City Council · 2024-03-12

We're gonna go over the 311 Center, the Senior City Center, and the library. So we'll turn the time over to Carrie to introduce the groups.

Yes, we're excited. You guys have already met Bruce the last couple of times with his presentations. Carson's been the project lead for the study.

Yeah, let's just get right into it. Bruce and Jerry's with Bruce. He's part of the NDT consulting group on one of these specific reports that he'll speak to today.

Okay, first let's do a sound check and confirm that you can see the slides.

We hear you. We don't— you need to share your screen still.

All right, thank you. That's why we do the sound check. Yes, no?

Yep, we can see it.

Okay, let's roll. All right, uh, there will be 3, uh, units that we review today. This follows the prior 2 presentations.

You're not talking into your mic, or it's muffled.

Is that better?

No.

Go ahead.

Uh, can you hear me now?

Yes.

All right, I will have to keep my face closer to the screen then. All right, are you able to see the slides?

Yes.

Okay, sooner or later we launch. Okay, we're reviewing 3 divisions today, departments. This follows, uh, 2 prior presentations. There should be 2 more after this. Um, we are going to begin with the library questions. I'm going to turn the Microphone over to Jerry Wolf of our firm who led the library review.

Bruce, can you go into presentation mode so we can see the slide a little larger?

Are we good?

Yes.

Jerry, all yours.

Can you hear me?

We can.

Okay, very good. Good afternoon, everybody. Jerry Wolf. I'm a director with MGT Consulting.

We—

the city manager and the council asked us to address 2 questions. Is the number of librarians appropriate? And number 2, how should the library address the relative emphasis on print and digital materials? So Bruce, if you want to go to the next slide, please.

Okay.

The number of librarians is really driven by the layout of the library. And that's something that you have and you're not going to change. You know, you're not going to change the layout. You're— in the near future, you're not going to be building a new library. But the way the library is set up with separate floors and basically 2 sets of tiers. Basically, the custom has been that each level would have somebody stationed at a desk on those levels. This basically means that the staffing costs have been higher for the library. What we found was, you know, we did a peer comparison We looked at Lehi, Provo, Sandy City, and West Jordan, Murray, as well as Orem. We looked at their staffing costs in the library, and basically the peers were in the mid-60s, mid to high 60% of their budgets devoted to personnel in the libraries. Orem was much higher. at close to 84%. And we believe that this is driven by the layout of the library and the interest and the custom of staffing each level pretty much at all times. We think there are some ways to address this. There are really 2 specific ways to address this. We believe greater use of technology So that the staffing— so that customers can access intercoms or some kind of remote inquiry, remote way of communication, so that they can get information about where books may be, so that it doesn't— each desk doesn't have to be staffed all the time. We also— and we think that can save significant funds.

Thank you.

The other way is basically not to staff desks at all times. We did ask the library staff basically if they had a sense of when the library was busier versus not as busy. Monday to Friday, weekday mornings seem to be busy with preschool-related activities. And Monday to Thursday in the afternoon. also seem to be busier. Weekends may not be as busy. Weekend evenings certainly are not as busy. So we believe there are opportunities to reduce the number of librarians, or really, it's really the personnel costs of the library. And, you know, by using more electronic communication and also staffing more appropriate to when the library is in in higher usage. The second question is on the print versus digital materials. There's a growing trend, you know, a lot of us, you know, read books on Audible or our Kindles or, you know, what other electronic devices we have. This is a growing trend. The circulation of reading material on electronic media is growing. Significantly. The— at the same time, the cost of circulation of physical books has been increasing a little bit, while the cost of per circulation of electronic media, electronic books, has been dropping. Now, on a per circulation basis, paper books are still cheaper than electronic books. But the trend is that paper books are increasing in cost per circulation while electronic books are dropping in cost per circulation. It's also a little more difficult to interpret the information about the cost of print versus digital. And that's because paper books are expensed when they're acquired, but there's an ongoing cost to the library of maintaining a paper collection. The cost of restocking the books, repairing the books is, you know, is a growing cost, and that's really tied to labor increase. So you don't have the same issue with the electronic books. So the trend for one is the cost is up, and the trend for the cost of the other is down. Orem also has the situation where they're basically maxed out on space. The library has close to a quarter of a million books in circulation. We heard from several people that you're tapped out on space, so that the opportunity to expand the paper circulation is— collection is very limited. So, Bruce, I'll Want to hand— turn that back to you.

Okay, could you, could you go back to the previous slide? Maybe. Okay, I just had a question on that. So it says Digital materials cost more. And then, as I heard your explanation, I wasn't clear on that. But do digital materials cost more than paper materials?

On a cost per circulation, yes. In 2018, the cost for a physical circulation was $0.63. Okay. The cost for an electronic was $0.83. But the cost for the electronic had dropped from $1.13 to $0.83 over a 5-year period, while the cost for paper had gone up from $0.57 to $0.63. So the trend for paper is up and the trend for electronic is down.

So it currently costs more, but one is trending up and one is trending down as we're trying to project into the future.

And you said these numbers were from 2018?

The $0.63 and the $0.83 are from 2018.

Does the digital— did you look into whether the digital limits access for people who don't have a digital reader or an ability to access? Digital content?

Well, digital does shift some of the cost to the reader because they need a device.

I'm just trying to understand that. That's kind of crazy that digital costs more than paper.

I guess my question is, libraries that do this, do they have digital devices to check out? Is that how they're, you know, reaching that barrier? Well, how does that figure into the cost, or does it?

Well, the 83 cents is just the cost to the library, not the cost to the individual reader.

Bryce, can you—

it looks like you have something to add.

Yeah, does that include the digital devices? Yeah, I—

one important caveat is the intended audience of the material. Specifically in children's, where we do a lot of our heavy circulation, the physical item is going to be a lot more important than maybe in adult nonfiction or adult fiction.

Right.

And so we do have a number of technology-supported players that you can get both the digital resource and a player for the digital resource. You can get both the streaming title and a Fire Stick or a Roku or something that would allow you, permit you to be able to check it out. And so There are still avenues if you don't have a Nook or a reader of some sort that you could get everything you needed from us in circulation.

Okay.

That cost is probably not counted into the 83 cents. They just charge to get a title is closer to maybe $60 or $70 to get a digital title where the same publisher would give us the physical book for $20. You know, very backwards from what you would see as a consumer. They charge a lot more per download or per use per license for digital material, which is what he's speaking to on the higher cost per circulation. And when you get those, those are typically leases, not purchased. So we lease a license of a digital copy, we get it for 2 years, and then it's gone. We have to choose to rebuy it again or not.

So, so if you, if you buy that, if you lease that for 2 years, then If it's used once in 2 years, the cost is a whole lot higher than if the cost is used 50 times in 2 years, right? Is that what's pushing the price up? Is you're paying for more?

Yeah, I think it's just the lease. Yes, the long-term lease, kind of like a subscription, right? It's a— it's an ongoing cost that will keep being charged, whereas the physical copy, you know, over 10 years, That book is valued now at like 20 cents. When you first buy it, it's $20. But yeah, as they mentioned, the digital subscription lease type service is trending down, but it's still not on par with physical.

Okay, so how do we determine— I mean, that's an everlasting list of books, right? There's a never-ending supply of these.

Downloads, how do we determine which ones we make available?

Is that based on any kind of national bestseller list, or— I'm sure there's a lot of different things that you look at when you decide. And we're not offering everything to everybody, right? Because that would just be—

You're exactly right.

There's a lot of different ways, different ways to do it.

And sometimes it's, do we have 5 licenses of the most popular title, or do we go for 5 different licenses and have a broader collection? So is it broader or is it deeper? And it's— there's no one exactly right decision. Even within that, you know, we're talking cost per circulation. A lot of our customer service interactions are, I need 3 weeks, not 2 weeks to get through this title. Can I have it a little bit longer? So that just took our cost per circulation up 50%. But But it's probably the right decision. So we don't want to get to a point where we're just, hey, you got a week, I need you to fully commit to this. You got to get in and get out. We got numbers.

This book will self-destruct in 3 seconds.

Yeah.

So we, we are trending definitely towards a, um, a best practice where we are responsive to the demands of our residents when they are requesting it, when they're putting more holds on it. We can see that data and we can sort of react to that. Even our digital librarian, she is able to look at the acquisition budgets of the other ones, and we're able to shift money towards digital resources because we can acquire them instantly. So we can be really responsive with digital, whereas sometimes the physical collection requires shipping it and then getting it through cataloging and acquisition and some of this process. And so we're able to be a little bit more agile with our digital collection. So it's an— this is why we asked the question is to see Let's learn some of these best national practices. And we're not going to turn one on and turn one off. It's more of just a sliding scale, and we're trying to fine-tune that right now.

Bryce, what is the life expectancy of digital over hard copy?

Digital is hard at 2 years for most titles. It depends on the publisher, depends on a lot of things, but 2 years. Children's Life expectancy is going to be less than a reference book. And then we have, we have a collection maintenance team. Their goal is to prolong that life, but eventually we get to a point where the cost of prolonging the life of an item is no longer worth it. So it depends is the answer, unfortunately.

In other words, to emphasize, this is only that acquisition cost. So in terms of the physical books, There's a cost of maintaining physical books that isn't incorporated here as well. But main thing is, based off of the trends, we want to continue to relook at the balance between digital versus physical and make sure that we're continually assessing and reassessing that so that we can make sure that what we have available is a, is a responsive balance based off of the demand.

Okay, thank you. Yeah, feel free to go ahead.

