caught short on resources and have to purchase on a volatile market. Administrator 28 Fitzgerald agreed. He listed some of the issues (contract expirations, growth, etc.) that can be foreseen and reported that firm replacement contracts are being explored. Mayor Clyde 30 commented that coal projects were a long-term solution, but EPA requirements are shutting down coal-fired plants and they are not being replaced. The west is building gas-fired plants and 32 hoping to wheel the output to areas where they can get a better price, but the grid needs more investment. Brownouts, particularly in the east, are being forecasted. 34

Administrator Fitzgerald asked about targets for these measures on the dashboard. Councilmember Jolley commented that reserves are a function of the enterprise fund. He 36 believes that 40-percent makes sense for the power fund, but he does not know about water. Mayor Clyde suggested an analysis on the age of the pipelines and tanks. Administrator 38 Fitzgerald observed that if the Council is comfortable with more than 20-percent, he can research and suggest some targets. Mayor Clyde suggested an assessment of the risks, type of capital 40


projects and costs, stable contracts and markets, the age of the system, and some reserve to offset a quick cost increase. He commented that the City should not carry a cost increase for long, but 2 he would consider covering a spike in costs of 10-percent that last six months.

Administrator Fitzgerald reported that Springville’s power system is designed for an “n-4 1” scenario—the City can lose one critical part and see no change in service. He added that Rocky Mountain Power runs their system closer to the line—they accept voltage drops and 6 brownouts in order to keep costs down. He informed the Council that Rocky Mountain lost a transformer in Spanish Fork and another was gassing during the last blackout. Springville was 8 forced to run their generators to restore power. Rocky Mountain Power forced Springville into a blackout because of their policy. Mayor Clyde commented that Rocky Mountain probably 10 assesses that Springville City will run their engines and cover the power outages, so they take their maintenance money elsewhere. He noted that, in the 90’s, Springville had one substation 12 feeding from the grid. Now there are two substations and feeder loops to reduce the likelihood of outages. Administrator Fitzgerald reported that the update to the master plans addresses 14 Springville’s critical infrastructure, and will be coming to the Council in the next month. Mayor Clyde gave credit to former Power Director Cal Baxter for working on improving reliability for 16 Springville residents.

Administrator Fitzgerald directed attention to the last section of the dashboard addressing 18 economic strength. He noted the listings for numbers of commercial businesses, sales tax revenue, new dwelling units, and population. He reported that as he had reviewed data for the 20 dashboard, the idea came to him that it may be time for Springville to “disjoin” from Spanish Fork. He stated that Spanish Fork has already become larger than Springville. Their per capita 22 income is higher. He noted that Springville’s per capita income is lower because the numbers of high density housing and mobile homes are higher. He listed other ways in which Spanish Fork 24 does not compare equally with Springville.

Administrator Fitzgerald asked if the Council has other measures to add to the dashboard. 26 Mayor Clyde suggested a line on tax rates. Councilmember Olsen asked how much effect the national budget sequestration that goes into effect on March 1, 2013 will have on Springville. He 28 noted that the Utah Legislature’s first estimate for state programs is $100 million. Administrator Fitzgerald replied that federal funds support the Victim Advocate program, the CUP grant for the 30 secondary water system, the Substance Abuse Prevention program, and senior citizens. Mayor Clyde suggested that it may also affect road funding and the museum. Councilmember Jolley 32 suggested adding lines to the dashboard regarding ambulance and fire response times. Administrator Fitzgerald replied that the response times are available, but it may be more 34 interesting to analyze volunteer vs. paid employee response times.

36 7:15 p.m. Department Core Objectives

Administrator Fitzgerald suggested moving to the core objectives for key departments. 38 He noted that most of the sheets can be examined by the Council later. Mayor Clyde suggested that the Directors address their objectives and strategies during the Work/Study meetings each 40


month. He observed that it would be hard to go through each department and division quickly, and the Directors can get the needed guidance from the Council so they can move ahead. 2 Administrator Fitzgerald drew attention to the cemetery goals. He pointed out that the Directors have worked really hard to get these goals prepared for the Council, but more thought is needed. 4 He noted specifically goal #2. Mayor Clyde agreed and asked how this goal would be measured.