Okay, I do want to go back and hit on one point on the, the next steps for library. Just so you're aware, um, we've been very proactive when we've been getting these reports back, so we're taking, you know, the initiative to come up with some innovative solutions and One of those mentioned in this study was librarian staffing at desks, and we, the Strategy and Innovation Division, has already begun looking at technologies to put at these reference desks. Because like they said, there are some off-peak hours where there are— there may be staffing at these desks, but no customers or patrons in the library on that level. where we can use technology where they can summon someone from the main reference desk to go up and meet them and assist them. So we're still providing customer service, responsive service. But yeah, we're still investigating those technologies.

One of the comments we heard was that in part the reason for staffing at all times at all desks was security. For the facility. And we think, you know, at non-peak hours, you can accomplish something similar to that through remote monitoring video.

So may I— this question kind of for Bryce. I mean, this response system that you're putting in, I don't know what you've looked at, but frankly, you know, as I've seen in hospitals, You know, the nurses have something they wear wherever they are. They get buzzed. And that's— to me, I see a librarian as a roamer, right? They're not going to be sitting anywhere. So I think that would be—

The device I found, you can put a bunch of these little essentially touchscreens at a desk or a physical button. They have 2 options, and it goes to a central hub that can either You can use a radio system like you're talking about, or you can have kind of like a home base, like an Alexa-looking thing. And it'll tell the librarians at the main desk which button, which area was pushed to send someone there. So there are many options.

And it all depends on your staffing, right?

The assignment.

So, yeah.

All right, Bruce.

Okay. 311 customer service. Uh, is, is accurate, but something of a misnomer. The 311 service itself consumes a little over 10% of the staff's time and is a priority event. When the phone rings, they have to answer it. But because they have other capacity, they are given other things to do. And I'm not going to read you the list, but you can see there's quite a few other municipal services that are provided by 311 customer service. So we have done some staff analysis with that, but we will have some comments on how to get more data to provide management with some useful information. And we will discuss as well a little bit of process improvement. The staffing of the 311 service itself appears quite good. The time per call is comparable to peers. And the staffing level for it is comparable to peers, even though your configuration with all the services provided by this unit is unique to Orem. Subject to the available data, we concluded that the division is staffed reasonably. The activities that they perform consume about 80% of staff's capacity. In our experience, and we've done studies of this, 25% of total spending for overhead is the reasonable target. If you're at 80% on direct, you're at 20% of your time available for administrative and management purposes. And that's close enough that we would— are comfortable saying that the staffing for this is correct. Nonetheless, and this segues into the process improvement issue, one could wish for some better data. And in particular, on the 311 system side, the current ShoreTel telephone system does not provide some of the metrics that management would like to have. And that would be data like how many rings before a call is answered, how long does a call last, how do the time spent by different operators compare, what are the trends in some of these things. It would be nice to have the management data. We've thought about a couple of different ways to do that. The lower-cost way to do it is periodic work sampling, and we envision that being a system where one week every 3 months, staff fill out timesheets about the activities they perform that could be tallied and analyzed by management for that insight into productivity and trends. Another way to look at it is when you're ready to get a new system. At the time that you got the ShoreTel system, it— the market didn't really provide some of the dashboard management metrics that you might like to have. But software is evolving constantly, and if you are interested in pursuing a new system, we would say that one desirable feature would be the management data to track individual employee productivity trends, customer service levels, etc. We think that would be helpful to have. The issue there is whether you want to buy a new system or whether you're ready. Eventually you'll need to. We're not saying you have to drop everything and go do it right now. But it would allow you, subject to getting a system that had some of those features, It would give management more insight for continuing tweaking of how staff are aligned with workload. We don't have any complaints about what you're doing. We're not saying it's not efficient. We're just saying, who wouldn't like to have a dashboard on their car to give them some feedback about how things are working? And so if you don't want to buy a system right now, and that's fine, we would do periodic work sampling. to get data, and we think that's a lower-cost way to get some of that information that we believe management would want to have. Shall I move on to Senior Center, or do you have any questions about that now?

I think we're good on questions. I do have a note on this, though. As you recall, when Jenica presented on the new Division of Strategy and Innovation, one of those pillars of that division is data. And Jenica's been— we've been meeting with all the department directors and the managers to come up with some ideas on how we can help departments and divisions enhance their data management so that we can, you know, make data-driven decisions in the future. So we're currently working on that. uh, excited about the departments. They really actually want the data so that they can make those informed decisions. Um, so hopefully that will help, um, give some more direction, um, not only for 311 but citywide.

So in other words, looking at dashboarding software citywide rather than a short funnel Landline phone-specific dashboards. There's a question.

I was just going to ask what a cost range might be, but it sounds like it's irrelevant based on the cost.

We at least want to start there with this citywide software. If that doesn't provide everything we need or want, then we would go and look at the specifics.

Our report contains a summary of the software used by your peer cities. There's quite a few options out there. And to some degree, of course, the question of cost is the $64,000 question here, but it's a little bit like asking, what does a car cost? It kind of depends which car. But I don't think you're starting from scratch. You know what all of your peer cities are using and whether you would be charged what they paid. I don't know. That depends on what the vendor quotes and whether they bought their system recently or not. But I think you have a basis of, of getting some feedback from your peer cities of how much they like the systems they are using.

And I will add one more note with 311. Um, if you compare them, if you read the report and compare them to our peer cities, um, I think we should be very proud of our 311 staff because they do more than every other city does. Utility billing, fingerprinting. So I think this report speaks, speaks for them and how hard they work and how efficient they are.

Yes, it also speaks to the training requirement to work there, that staff need to be trained to do a lot of different things, and they've been able to make that work quite well. So any further comments on 311, or shall we move on to the senior center?

I think we're ready to move on.

Okay, 2 questions here. Do you have the right number of staff, and could you get some rental revenue subject to investing a little bit of money? On, on the staffing level, we believe that workload and capacity match reasonably well. The staffing is very lean, and it borrows from other people in recreation to help, and that's not readily quantifiable, but at least subject to the peers, we believe that the senior center is staffed appropriately. They might make the argument that at certain times they could use one more person, and, um, we wouldn't necessarily disagree with that. In terms of the efficiency study that this is part of, um, the focus is more on bang for the buck. We know that if you spend more bucks, you can buy more things, but we've been trending primarily around how can you get the most out of what you're already spending and using a lighter touch on recommending that you spend additional monies. Within that context, I think they're staffed fine. On the facility enhancements, we believe this is feasible. And that some of your peer cities are already doing it. That would be Provo and Lehi. They get between about $5,000 and $8,000 of revenue annually. The equipment that you would need to buy, the audio equipment, tables, chairs, etc., we believe you could buy, you know, less than $1,000 or roughly that. So as a business proposition, it's not a home run, but if you could spend $1,000 and make $8,000 a year from it, We would recommend you do that. In order to rent the facility, we think you need to do that. If somebody wants to have a party, they'll want audio equipment. If they want to have a meeting, of course, tables and chairs. They might need those for a party as well. That this practice exists in your peers tells us that there is some demand for it and that this is worthy of your consideration.

Right.

The, the division is small, but we think it functions very well. We would not recommend a change in the size or structure of the division. We are intrigued by the rental option, but understand that whether you do it or not, we're not talking about a huge amount of money. Nonetheless, it would be efficient if you could drive more revenue from facilities that you Already owned. There's a very low incremental cost to do that, and there appears to be some revenue available from it.

Is that currently rented out?

Bryce, it's not right.

We do, uh, in very limited, very limited scope right now.

Is that because of lack of demand, or, uh, we want to keep it open for our seniors?

You know, we, we have no interest in infringing on the seniors' use of the space, but that's really limited to Monday through Friday, 9 to 3. And so I think as we look at the after-school demand, I know we had a great presentation from a potential partner organization a couple weeks ago in council work session. I think some of those are where we start to think about this space and that size of a building, that capital investment might be readily available to, whether it's through a rental revenue or through a community outreach effort. It's, it's very close to being very useful for a lot of other things that wouldn't take away from the seniors' experience.

They would still have total ownership during the day.

And I think, and I think we would want to reinvest that revenue back into building and into our services for seniors to begin to enhance what we're providing programmatically.

I don't think we are going through a process right now to try and figure that all out as far as what space would rent for what prices to which group, make it all structured. So where'd you want that right now? Yeah.

Sorry, go ahead, Bruce.

For comparison purposes, just to let you know what your peers are charging, Provo charges $125 an hour. Plus $300 to use the kitchen. Lehigh requires a $200 deposit, $50 per hour.

Yeah, and just based on, you know, the conversations that I've had during this, this particular study, and my own observations with what is done at the family fitness center, I constantly see those spaces being rented out. The senior center is an awesome asset for the city, and it's so close to a lot of great infrastructure— the library, the park over there. I, I do think that people would see— jump on that opportunity to utilize that space. And then, like Brent said, the reinvestment benefit into the senior programs and the facility itself from revenue could be monumental for them as well. So I do see it as a, as a win-win if we, like you said, make sure it stays in its lane and is balanced.

Yeah, I've had some seniors reach out to me and say they want to do dancing. I guess there used to be a Thursday night dancing at the senior center that drew people from all over the valley. So I don't know how they You know, I guess that's through your programming, right?

That one is a hybrid model. Yeah, we've looked at that. And again, I think as we groove having staff that are ready to work evenings, we can then dibs it for our own programming. So when we do the Grammys or some of these other evening game nights and dance parties and events, we have staff that are ready to work every evening. So I think it'd make it easier for the senior center to do the occasional evening activity. Or dance or, yeah, concerts.

And to speak for, like, like what's touched on, the bang for our buck in the senior center, we also, just like 311, have the best staff at the senior center, um, particularly when you look at the peer cities and what we do compared to, let's say, Provo was the one example I was talking to them. Their senior center is actually in their rec center They don't have their own dedicated facility per se. So when they're renting there, it's in the rec center. And it's really awesome that we give our seniors their own, you know, space to participate in this program. So kudos to the recreation team on that as well.

So do we—

we currently have groups that are renting space at the senior center. That sounds like a limited amount.

Specifically, there's a number of nonprofits and organizations. The mayor, you know, I think alluded to this, and we're trying to find out the right way to treat each of our wonderful partner organizations fairly and equally, and also make sure that the senior staff budget is not subsidizing other outside groups when they already have a pretty lean budget. And so we want to do right by our partner organizations. and also cover some of those direct costs of making that facility available to them.

Yeah, any other questions about any of these reports today?

Thank you.

Welcome.

Thank you, Bruce and Jerry.

Thank you.

Thank you.

Thank you.

Okay, thank you.

Move on to item number 3. Okay, actually, correction, we're going to move to number 4, Recreation New Year's Resolution Impact, and, uh, that'll be from Mariah Shirley.

Do I get to be up there?

Yes.

Sweet.

Mahasi.

All right, is Pete pulling up my presentation for me?

Yep, use this computer.

Okay, do you want me to use mine or yours?

Yep.

Hello everybody.

I know some of you know me. I'm Mariah Shirley over from the fitness center. I think I've interacted with most, if not all of you, but I'm kind of—

I'm out of the way a little bit, so nice to be out again.

Do you have your own dongle for the HDMI?

I do not. Do you have—

oh, no, he suggested casting.

Okay, thanks.

Oh, that was a great thing.

Thank you.

Brandon is interesting.

Brandon, he's the hero. He found Windows Key. He's gonna have 64 songs. That's right.

Windows Key.

Windows Key.

Oh, the gay guy.

Oh no, I don't think I have to. This one?

Okay, so I'm excited to share a couple things for you guys. I wanted to kind of talk about the impact that fitness and recreation has had over winter. Winter is one of our biggest times. It's kind of It's an exciting time for us. It's a lot of New Year's resolutions. It's a lot of new people. It's a lot of learning people. But this year we were able to do a couple new things and see some really great changes in fitness in 2024. For starters, we opened up this year on New Year's for the first time in a long time. I was really excited about it. My mom called it the— I think the Super Bowl of fitness is what she called it. I was like, yeah, that's about it. So I just wanted to take a peek into Some of the things that we did this year. The first thing I have to prep a little bit. The first thing that we're going to watch, I just wanted to show you guys kind of the impact of fitness in our facility at the beginning of the year. And so our first thing that we're going to watch is a time lapse. And I just want to show you guys what it looks like to be in our facility for a little bit. This is a pretty small area, honestly. This is what we call our, like, warm up and down area. So people are here for the first, like, 5 minutes or the last 10 minutes of their workout. This is the span of over like 3 or 4 hours, and it's happened. You can see, like, at some point somebody takes a picture, somebody's doing like little selfies. People are in and out, and this is just a small, small piece of our facility for a few hours. And this is kind of one of the least used areas. It's a busy area, but this is not even the functional fitness area where they've got the strong weights. This is not all of the machines that we have, the treadmills, but it's just fun. It's fun to see how busy we are. How many people are moving in and out of the facility? It's exciting. I wanted to talk a little bit about the individual experience versus the group experience. So as you could kind of see, there's a lot going on. And each of those people are there with maybe themselves or one other person, and they're navigating 4 other things in the facility. They're seeing, you know, their experience in functional fitness. They're going to the, you know, the treadmills. I see Ryan do his experience there, and I don't know how many people you see in your trip there, but Your experience is kind of unique.

You get to do your own thing.

You don't really get— I don't, I don't try and bug you too much while you're there, but you get to have—

Yeah, that's it.

But it's important for people to be able to have their own experience and still be able to be interacting with a few other people. But it's fun to see from an outside perspective managing it, the hundreds of people that are in the facility while all having their own individual experience. I wanted to also share some, some really fun numbers that we get to look at. So, for example, these are what we call heat maps. We kind of use these to figure out how to staff most of the time, what it looks like to be able to handle the capacity in the facility, be able to manage the entries and exits at any time of the day. And these are very interesting just to look at that in our December— this is December 2023 and January 2024. And just taking a quick peek, we see even already a pretty big change moving into January. all those New Year's resolutions everybody is suddenly deciding that they— Yeah, they're going to be fitness. They're going to be fitness right here and now. And so, um, it's fun to see the numbers, and it feels like this too. You can kind of tell when the facility gets a little bit louder during, you know, the morning times of the day. The afternoon time of the day, it gets a little slower, and then evening we get right back up to it. So it's fun to share. Again, individuals don't see this necessarily. They come in for their fitness class, they get to connect with you know, their friends, their family members, and we see 400 to 500 people coming in and out of the facility. It's amazing. I did want to share just a couple of our, like, individual users here. Sorry, I'm going to grab my water bottle. But 2 of these people up here, we've got 2 of our fitness instructors. The one on the left is Melissa Rask, and she has had an excellent story. She has been teaching with us for more than, I think, 8 years. Which is great. That's, you know, not our longest teacher there, but we love her. And she has created such a great community that she was able to convince 3 of her members in her classes to also teach. So we recently were able to hire Vanessa Adams as a teacher there. She inspires her class. She's able to bring like a full community together. And every time she has 30 to 40 people in her class, and they're kind of a different 30 or 40. So she's got 80 people that follow her around the fitness center, come to all of her classes. She teaches, I think, 8 classes a week. And people just love her. And that's important for us to be able to have that kind of an impact in the community, to bring people together enough that they're convinced to work for us, which is great. And then also to build those, those very, like, important community bonds together. And then the last thing I want to talk about is kind of the future, where we see ourselves going in the next few years. I'm excited about the future at Hillcrest specifically. I know that we've talked a little bit about how we relocate some of our current fitness opportunities or our current programming opportunities to Hillcrest to allow for more drop-in users at the fitness center. I'm excited to be able to move some of our programming, some things that are taking up some of our rented or usable spaces for fitness over to Hillcrest so that we can continue offering better drop-in spaces for our users at the fitness center. I know that we've got some fun opportunities coming up with, you know, Orem Fest Fit. We're doing a few classes with the Orem Fest community, and we're trying to connect to people outside of the fitness center itself. And then just looking at the Recreation Department as a whole, are we covering all of our bases? I'm really excited about the Hillcrest opportunity. It's been fun to be able to kind of branch out to that area of the community. But not only that, we're constantly taking a tally. Are we filling spaces that we need to fill? Are we reaching the community members that we need to? It's fun to be able to take a look and figure out, are we doing the right things? Do we have the right spaces filled?

You're coming up?

Are you joining?

I'm just lurking in the corner.

Yeah, okay, that's fair.

I just wanted to, you know, add my voice to what Mariah shared today. I think so much of our conversation, especially as a rec department, focuses on the really cool projects that we're building with Chris and the public works team. It focuses on— maybe even some of my conversations are, you know, focuses on like the financials of the recreation center. Are we operating in the black or the red? And are we doing tens of thousands of people at this, or what are we doing? But I think the work that Mariah and her team are doing over at the fitness center really speak to the purpose and the, the central importance of recreation as a whole for our residents. Uh, Mariah, she mentioned 400 to 500 people, that was per hour. And so, you know, on, on any given day in the winter, we are seeing thousands of people come through our doors, thousands of our residents. Um, we love our proximity to, uh, Mountain View High School, that we have such a strong after-school, um, and sometimes during-school, uh, scene from our, uh, from our teen students next door.

We're working with them.

Yeah, um, but I, I just, I wanted, I really wanted Mariah to take an opportunity to impress the importance of the individual, of the relation of what, uh, their team is doing over at the fitness center and what it means to our residents. We're grateful for y'all's support, uh, and we got really exciting things coming up, and Mariah and her team do a wonderful job over there.

Thank you.

Yeah, who you got?

Uh, Mariah, Chief Adams put me up to this, but didn't we talk about providing time for people with luxury cats to walk them around?

Yes, Sundays. Very— it's kind of a different—

that's what she wanted, right?

She—

that's what we're doing.

Yeah, luxury cats.

I just have a quick question. Are cats okay with like 500 other people in the facility? Are they going to be—

they'll be in a stall.

They expect the track to be their own.

To your point, I don't have to go home and tell my wife it was a Zumba fitness entertainment. Thank you for the consideration.

Yeah, absolutely. I was kind of interested to hear a little bit of your perspective on it. Do you feel like you go at— because I will, I will say this in the kindest way possible— you maybe go at the worst time.

I do go at the worst time.

If I was going to choose a time, it would not be 6 PM.

That fits my schedule.

It works great.

It is so busy in there. I go home and complain it's too busy.

That means it's working.

Correct.

That means our team's doing a great job, and I, I love it.

Um, I still can do my workout.

That's great.

Figured out how to do it.

So I've kind of experienced similar things where if I'm able to work out at like 1 or 2 PM, that's the sweet spot. And I'm lucky because I get to work there, so I get to like hide my workout in the middle of the day. But if I postpone because I get busy and And I wind up at the same time as Ryan, I am ruining the day already. But at the same time, I'm still able to find what I need to find. There's, there's enough to do. It's just fun to work out a little bit more alone than with, you know, 200 other people.

But I mean, you're from ages 14 to 80, 90 there.

Yeah.

And you used to go in the old fitness center near the end, and it was 70 to 90, it felt like.

Yeah.

So did Kids are back, college kids.

One thing that we love bringing back is some of our, like, family fitness opportunities. So we have a couple really popular teen classes right now, and that kind of allows, like, our 10 to 14-year-olds to be doing a workout together while their parents are working out, while their kids are in childcare or programs. So right now you can have an entire family unit kind of almost babysat in different areas of the facility, and they're all having their own great experience, and then they can And so we've really enjoyed being able to connect to all of the different ages without it just being seniors, but we still have a whole bunch of those.

Yeah, that's for sure.

Yeah. Any other questions?

Well, thanks for the energy you guys bring.