Administrator Fitzgerald acknowledged that some of the goals as defined were not 6 helpful for the Council to understand. He directed attention to Recreation’s goal #1 and reported that he was not sure this goal starts with the right numbers. Mayor Clyde commented that one 8 complaint that he hears frequently from recreation customers is that information is not delivered in a timely fashion to coaches about their teams. Administrator Fitzgerald commented that this 10 goal may not have enough strategies. One strategy to consider may be doing a better job of training the coaches. Mayor Clyde suggested that another may be making sure that teams are 12 allocated evenly. He reported that some coaches or players request to be on the same teams over the years to the point that the team is “stacked” against the other teams. He asked if there were 14 rules on how to handle this situation. Administrator Fitzgerald replied that staff may not be adhering to the rules or getting lax on following up. Another policy regarding returning sign-up 16 fees for coaches’ family members at the end of the season was also discussed.

Administrator Fitzgerald asked if the Council wanted to review each departments’ and 18 divisions’ goals in the Work/Study meetings. This was confirmed. Councilmember Jolley asked if the department directors will review their goals and update them in advance. Administrator 20 Fitzgerald replied that he would lean on employees if the Council is behind setting goals that are specific, measurable, achievable, realistic and time-targeted. He commented that habits change in 22 time of crisis. Now that the economic crisis is starting to pass, staff needs to work to solidify habit changes into progress. He commented that he would need help from the Council to enforce 24 the positive changes. The City has pockets of data here and there, but others are behind the curve. This is a process that has a long way to go. He is excited to see the City progress to the 26 next level. He asked the Council to give feedback when they start seeing time and effort given and positive change implemented. Director Riddle added that as the budget process moves 28 forward, he would encourage the Council to talk about the Directors’ goals and suggest good comparisons. Administrator Fitzgerald thanked the Council for the good discussion today. 30

ADJOURNMENT 32

COUNCILMEMBER CREER MOVED TO ADJOURN THE BUDGET RETREAT AT 7:44 P.M. COUNCILMEMBER JOLLEY SECONDED THE MOTION, AND ALL VOTED 34 AYE.

DRAFT - Springville City Council, Work/Study Meeting, April 9, 2013 Page 1 of 5

MINUTES FOR THE WORK/STUDY MEETING OF THE CITY COUNCIL 2

OF THE CITY OF SPRINGVILLE, UTAH MULTIPURPOSE ROOM, 110 SOUTH MAIN STREET 4

APRIL 9, 2013 – 5:15 PM 6

The following are the minutes of the Work/Study Meeting of the Springville City 8

Council. The meeting was held on Tuesday, April 9, 2013 at 5:15 p.m. in the Springville City Civic Center Multipurpose Room, 110 South Main Street, Springville, Utah. Adequate notice of 10 this meeting, as required by law, was posted in the Civic Center and on the City’s website, and delivered to members of the Council, media, and interested citizens. 12

Mayor Wilford W. Clyde presided. In addition to Mayor Clyde, the following were 14 present: Councilmember Richard Child, Councilmember Benjamin Jolley, Councilmember Chris Creer, Councilmember Mark Packard, Assistant City Administrator/City Attorney John Penrod, 16 Assistant City Administrator/Finance Director Bruce Riddle, and Administrative Assistant Jackie Nostrom. Also present were: Community Development Director Fred Aegerter, Golf Director 18 Raymond “Sonny” Braun, Administrative Services Manager Rod Oldroyd, Art Museum Director Rita Wright, Police Chief Scott Finlayson, Recreation Director Charles Keeler, Building and 20 Grounds Director Alex Roylance, Library Director Pamela Vaughn, Power Director Leon Fredrickson, Public Works Director Brad Stapley, Power Generation Superintendent Matt 22 Hancock, Information Technologies Manager John Gleave, Information Technologies Technician Sean Maye, and Administrative Assistant Sandy Harward. Councilmember Dean 24 Olsen was excused. 26 CALL TO ORDER

Mayor Clyde called the meeting to order at 5:14 p.m. 28 COUNCIL BUSINESS 30

1. Minutes – April 2, 2013 COUNCILMEMBER JOLLEY MOVED TO APPROVE THE MINUTES OF APRIL 2, 32

2013 WORK/STUDY MEETING AS WRITTEN. COUNCILMEMBER CREER SECONDED THE MOTION, AND ALL PRESENT VOTED AYE. 34

2. Calendar 36

April 10 – UDOT Annual Visit regarding transportation issues, Utah County Commission Chambers, 100 E Center, Ste 2300, Provo 38