Yeah, it's fun. We always— I kind of brag that we get the most fun job here, but everybody probably believes that to some extent. But we love recreation, that's for sure.

Well, thank you.

Thank you.

More work on cat day. We have talked about doing, you know, like a puppy event at the pool at the end of the season, so maybe we'll do a cat day at the pool.

Yes, please.

All right, we'll move on to item— we're gonna go backwards to item number 3. Uh, this is attainable housing, and presenting is Joe Spencer and Alex Stevens.

Thank you, I appreciate that. There's only one seat up here, so Alex is in the back here. But, uh, let me just—

uh, Alex, come on up. Great, thank you, appreciate that.

If I could do a little introduction.

Please do, Mayor, Council.

Joe and Alex came to Development Services and met with us and have this creative, uh, way to do ADU units for people that may not be able to And we thought there was value to this program.

We thought we'd have them come present to you to see if you found value as well.

This would be an option that we could add to our affordable housing plan with the state of Utah and possibly get credit for it.

And it's not a program for everyone, but it may be a program for some.

As someone that took 15 years to finish my own basement on my own and on a pay-as-you-go plan, I could have done this program, saved a lot of money in that amount of time. So, so with that, Joe, I just want to give you the introduction.

Perfect.

Appreciate that. So let me just, uh, let's see here.

I guess, uh, let me get things squared away here.

I guess we're just straight PDFs bouncing down.

There we go.

We'll just— all right.

So the Attainable Housing Agency was created November, last November. It's in a local agreement between Utah County and Weber County right now.

There's—

the whole purpose is to fund ADU construction and those ADUs to be used for moderate-income housing. So, it's— the funding is through a special revenue bond. I think probably everyone here knows what revenue bond is, but this is slightly different. Just a tweak on a special revenue bond. The source of the revenue is a 10-year master lease on the ADU. So AHA, the Attainable Housing Agency, will master lease a basement for 10 years. Uh, so the homeowner signs a 10-year master lease in their basement. AHA builds the basement apartment and manages that for them for 10 years, puts somebody in there at 80%, 85%, uh, AMI manages that for 10 years. At the end of the 10 years, that ADU is available for the homeowner to do whatever they'd like to do with it. So that's kind of the quick overview. A little bit of— let me kind of get back and we'll just go through some of the things on the slide here. I'm getting ahead of myself a little bit. We've got a couple of county commissioners in the leadership of AHA. I'm the executive director. Alex is the operations guy. Brandon Johnson, maybe, maybe you've worked with him on bonds before. He's our legal guy as well. So, I've, I've been the chairman of multiple local districts. I've raised $66 million in municipal bonds. I was an MSRB municipal advisor for a while. Then Land Development landlord. So I've got some experience. I've had 45 tenants. A good chunk of those tenants were in the 30% PMI. This is not the program for them. My tenants, it's not a situation for those folks. They need to be in probably higher density kind of things. This is really about gentle density, creating gentle density in a community so that the neighborhood doesn't feel overwhelmed. You don't have people showing up at city council, having frustration with a high-density, low-income kind of project. So, um, so I guess we kind of talked about this. Uh, so we, we find houses that are either soon to be built or already built. Uh, they may or may not, uh, in Orem, there's not— I don't know, you guys have an awful lot of space for new build. I think you're supposed to build down. Is that probably right? Uh, so it'd be mostly with homes that were previously built. Uh, right now, from what I understand, there's a fair number of ADUs that are not meeting requirements. Uh, Kenneth was excited about the idea that maybe this program would be a way to bring people into compliance. They may or may not have an external access. It's going to be $10,000 to $15,000 to bring an ADU that's in place without external access to bring it out and decrease off-street parking for that ADU. So, uh, she wondered if it might be possible for us to, to work with folks that are getting the nasty grams from the city saying, hey, look, you're out of compliance. And, and we, we'd be happy to talk to those folks and see if we can't bring them into compliance. Uh, so the quick turnover, I guess we've, uh, I think I kind of covered all these things. The other thing is, is the moderate income housing reports. AHA members, people that join AHA, the municipalities that join, will do annual reports for moderate income housing that show how many people are in your community that we're managing. So it's just one more thing you can add to your annual reports that the state requires. Um, See, um, I think we've kind of covered some of that. Uh, so, ADU is one place if there's a problem with some of the ADUs, you can come to AHA, to Alex, uh, that is going to manage that. Tell me your background, please, Alex. I'm sorry, I get going on this. I'm excited about it. I love this stuff. And so, go ahead, Alex.

Thanks for that. So I've spent the last 15 years in operations, specifically large-scale residential construction. And I live here. And my wife's actually a high school teacher at Mountain View. And many of her colleagues can't afford to live in this area. And when Joe brought this to me, this appeared as a very successful a big opportunity for people to stay here in Orem, build the community, have a way of revitalizing some of these older neighborhoods.

I live in an older neighborhood.

I live probably 5 minutes from here, and more and more, you know, families are growing there. And that's what excited me about the program. And, you know, wanted me, You know, allowed me to, to kind of pick this up, apply my operational experience so that when we bring someone on, they don't have to worry about the hard part of renting. So finding the tenants, filtering the tenants, and then handling all of the maintenance. So when someone participates in our program, they partner with us.

Awesome.

Over those 10 years, they don't have the headache of the rental property. They don't have the headache of the maintenance. We handle that. We make it easy. And then at the end of it, they have a fully formed investment in the form of rental.

Yeah, and they didn't pay for it at all, right? So there's no upfront for the homeowner. It just— the payment comes through that long-term lease. And depending on how much— if it was an ADU that was partially built out and only cost $30,000 or $40,000 to finish it, it may be that they're getting $300 a month positive cash flow out of it. If it turns out that it costs $70,000 to finish the basement, there may not be any upfront cash flow, or there may be only $100 cash flow, just depending on what the cost is. But they're not having to qualify for a loan. They don't have to— That, you know, it's none of that. Some of the difficulties that they have and, you know, doing pay-as-you-go, it's a hassle, right? Getting down there and putting up the sheetrock. This is just something that Alex is going to manage. We've got several partners that are anxious to help build out the ADUs that people— yeah.

So is there not a lien that's added to the property?

So the lien—

yes, thank you for bringing that up. There is a Trustee that guarantees the 10-year master lease. It's something that goes on the title, and it'll act as— it's not a second mortgage, but it acts a lot like that. And so if the people sell their home, that has to be paid off. It amortizes over that 10-year period of time. So if they sell their house in 4 or 5 years, there'll be some portion of benefits left over. Just whatever needs to be paid off for their portion of bond. So a bond might have 50 or 60 ADUs in it that'll be lumped together and in that bond, but AHA will manage that portion for each one of the ADUs that are in there.

So, so if they sell their house, then you're saying that comes off and that's resolved in some way?

Yeah, 2 options.

They can leave it in place if the new owners want to keep it in place and have it be a rental that can be left in place for—

I don't think it was going to be left in place for the remaining time for a new taker.

No, for the remaining time, whatever's left remaining. It's— HA is not looking to make money off this. It's not an ongoing kind of just pile up a bunch of cash for ourselves. It's a— it's an opportunity. We do have to cover the maintenance costs and management costs, but it's not something where we're trying to take advantage of anyone's property in any way. So, I think—

How does it affect the value of the property?

Yeah, that's an interesting point. There's a builder that we're talking with that has 2 houses that they just sold. They got appraisals on them. They sold— one had an ADU in it, and another one didn't. They were exactly the same floor plan except for the one with the ADU. The one with the ADU sold for and appraised for—

how much more was it?

It was $40,000. It was, it was, I think it was $40,000 more than the cost of the ADU. So there was automatic increase in value beyond the cost of putting the ADU in. It was either $30,000 or $40,000.

I can't remember which. It was $40,000.

$45,000? Yeah, that's— yes. Anyhow, it just— that number didn't stick in my head. But just the fact that There's an ADU there, it creates additional value. So the additional value goes to the homeowner. We're not looking to take that extra equity that's created by putting that ADU in place, but it's good because it makes the bondholders happy that there's more than enough to cover.

Is there a type of home you're looking for as far as age? I mean, would you do a 60-year-old home?

We prefer 30 years up. The older homes are going to, you know, it's going to take some work, and it'll— if they've had their basement finished out, but it's not legal, it might make some sense. But we'll have to look at it on a, you know, each person basis.

So, I guess my question then would be, where are you in these construction costs?

Are you—

so you're going in and building this for someone. Are you average market cost? Are you elevated cost because you're adding your maintenance in there to these homeowners? How is that?

What's the process?

Yeah, where, where's the win-win for you here?

Sure, sure.

So, um, we work with— right now we've got several home builders that we're working with that want to just have it be part of their process that they can offer a basement that's free, essentially an apartment it's free, but have it be managed by AHA. Or there's several, uh, general contractors that focus on basement apartments, and, and we don't need to have an overage beyond what their cost is. There will be a small amount that comes in for management, uh, that they need to take care of the management.

But that—

I think that's where the majority— there's a small amount that comes in I'll be putting some money into AHA from the funds as we're going through. You know how municipal bonds work, there's kind of layers of expenses in there. And some of those layers, we've been able to shave off, and some of those expenses would be able to go into AHA for our costs.

So that's—

you're asking how we're going to be going?

Yeah, my question is, are you cost plus You know, 10 and 10 overhead and profit. What are you doing?

That's, that's—

you have a formula?

Construction is not— we're not going to put money on top of the cost of construction.

So are you making most money on the bond?

Uh, we're making some on the bond and we're making some on the management, but it's, uh, the long-term management is where the, the cash flow comes negative going concern.

Are you structured to what point?

What's that entity?

So AHA is an entity of the state. It's an interlocal entity created by Weber County and Utah County and anyone else that wants to join, any other municipalities. And we would hope that Orem would like to join. Those folks that join, if you become a member, then the responsibilities are to assign somebody to be a board member. Uh, we anticipate quarterly, uh, board meetings, electronic only, and those board meetings are necessary to authorize the bonds. So, um, that's really the only responsibilities of a board member. But that's— we'd love to have 8 or 10 municipalities join.

Is there a cost to join?

No cost.

No cost.

So, Alex, tell me your vision here. You see this as going in and revitalizing neighborhoods Tell me what—

how did you explain that to me?

Well, I grew up— I mean, just to give you some of my background, um, I grew up with a single mother and 7 kids, uh, and we grew up in the neighborhood, in a nice neighborhood, and I had the opportunity to meet people that I never would have in my socioeconomic state. And it changed my life. I went on to serve an LDS mission. I went on to get educated, have a wife, grow up here, you know, raise my children here. And specifically in my neighborhood, about 40% of the folks that live there are in their 60s and 70s. So they've been there for quite some time, right? This gives them the opportunity to partner with younger families like I did when I was younger. And those folks can help maintain the properties. The, you know, the senior folks can also derive revenue from, from these partnerships, and they can stay where they want to, right? They don't have to move out. They don't have to go to a senior living facility. They can stay in their home that they've been at for 30 years and also have people who are young and want to maintain and want to, you know, send their children to school in that. Does that make sense?

Do you have any of these that are built out and rented yet, or are we not far enough along?

No, we just got the entity put together, uh, late last year, so we don't have anything. We're just putting the first fund Together.

So that's—

we have a long, long list. There's an incredible amount of interest in this. Every municipality is excited about it. We have a lot of— the builders are stoked. And they— I mean, we've only got 2 general contractors right now that we've cleared, but those guys think that they can— they've got the capacity between the 2 of them to do 20 a month. Ongoing basis. So this could turn into something that could be useful. You know, it's, it's a lot better than putting a 48-plex up somewhere that 15 years down the road it's not going to look so great.

Do you see yourself turning down some homeowners?

Yes.

Yeah.

Based on what?

Uh, certainly based on the homeowners deserve the right to have somebody that they can trust in the basement, and the renters deserve the right to be able to trust the homeowners. So no felons, uh, and, and we're gonna have to make sure that all their— that their bills are being paid. Uh, they don't have to do a credit check, but we'll do a credit check. It's not something they have to qualify, but we need to know, are they going to pay their utilities? Are they going to pay their mortgage payment? Because that's going to be an issue for us if that's the case. So we will turn down people people that have some difficulties.

But so older home, you know, where you have to actually go in and, and create bigger windows in the basement to bring it up to code, things like that, you're willing to do that?

It'll be a case-by-case basis. But if it turns out that the homeowner— I mean, in some cases, if the homeowner wants to put a mortgage on, or they have some savings they want to throw in on it to make up— there's a certain cost point that it makes sense. And if it doesn't make sense, we say sorry, we can only do— in your house, for instance, $70,000 is where it breaks off, and you got to come up with an extra $20,000 because the contractor says it costs $90,000. So you have to come up with $20,000 or something. I mean, we haven't, but it's going to be a case-by-case basis.

That makes sense.

Do you see—

I guess, does the homeowner have any control over who is in the basement?

And then how do you see resolving What could potentially be inevitable differences between the owners where they don't have any control?

How does that work?

So, the homeowner, I think—

Alex, go ahead. So, there will be several checks in place. Obviously, every person that is renting one of these ADUs will go through a background check, a credit check. So, there'll be initial filtering. And then something else we've discussed with Amelia At Utah County and others is allowing any homeowner to self-select, so to say, if they have a, you know, a niece or maybe their son or a family member, and have us take special consideration for that demographic first, right? We construct the ADU, do the filtering. Someone says, hey, I have someone with special needs. I would love for them. To be in this ADU, we would consider them first and then our non, right?

Now, again, not to cut it, but that person has to be able to make payments, right? So that they have to be able to pay rent because the bond has to be paid. So, right. Yes, it can't be, hey, I got a special needs son and sorry, there's no way to pay the rent. It has to be.

And the onus is kind of on you guys, right? Because I mean, if you're putting in a 10-year lease, that's right, and you don't get rent for 18 months, that messes with your bond.

That's exactly right.

So it really falls on you to make sure you've got good tenants and go through all the normal screening processes to get people.

That's exactly right.

So the hairy parts about renting and managing that go away for the homeowner. You know, we often get asked that question. What input would the homeowner have? Tremendous amount of input. However, if you think about it, we're handling the parts of renting that aren't actually fun, which is rent collection, maintenance, finding the tenants. All of these challenging things get smoothed over by our process and our experience.

If somebody says, hey, listen, they're smoking weed down there, they call Alex's group, and then Alex's group gets hold of people and say, look, When you signed up, it said, here's the list of things that are not allowed. You're going to get kicked out. You know, so that would be Alex's group.

Take care of that. It's managing. So, kind of a follow-up to this, then who's on the hook for the months where there isn't someone paying rent? Like, say there's turnover or someone has a tough month, right? Right on the homeowner, or is that on AHA?

No, it's on AHA. There's— it's on AHA. There's a fund set aside for that out of the bond that we've put together, reserve funds for that.

You're assuming, again, even despite all your best efforts, some amount of vacancy, right?

That's right.

Yeah.

Nothing's 100%.

Let's see here. This package, did this get sent out to everybody? Or can it be sent out? There's just some extra So there's— I guess I'll just real quick run through this. Applications. Let's see here. My basement being rented to family members. Yeah. If the kids— if your kids are above 80% AMI, we're gonna say no, this is gonna be an 80% AMI. I'm sorry. It's just that's the program. After the 10-year master lease, they own it. They do it, you know, they can rent it out at full market rent. It's part of their retirement. It's One of my neighbors, a little bit crazy. This guy is a computer programmer. I worked with him as a computer programmer many years ago, or her. And I thought this guy, he's probably 3 or 4 years older than me. And I thought he was just really well off. He's in a 6,500, 7,000 square foot house. He was asking me what was going on in my life, and I was telling him about this 6 months ago, and he said, Joe, man, I got to be your first customer. I need something in my basement because I can't afford to stay here.

Wow.

I didn't realize that. And he's got a 7— 2 people in a 7,000-square-foot house. I mean, that's a waste of space. You know, it's just bad management. But so it's a little bit surprising. There's people you wouldn't guess that would be interested in this. of a program. Uh, but, uh, anyhow, we're pretty excited about this. So, uh, what we're looking for, what size we're looking for, a 2-bed, 2-bath. We don't want to turn it into a 5-bedroom place that's going to have 70 people living there. Um, it's, uh, we're looking somewhere in the 800-square-foot kind of space. We don't want to— we talked about selling, cash flow.

So can you share that cash flow? So, from what you said previously, I was under the impression that all the cash flow went to fulfill the bond in the first 10 years. But is there an excess cash flow?

Right, there can be an excess cash flow depending on how much it costs for the ADU. If the ADU is— if there was already an external access, then that's going to cut the price by easily $10,000. If it turns out that the ADU only costs $30,000 to $40,000 to bring up to code, Or whatever, though. And I've got some numbers, but I'd have to go back over them again because I did— about $70,000 is the break-even, right? About $70,000 is about $100 a month positive cash flow. Anything below $70,000 would be more than $100 cash flow.

So, so they will potentially get cash flow the first 10 years. It's just after 10 years they don't. That's completely right.

And, and as the rents go up for that 10-year period of time, Because we'll, we'll put the rents up. It'll still be affordable housing, but we're going to take the rents up as the rents can be afforded to go up. Those increases go to the homeowner. So if it starts out at $100, it may go up to $120 the next year.

I just don't understand the AHA thing again. So you said it's an interlocal agreement?

It is.

So is that effectively a nonprofit structure?

Uh, it's a—

or is it a for-profit?

It's a non— it's a nonprofit, I guess. It's a governmental entity. It's an entity of the state. It's registered with the state. And it's created through—

So it's not managed to increase profits. It's managed to operate the entity, right?

Right, right, right.

Exactly right.

It's a political subdivision of the state. We've structured it so that this is an investment. In terms of real estate, anyone that we partner will instantly get equity once we complete it, would get a regular, you know, small amount of the cash flow of the rent. And then at the end, anyone that partnered with us would have a fully formed rental property on their home with no cost to them.

So they could still have it managed by us if everything was going great and they loved it and the bonds paid off. Then whatever was going to the bond goes to them as cash flow.

So we can use a management fee or something?

Yeah, yeah, just a management fee, ongoing management fee. And it would just be whatever the market made sense for the management fee at that point. One thing that's interesting, we've talked to several housing authorities early on when we were trying to put this together. We thought there'd be kind of an agglomeration of housing authorities that would do this. The boards of the housing authorities said, look, we've got enough on our plate. Uh, we, we don't want to put more on our plate. And so, um, that's how we ended up being kind of a separate, uh, entity. Uh, so, but just, uh, last week— was that just last week?

Yeah.

Uh, bunch of the housing authorities were in a meeting. This was presented by, um— I mean, frankly, I was out babysitting, uh, grandkids, so I, I wasn't aware of it.

Andy Fields.

Yeah, Andy Fields from Weber presented it, and she said all the housing authorities across the state are really excited about it and stuff. They're excited because they can put some of their clients in. As we've been talking to the housing authorities, we said, look, this would be something your clients can apply for, but they have to be kind of— because they're going into people's homes, they have to be The top-notch. We can't have anyone have substance abuse issues or mental health issues. Has to be top-notch stuff on there.

So, so how do you, um, how do you find those, that customer base? Do you have a data pool?

How do you go about—

this is really interesting out-of-the-box thinking.