April 10-12 – ULCT Mid-year Conference, St. George April 16 – Work/Study Meeting 5:15 p.m., City Council Meeting 7:00 p.m. 40 April 19-20 – Spring Clean-Up Days


April 20 – 89th Annual Spring Salon Opens April 26-27 – Spring Clean-Up Days 2 April 26 – Arbor Day April 30 – Budget Retreat, Multipurpose Room, 1:00 p.m. 4 Mayor Clyde noted the UDOT annual visit. Public Works Director Brad Stapley

informed the Council that UDOT would present their proposed plan layout and explain funding 6 for projects. Mayor Clyde asked if it was the appropriate time to discuss issues with UDOT during their presentation. Public Works Director Stapley indicated he would relay the Mayor’s 8 concerns. Mayor Clyde highlighted the Budget Retreat and requested that the Council and Department Directors attend. He asked if there was any further discussion of the calendar items. 10 There was none.

12 3. DISCUSSIONS/PRESENTATIONS

a) Electric Generation 14 Electric Generation Superintendent Matt Hancock gave a brief synopsis of Springville

Power’s history. He introduced staff, offered details on the daily operations, and shared a 16 presentation related to the department’s resource management. Councilmember Packard asked what the long-term outlook is for gas. Superintendent Hancock responded that sites are 18 beginning to liquefy natural gas because it’s inexpensive. He added that there is enough gas to easily sustain the country for the next 20-years. Councilmember Packard observed two-thirds of 20 the City’s resources are in natural gas, and questioned if long-term contracts are in place. Power Director Leon Fredrickson responded “yes”. Superintendent Hancock added that natural gas 22 contracts are difficult to negotiate for extended periods of time because the longer the contract, the more expensive the contract becomes. Director Fredrickson shared his feeling that the next 24 great resources for power would be nuclear and gas. Mayor Clyde asked if there currently are any nuclear plants under construction in the United States. Director Fredrickson responded that 26 two nuclear power plants are currently under construction in Texas. Power Director Leon Fredrickson informed the Council that the Payson Power Project 28 has been undergoing extensive assessment of the critical equipment associated with energy production. The deteriorating condition of the equipment has resulted in the payment schedule 30 having to be accelerated to keep production up and running. The Project Management Committee (PMC) has been considering bonding for the funds and because of the process the 32 participants have the opportunity to prepay for the project or participate in the bond. Director Fredrickson proposed to the Council and requested direction on determining whether Springville 34 City should prepay their remaining portion of the bond. He added that the Electric Fund Balance has sufficient funds to accommodate the requirement and would ultimately save Springville City 36 $16,750 in interest over the life of the note.

Director Fredrickson presented a PowerPoint Slideshow displaying the deteriorating 38 equipment. He noted that repairs and inspection have been conducted through a Major Overhaul Reserve Account (MORA) that has been funded through the UAMPS budget. The Council came 40


to consensus that the debt should be prepaid. Finance Director Bruce Riddle informed the Council that a Resolution would be on the agenda for the next City Council meeting for their 2 final approval.

4 b) Information Systems Information Technology Manager John Gleave introduced the IT Staff and reviewed 6

daily routines and responsibilities. He recited the department’s Mission Statement: “The Springville City Department of Information Services is dedicated to providing and supporting 8 reliable technologies and technology-based services in a timely, high-quality, cost-effective manner to all City employees.” Manager Gleave explained that in the process of contributing to 10 an efficient and productive City government, the department has established the following guiding principles in order to provide focus for the delivery of this mission: 12

Align IT with organization goals: IT has become a vital component in every department’s service delivery methods. As strategic plans are developed for each 14 department, Information Services will play a key role in ensuring the advancement of the overall organizational goals. The adoption of new technology will be driven by this 16 organizational need and the necessity to provide public service that is dramatically more effective. 18

Increase useful service levels: Information Service’s role in Springville City is to serve as internal consultants providing high-quality, responsive service. The very nature of 20 technology being a core component of each department’s mission demands superior service and reliability. Attention will be given to the effective use of customer service 22 methodologies to promote the effective use of technology.

Deliver appropriate technology: City departments need to exploit new technologies to 24 improve service without incurring unnecessary costs. Budget limitations demand that the implementation of new technologies be done using best practice methods. Aligning IT 26 with department goals will ensure that projects are performed to promote service.

Simplify technical working environment: The technology environment is growing in 28 breadth and complexity every day. Serving a diverse organization with multiple objectives can easily lead to the creation of separate islands of information and 30 technology. Standardization of the technical environment is essential in providing appropriate solutions and support. Again, aligning IT with the overall goals of the City 32 will provide a focus on installed technology and support.

Capitalize on existing solutions to enhance productivity: Many solutions exist today 34 for city government applications that were not available just a short time ago. A good example is a program such as CORIS that has drastically changed the operations of the 36 Court Department. Information Services will work with departments to determine the known best practices to improve the effectiveness of each department’s technical 38 solutions.


Realize effective return on technology investments: Constant attention must be given to technology trends and cycles to get the most value for the investment placed in 2 technology. Increased use and complexity of technology has not always resulted in an increase in funding. Continual budget planning will guarantee that the investment is 4 worthwhile, while keeping the technology current and effective. The product of an effective service organization is the infrastructure of personnel and equipment that 6 supports the operation. Manager Gleave asked if there were any questions. Councilmember Child asked about 8

the wireless connectivity for the monitor in the Water Board Conference Room. Manager Gleave noted the monitor would have to be hardwired to receive the connectivity. He thanked 10 the Council for their time. 12

4. MAYOR, COUNCIL, ADMINISTRATIVE REPORTS a. Discussion with Department Directors 14 There were no reports 16 b. Commission, Board, and Committee Minutes

i. Emergency Preparedness Committee minutes of February 21, 2013 18 ii. Library Board of Trustees Minutes of January 10, 2013

iii. Parks and Recreation Board minutes for February 28, 2013 20 iv. Power Board minutes for February 13, 2013 v. Spanish Fork/Springville Airport Board minutes of March 7, 2013 22

vi. Water Board minutes for February 12, 2013 There was no discussion of the board minutes 24 c. Mayor and Council Reports 26

i. Water Board – Rick Child, Councilmember Representative Councilmember Child informed the Council that the Water Board is in dire need of 28

additional representatives appointed to the board. Mayor Clyde asked Councilmember Child to submit his recommendations. 30

ii. South County Mayors – Mayor Clyde, Springville City Representative 32

Mayor Clyde requested to postpone the South County Mayor’s report until next week due to time constraints. 34

Councilmember Packard asked about the Carnival’s alternate layout plan for Art City Days. He noted the businesses are concerned with the utilization of 200 South. Public Safety 36 Director Scott Finlayson questioned the Councilmember’s concerns. Councilmember Packard shared his desire for the Carnival equipment to be recessed further westward and only utilize part 38 of 200 South. Director Finlayson informed the Council that the Carnival has considered leaving a 20’ access along the road. He added that if the vacancy is expanded any further traffic could be 40


horrific. Councilmember Packard asked for verification of the Carnival layout. Mayor Clyde assured the Council that alternatives would be discussed and the Recreation Director has been 2 directed to approach the carnival to discuss alternative layout plans.

4 5. CLOSED SESSION, IF NEEDED – TO BE ANNOUNCED IN MOTION

The Springville City Council may temporarily recess this meeting and convene in a 6 closed session to discuss pending or reasonably imminent litigation, and the purchase, exchange, or lease of real property, as provided by Utah State Code Annotated §52-4-205 8

COUNCILMEMBER JOLLEY MOVED TO TEMPORARILY RECESS THE WORK/STUDY MEETING AT 6:53 P.M. AND CONVENE IN A CLOSED SESSION FOR 10 THE PURPOSE OF DISCUSSING THE PURCHASE, EXCHANGE, OR LEASE OF REAL PROPERTY. COUNCILMEMBER PACKARD SECONDED THE MOTION. THE VOTE IS 12 RECORDED AS FOLLOWS: COUNCILMEMBER CREER – AYE; COUNCILMEMBER PACKARD – AYE; COUNCILMEMBER CHILD – AYE; COUNCILMEMBER JOLLEY – 14 AYE. THE MOTION CARRIED UNANIMOUSLY WITH COUNCILMEMBER OLSEN BEING ABSENT. 16

THE WORK/STUDY MEETING WAS RECONVENED BY CONSENSUS AT 7:04 P.M. 18 ADJOURNMENT 20

COUNCILMEMBER JOLLEY MOVED TO ADJOURN THE WORK/STUDY MEETING AT 7:05 P.M. COUNCILMEMBER CREER SECONDED THE MOTION, AND 22 ALL PRESENT VOTED AYE.

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