Yeah, it's—

Um, but how do you—

I mean, that seems like that could get really complicated. Actually, no. So our, our plan is to partner directly with home builders and some of the local contractors here. And we've spent the last— this is not a— this is new in this conversation. We've been working at this for the last 2 and a half years. So, I have isolated the type of marketing you need to do to find the folks within Springville, throughout Utah County. And based on our conversations and the sampling we've done with the builders in the area, there is a— there's more than enough of a flow of leads for folks that fit the right demographic for us to build.

So, Jeff, you talked about leads for people who want to do ADUs. You talk about leads for people who rent these—

people who rent those. I think it would be easy on the side of finding people that want to do it, I would assume.

Let me just speak to that for a second on the people that want— I didn't know when I first started this, I didn't know if there would be a demand. I mean, it seemed like there would be, but I went to one of these general contractors and said, look, you got probably a dead lead pool that people didn't buy. Can I— would you mind if I just called into that dead lead pool? I called the first 10 people that I got hold of. And literally, and this is, this is not an exaggeration, this is exactly 9 of the people said yes. 1 person said, I finished my basement with somebody else. The other 9 people said, yes, I'd be interested. And 1 of the people said, and my mom in American Fork would like to do this too, I think. And so out of the first 10 people, there were 10 people who said, yes, I'd like to. Now, would they do it? Maybe 3 of the 10 would actually do it, sign a 10-year lease.

But The need was enough for that.

Yeah, yeah, that's right. So, so, but the renters though, that's the— I mean, frankly, it's going to be slightly below market rents. So we think that it's going to be pretty easy to fill the units. And we'll work with housing authorities as well. You know, some of the people that they have that they know that are quality people that would pay the rent on time. So, uh, I don't see that there's going to be any problem at all finding renters for this.

I mean, it seems like you would— I mean, to manage like this, like from a property management standpoint, for any type of real estate, you can ratchet up the qualification or you can ratchet down the qualification. So, right, it's the effectiveness of your property management, but there's plenty of data out there to get to screen through anything.

That's right.

Do you see it being a family or unrelated. You're doing 2 bedrooms, 2 baths, right? So what do you see your tenants being, your demographic?

Uh, we would anticipate probably a younger family or an aged parent or something. Could be that it's aged parent goes there, a senior couple, but generally it's going to be— down south they're wanting to do, uh, the casitas, and that'd make more sense for an aged parent in a see the situation where they didn't have stairs.

But I, I envision folks like, you know, my wife's friends, where you're 2 teachers, one at Orem High School, the other at Mountain View, they just had a baby. They can't, as I said, they cannot live here. They cannot afford to live here and work here. And that 2-bedroom, 2-bath for a family starting out like that, $80,000 to $90,000 a year. That makes a lot of sense for a young professional.

The cool thing is, is that for some people, it'll make it possible for them to buy a house because the basement will be— they'll get a little bit of a cash flow depending on what's necessary to finish out the basement. They may have enough cash flow to be able to afford a house that they couldn't afford to buy in the first place. So it's going to help the homeowners and help the renters. That'll be— it'll build a community. In my neighborhood right now, I've got a reasonably sized house, it's 4,200 square feet, but I finished off the basement and there's a young family living there. I love having them there, it's, it's great. And there's a bunch of homes in my neighborhood that don't have finished basements. And tumbleweeds, not quite as bad as they were out at Eagle Mountain the other day. I mean, there's tumbleweeds Because there's no kids in the neighborhood, you know, it's just, it's quiet. It's, it's a waste of space on some of those big homes. So, so how does a city get involved? Well, there's an interlocal agreement that can be signed. There's a resolution that the city council would have to pass to authorize the mayor to sign the interlocal to join. There is no risk. We've, we've built this in such a way that the members have no risk. The bonds are not, uh, the, uh, obligations of the members. It's, uh, the bonds are based only on the income that comes from that revenue from the Tendermaster lease. Uh, and we've had many attorneys look over this stuff and have come across the, uh, feeling like there's no risk involved for the members.

So, uh, why, why Does the city have to be a member? I mean, you can do it without that, right?

Well, we would love to have the city be a member because, I mean, frankly, we've got some pretty good ideas, but there's going to be things that can come up that are specific for your community or other ideas that come up that we may be able to bring more on board. It may, it may make sense. There may be ways to reach out to your citizens that we're not aware of. That, uh, one community said— asked if they could put it out in their, um, utility newsletter, put something out in their, uh, newsletter or utility bill.

Is there any liability to the city or the member?

Uh, liability for anything?

Yeah, for anything.

No, there's no liability. There's— it's, it's been built that there is no liability for the bonds in any way. And there, I can't see any liability anyway.

No, we want your input. We want to participate. We, we created this so that this would be a community, right? And everyone in this room has influence and insight into how we can progress, how we can make this available to your constituents. So we're looking for a partnership where there isn't liability, as Joe said, but we definitely want to be with you. We want you on our board. We want to collaborate with the other municipalities we're working with so that we can make this more readily available, or more— at least more folks aware.

There would have to be a way for liability to stop as far as Make them— like, the house gets rented, something's done wrong, somebody in the house living in the basement gets hurt, whatever.

And so there's deep pockets, so there'd have to be liability protection for them. That's right. Yeah, there is additional— that's part of that situation. There has to be additional insurance put in, and that's been plugged into the calculations, additional insurance in place.

Is your construction— is it contained to within the 4 walls of the building? So if there was a need for additional parking, um, in order for that to work in a neighborhood, would you be involved in pouring a cement pad?

Yeah, yeah, if it makes sense. If that can make sense, I mean, that's an additional $10,000 for the concrete pads. So if it makes sense, then we Do that. Otherwise, if they've got some other— like I said, there's, there's a point where it doesn't make sense. We don't want to get a negative cash flow from home. So it's just, it needs to be as well. What we would like is to have at least $100 a month. So it doesn't feel like they're, you know, so they're getting something out of it along the way.

So, you know, the buzzword Is affordable housing.

And I see this as affordable to the homeowner because I don't have to pay anything for 10 years. But is it really going to be affordable? Because it's going to be rent, it's going to be market-driven.

So, you know, if the going rate for a 1-bedroom or 2-bedroom is $1,500, it's going to be $1,500.

So is that affordable is the question, right? Going to be in that circumstance will likely be about $1,400. The numbers that we've done is just we've tried to knock it down so that it's a little bit below Market. But is it affordable? No, it's not going to be.

I mean, you're just adding more— you're adding a dwelling so somebody could live there in Orem, but it's not going to be affordable in a sense.

It's going to be $800. I mean, if you can—

if you want to rent it to my daughter, but I have—

I, I had this plan, she got to pay $1,400 for a little money. That's right, that's right. I mean, it has to cover the cost of the property.

I mean, I think it's a great program.

I just think we're— I think we're getting like, hey, this is going to be affordable. It's affordable for the homeowner because I think I don't have to pay for 10 years, but it's just another place to live, which could be another $1,100 or $1,400.

And, and a reduced cost off the market.

Right, right. It— right, right. And over time, I mean, if it turns out— I mean, Zion's, uh, public finance believes that this has the Potential to do potentially in Utah thousands down the road, thousands of ADUs could be paid for this way. And if that happens, that'll create a little bit of a blip in the market and bring, you know, bring more supply on board. So it's not something that'll happen drastically, but it's not going to be— No, I think it's a great, great idea.

And I just think, you know, the buzzword affordable, it's like, You have to be realistic. Yeah, but I think it's a good avenue for somebody to be able to afford an ADU in their basement.

But it's still going to be—

if you want positive cash flow, you're still going to have to charge market value.

That's right. Real policy. I mean, that's right. That's— I think it's a good— it's a great idea. It's just another avenue thinking outside the box.

Right.

And as far as to expand that idea on affordability, it— I mean, you're not going down that path, but you could Ultimately go down that path a bit because you, you're locking in that cost, you're locking it into a bond. So the only excess would go to the homeowner.

Right, right.

So, to the extent that if you were to create— I think you stick with this model, but if you were to create something else that was designed to be affordable housing, then you'd have a diminished amount going out to the homeowner over time, and it would get cheaper because you'd have this set bond fixed.

Right.

You'd have your long-term costs and there'd be a margin there that would be a savings to the homeowner. Yeah, but it's, it's a, it's a different model, but it would work.

But if you're having positive cash flow, you could say as a homeowner, you know, let's, let's give it to the rent.

So instead of $1,400, it's $1,300.

Yeah, then it's affordable.

So that's what I'm saying.

You have to be a partnership towards affordability.

You would chop that down.

This is, this is exactly the kind of thing that we're looking for, to have somebody on board, have, have you guys join, you know, have a member here join, uh, our board so we have these kind of discussions to say, listen, how can we, how can we stretch this to make this into something really cool additional?

I mean, I like—

So do you do that in your contract with the homeowner? Because they would need to forego that income in order to make the apartment affordable.

No doubt, that's right.

It's, it's, it's a different model, but it's, but it's possible model. Some, some may want to do that.

Some may want to create affordable housing and use their home as the basis for it.

And that could be—

I mean, it's paid for in 10 years, so—

Yes.

Yeah, exactly.

I imagine as we get going and see how this works, you'll be able to make more educated decisions about, you know, new approaches or best practices.

Right, that's exactly right. And, and like I said, that's the reason we want additional members so we can brainstorm these ideas.

Yeah. Have you—

I hate to even ask this question, but it's like tax Property tax increase? Well, property tax, uh, tax benefits, tax breaks for the homeowner.

Um, they'll have tax breaks, um, and they'll have increased property taxes. Uh, it'll be about $25 a month for an increased, uh, property tax based on the numbers that I ran. And I actually used it, uh, in full, the numbers in full Was about $25 a month, and the cost of insurance from homeowner insurance increased about $25.

So we're going to need to wrap up. Any other questions?

I have one question.

Is this something you would do in Orem without Orem's official involvement?

I mean, their local agreement?

Is this— Sure, we would. We'd love to do it everywhere, and it's possible. We would love to have you. We'd love to have you join as a member, but it would just— the only requirement is to have somebody assigned to go to a quarterly board meeting and authorize the bonds. But potentially it would be somebody that we could just brainstorm ideas with, take input from the community as well.

But if we elected not to sign the interlocal agreement, for example, that wouldn't stop it from still being here.

I think, I think we need to look at it.

Looks really interesting.

Okay, thank you.

Thank you.

Let's go to item number 5.

HR annual report and budget for fiscal year '25 compensation.

Okay, um, we have Amy Peterson with us today. She's the HR manager for the city. Um, she'll be giving us, uh, the annual report. So this is the 2023 end of year report for human resources. Thank you for giving me the opportunity to share with you some of the accomplishments that our division has been able to do this last year. Um, we've had quite a bit of, um, some changes in our office with staffing, and in the last month or so, and we reached out to Pete and his team to help us come up with a, a fun way to introduce the new team to city employees and kind of inform them of what the area of focus of each employee is. And as usual, Pete did not disappoint. And after I asked him to help me, he came back within an hour and had a '90s-inspired Full House idea. So it turned out great. So we just want to share that with you first before we jump into the presentation.

Sure.

We hope that shows employees that we're a friendly, inviting place to come into. Um, so let's—

One more time?

Okay, I need to watch it twice. Um, so this slide, um, just shows how many employees that we have. Um, the city currently has just over 1,100 employees. 469 of those are full-time and just over 600 are part-time. You can see the breakdown of full-time employees there as well. Police, fire, and public works make up about 70% of our full-time employees. We have a lot of accomplishments from last year, but 4 of the biggest ones are listed here. We implemented in July our new paid time off program. Which allows employees to accrue paid time off more quickly, and they can also cash out any extra hours annually at 50 cents on the dollar. This new program illustrates the city's commitment to promoting work-life balance and employee well-being. Current employees have the option to opt into the program or stick with the traditional sick and vacation time. 38% elected to enroll in the new program. And we will have annually an elect opt-in period in November where more can join. And we were excited to see about an additional 35 joined in November. But all of our new hires are automatically put into the new time-off program. We also implemented our new HR portal. We've spent the last little over a year working with our IT division to build a new onboarding and recruiting software. We started the recruitment portion of it several months ago. It has automated the application process, the screening, the interview reviews, and just a few weeks ago we implemented the onboarding feature. So it's automating the entire onboarding process for the employee, which we've run into a few little minor bugs, but overall I think it's going to be a really nice feature for our new hires. Really sets a better tone and image of the city than the way we were doing it before. As you know, we of course did the employee engagement survey and we had overwhelming participation with that. We are still using the feedback. Jenica and her innovations team is still reviewing some of the feedback we got from the survey, and we are— have implemented some changes already and more coming as well. This year, we also started our employee Babbel store. It's an incentive program that rewards employees for building a better Orem. They earn Babbel Bucks that they can turn into a store and purchase city swag items. And part of the group that Jennifer met with after the engagement survey, employees mentioned that they wanted to have a way where they could recognize their peers, not just supervisors handing out babble books. So about 2 months ago, we started the peer-to-peer babble books where employees can go online, write something nice about a peer coworker, and then we send them a certificate with their babble book and let them know what the employee has to say about them. Recruitment and retention. Um, last year the city hired 313 employees. Uh, 57 were full-time, 256 were part-time. When we pulled these numbers together for this presentation, I realized why it felt like we had been so busy last year when I saw those numbers. Um, that's a lot of, of new employees to run through our office. Um, over 55% of our, uh, full-time employees have joined our— joined the city in the last 5 years. Um, with our proactive compensation incentives, excellent benefits, employee engagement programs, and positive work culture, we are confident in our ability to retain a large number of those employees. As far as turnover goes, during 2023, we had 60 full-time employees leave employment at the city. The Bureau of Labor Statistics reported an annual turnover rate of 18.9% in 2023 for state and local government. The city of Orem sits comfortably under that average with an annual turnover rate of 13.2%. Which is also significantly less than 2 years prior. '22 was 18.9% and 2021 was 18.1%. One item to note on this slide is the resignations where it says '22. The majority of those are employees who were falling short of performance expectations and resigned in lieu of termination.

You gotta read the quote.

Huh?

Yeah, he's bad on the microphone. So Tara Clancy, she did a presentation at our last VAWA Who Listens event that we had, and this is a quote from her that she said during her presentation. Presentation was awesome too.

Oh, good.

If you love your employer and love Oren, you're going to have a successful career. If you have a bad attitude and you don't love Oren, go work for— She had all of her Babel Store swag with her. She had a backpack, she was wearing her socks, she had her Stanley mug. It was a great, great presentation. Um, the city, um, is focused on employee development. It's one of our, our big areas. That we are focusing on right now. Um, the city has awarded 22 employee scholarships over the last 3 years. Uh, 9 of those 22 awardees have been promoted within the organization since receiving that scholarship. Um, in 2024, we'll be issuing 5 more scholarships. Um, the city also offers tuition reimbursement to our full-time employees, and, um, monthly HR puts on some kind of training, whether it's the quarterly BABOs, um, quarterly leadership and management trainings, or even suicide prevention, uh, trainings. Um, so every month HR is doing something to help develop our, our workforce. Maybe have questions about what HR does. They are very busy, tiny but busy office, work hard and play hard.

I have a couple TV episodes if you want them.

Well done.

Amy, one, one thing. Yeah, in terms of the turnover, in terms of our first responders, I'm calculating those in my head on a percentage basis. They were single-digit percent turnover in fire.

Yes, and a majority of those were ones that were leaving the profession altogether. and joining the private workforce. So yeah, really low numbers for the public safety. I think that speaks volumes to HR's ability to change the pay structure, but also each of these leadership administration has really had a very positive work culture, and then also their mental health resources they conduct as well.

Okay, you We've talked in our meetings, but maybe tell these guys as far as just your take on overall. I mean, we talked about it a bit here, but it's a lot better than even the numbers show, I think, as far as the number of people coming in and wanting to stay and not leave, right?

Yeah, I think that it shows, you know, we went from 18-something percent turnover to under 13 this last year, and we did have a lot of people retire. A lot of long-term employees retired in the last, uh, in 2023. So yes, I do think that a lot of the structural changes that we've made, um, citywide and then also in departments have had a big impact.

Just as far as making Orem a destination, people want to come here, less people are leaving.

Who would, who would not want to come here?

Right?

I mean, to that point, we just met with one of our employees that left last May. For, um, South Salt Lake, $97,000 salary, and he wants to come back. And so 3 of our 5 have returned, if we want to get back.

So our numbers are really low.

That's awesome.

Which speaks to compensation and culture.

Correct.

Chief Adams has had a number of employees who left, came back in the last year as well.

Yeah, good, good job.

Thank you.

Excuse me.

Okay, now I'm just going to take a few minutes to talk about compensation, kind of things that we've done over the past several years as well as what we are hoping and planning to do for the upcoming new fiscal year. So just to give you an overview, these are some of the major things that we've done to change our compensation program over the last 5 years or so. Before this time, it was kind of just traditional, everyone in the merit market system, but we've made a lot of significant changes to adjust that and be more responsive to the market for different employee groups. So in 2018, we started by implementing the Public Safety Career Ladder Program. And so this is for our entry-level police officers and firefighters. It created a career path for them to advance from Police Officer 1 to 2 to 3, and then the same for firefighter paramedics, so that they're able to advance through their pay range more quickly as well as It benefits the city because in order to advance from one level to the next, they have to meet certain requirements, certifications, trainings. So it incentivizes the employee and it rewards the city by getting better trained and well-compensated employees. So in 2020, we expanded that into not just a career ladder, but what we called a hybrid STEP program. So if you look at other agencies, a lot of them have just a traditional STEP where If you're a 1-year police officer, this is your pay. And then every year you get a compensation adjustment. So we combine that with our career ladder program to show that, that when you're a police officer with 2 years of experience, this is what you'll have. Again, you can advance through the career ladder. We extended that all the way up through the ranks, all the way through lieutenant for police, and then through battalion chief for fire. There have been adjustments made to it since then, but that's when we started the entire department. In 2021, we completed an external compensation study with NFP, and we implemented a lot of different targeted market adjustments based on that study. One of the recommendations was to expand that hybrid step program. We saw how successful it was in police and fire for recruitment and retention. So we expanded that to public works for certain positions, entry-level positions. We've continued that. Last year, we were able to roll that out to almost all positions in public works under division manager, as well as other positions. Every department in the city has positions now that are in the hybrid step program. And again, we've seen how beneficial that is for recruitment and retention. We're able to start positions a lot higher. They can advance through the range more quickly. Before the hybrid step program, they had a range that's about 50% wide, and they could be here for 30 years and never see the top of their range. And now they are able to come here, know what they're going to be able to make as long as they do their certifications and training, and advance through the range much more quickly. Um, we've also made an effort to proactively look at the market, not just do it every 5 years with an external review, but make sure we are looking at this internally. And right now we're doing it twice a year, that we look as we're preparing for the budget, and then we also look after the budget season has finished, and we're looking at what other agencies did So we look at every single position and where we stand in relation to the market. Oh, one thing I forgot to mention was in conjunction with that, we did remove the grade system last year. So if you're familiar with that, we had positions in the merit system were in grades and they were grade grouped together. So for example, there would be 10 positions in grade 10. If we wanted to change one position, we had to change all of them. But as we removed the grades, now we can make those targeted adjustments by position. So this is what we have done over the past several years in relation to merit and market increases. Merit reflects positions that are still in the merit system instead of the hybrid step. Um, the 4 positions that are in the hybrid step, the standard increase is usually a 3%. They may get more if they are advancing from one level to the next. And there are certain that are a little bit less, but 99% of them, it's a 3% step that they'll get on their anniversary. And then the market increase has varied based on what we see the external market doing. And as you'll see, over the past few years, we've gone away from global market increases to making it much more targeted and looking at where we need to focus that. Are our sworn officers— do they need it more this year? Or our firefighters or public works. How can we make sure that we're being effective and strategic about how we're allocating those compensation increases? So I'll talk—

You just put the money in.

One thing I wanted to say about that is that the market has been really volatile lately, Especially for targeted positions in certain cities. So by removing those grades, we can target those volatile positions to make sure that we're being more proactive in the market rather than the entire group of positions that were in that grade band. So we can do that more fiscally responsibly.

So I'll talk a little bit more about this in a bit, but for this upcoming year, we are planning and budgeting that we can do the standard 3% merit increase for positions left in the merit program. And then market increases are just very variable based on the position. So there's not a great number to put up here. Some positions are doing very well in the market, and we don't necessarily need to make an adjustment. And there's others that are lagging behind. And so we are targeting the funds that could have— would have gone to a global market increase to those positions that need it most. So in terms of where we stand in relation to sister cities, I have both what they did last year is what they're, as well as what they are proposing. As you'll see, most cities, it's kind of a game of chicken. They don't want to say what they're doing yet, or they don't know because they're waiting for final or more sales tax numbers to come in. And they're also waiting to see what other cities are doing. And we're in the same boat as everybody else. If you look last year, the average for these sister cities was about over 6.5%, but There are some outliers like Sandy. They passed, I believe, about a 14% property tax increase last year to go towards this as well as other things. That's why theirs is so high. But if you take them out, we're kind of in the middle of what other cities did. Last year we did a 2% market for general employees and the police department. We did more significant changes to other positions that we put in hybrid step programs as well as fire department was more than that for most positions.

Mm-hmm.

And we— but from what we have seen for cities, these ones, and as well as smaller cities that I've heard back from, most of them are expecting to do a little bit less this year than they have done last year or previous years, just as the market is taming a bit. So in terms of what we have done and what we are doing, Again, we do a market study, and we did that for every position in the city to look at sister cities and where we stand in relation to that. We are wanting to expand the hybrid step programs throughout the city. So we have it for so many positions now, but there are still so many more that can benefit. So we are proposing to add almost all positions below the division manager level to that hybrid step program. And again, that assists in recruitment and retention. It also resolves compression where before In the merit system, you could have an employee who's here for 20 years, a brand new employee comes in and is already making as much as them. But now they'll be set at where they come in unless they have external experience, of course. It also ensures pay equity between supervisors. We try to get rid of the overlap between positions. So it ensures pay equity throughout the organization and as well as across departments. And again, targeted market adjustments, very variable for different positions and groups. Merit, the standard up to 3% merit increases for positions that will not be in the hybrid step programs, and funding the step and/or career ladder increases for positions that will be left in hybrid step programs. So any questions?

If I can say, as someone who's been here, as we've gone through this transformation in how we budget for it and plan and recommend compensation increases, what has really, I think, kind of made it work, what's been kind of the magic, we've set ourselves as more continual and more specific and detailed market analysis. Really, without them, that extra work, that extra attention to detail that Jenica, Carrie, and their team provide, I don't think that we'd be able to achieve success in volume. So continuing to do that will help make sure that we can keep this new program going.

Thank you, Brad.

Any other questions?

I think you're good. You guys are doing a great job.

Thank you.

Okay, we're down to item number 6, but I think, um, I think a 5-minute break and just grab some food. Uh, we'll have a bus come through, volunteer for that.

Our beloved Father in Heaven, we're so grateful for the opportunity we have coming together today to discuss the important needs and objectives of our city. We're grateful for the opportunity we have to partake of this meal. Pray that thou will bless it, that it will give our bodies the strength that we need, and we can use that strength in serving thee and those around us. These favors and blessings we pray for in the name of thy Son, Jesus Christ.

Let me see them.

I can't believe I have to convince you to take free swabs.

Okay, I'll take them. Where'd you get that hat? What did it say?

It said Nelson.

Is that like a battle?

You say Nelson Farm?

Uh-huh.

We got them for Christmas one year.

That's awesome.

My dad grew up on a farm.

So you come by it honestly?

I grew up on a farm.

That's cool. I should say grew up hauling hay. We didn't have any cows or anything like that.

Well, some people like, you know, don't call a ranch a farm. That's very offensive.

But I did drive a tractor, irrigated a lot of properties. I tell people about as a 10-year-old sleeping out in my grandpa's Econoline van out in the middle of a field overnight. I don't think that would happen nowadays. All right, let's resume our meeting.

Uh, we're up with item 6.0. Brandon gonna do a, uh, a presentation on our fiscal year 2025.

It is Just because that was enough.

Yeah, '25, bro.

That's the '24.

I know, it's here to confuse you.

You're trying to confuse me.

Messing with us.

We can't know what we're going to do in '25 without knowing where we are in '24.

So Brandon's going to talk about whatever he would like. Wow.

And, uh, we'll move forward.

I, I want to wrap up. Probably just have like the half hour.

We'll try to be quick. Yeah. Okay.

So as I mentioned, we'll, we'll start with kind of where we are with '24 so you have some idea as to, um, what— why we're using numbers that we are, um, proposing for our fiscal '25 budget. So you can see on the left column where our current budget is. The actually where we are year to date. The percent collected is just to give you an idea of— these are all generally through the February reporting period, so it gives you an idea just how we collect certain revenues throughout the year, right? So sales taxes, we're only about halfway through the year, whereas other, other items Are significantly further along, as you can see at the bottom with interest payments. Far right column just gives you an idea comparatively at the same time period a year ago, how we compare to that time period. So keep in mind, we are— we were looking at approximately a $5.2 million transfer of reserves from our general fund to our CIP fund. So you kind of have an idea as to, you know, where we sit in relation to that fiscal '23, um, comparison. Uh, you'll notice, obviously you've heard much about sales taxes and where we sit with that. Um, just so you're aware, that 2.6, um, negative equates to, um, approximately $425,000 So we're approximately that far behind in relation to sales taxes at this point. Interest earnings is, you know, $34.9 million ahead. What does that mean? Well, that's approximately, you know, about $200,000. I want to think, if I remember correctly, about $200,000 ahead of where we were the prior year. So, just that's just for reflection and to be able to, you know, questions as you potentially look through that is to say, hey, wondering about this particular thing. Just to give you an idea of how those in relation to these are in relation to those major revenue sources. Sales taxes, not all, so sales taxes makes up 56.3%. Of all of those major revenues that we listed on that prior slide. Overall, sales taxes represent approximately 39% of all general fund revenues. Property taxes, while it makes a bigger portion of the major revenues, it's approximately 9— 9.2% of all revenues of the general fund. But again, just kind of gives you an idea. Our other major revenues in relation to other funds, uh, B&C road levy, hair taxes, transportation, water, water reclamation, etc. Uh, these are the other major funds that the city— that, uh, we operate. Um, and it kind of gives you again a similar idea of where we sit currently, how far along in the year we are in relation to Collection of those budgeted revenues and how it compares to the prior year at this given point in time. And again, another representation of what's the makeup of those major other revenues sources as compared to that particular group of revenues. Any questions about any of that in relation to fiscal '24 before we start diving into Our budget, what we are proposing is our budgeted revenues for fiscal year—

Is your CARE down because sales tax fell?

Say again?

The last slide, CARE, it's down because our sales tax—

Yes, both that and the transportation sales tax are both obviously based on sales taxes. If regular sales tax is down, you can most assuredly bet that these are going to be down as well.

So those are, those are the most affected?

Yes, those 3 are all sales tax based. So I forgot to mention, this is the best thing about Orem right here.

Your golf course?

Golf course is a 2.

They're one and the same.

That's hole number 1, by the way, in case you're wondering.

Okay.

So looking at our fiscal '25 budget, the current fiscal '24 budget on the left, what we are proposing on the right. Sales taxes. I don't have any warm fuzzies about where sales taxes are going. I don't believe they're necessarily in a freefall by any means, but they certainly are stagnant. And stagnant means $32 million. $32 million is the amount of sales tax we actually receive. In fiscal '23. So obviously, when we were in fiscal '23 doing our fiscal '24 budget, we had some, you know, positive outlook with where sales taxes were going. That is, since that time, it has been not a downward trend. So we feel pretty comfortable in budgeting the same place we ended up in fiscal '23. which is at that $32 million mark. Obviously, that's a $1.5 million nugget we have to crack in relation to our, our budget. Uh, franchise taxes, part of that nugget, if you will. Uh, we've been budgeting very conservatively in franchise taxes. Franchise taxes consist of what Rocky Mountain Power pays us, what Dominion pays us, what telephone companies and/or internet companies pay us, What Comcast pays us, and what we collect, if you will, internally from our own enterprise funds. The biggest one of all of those elements that has impacted franchise taxes the most— if you were thinking about your utility bill, which one would you guess?

So you didn't know you're gonna get a quiz today, right? It's a good guess, but natural gas.

I don't know if you recall last year, natural gas prices Went skyrockets. Those have not— while they have leveled, they have not necessarily declined. So we're now proposing to raise what our franchise tax level, what we're budgeting for revenues, based on the thinking that those are going to continue to stay, at least stay at that level amount of revenue from that source. Ambulance, if you'll go to the 4th one from the bottom. Various changes have been made, not only from our standpoint of billing, but also from the standpoint of who's doing our billing. We transferred our billing services to Gold Cross here locally, and that has produced a little bit better revenue stream from a collection standpoint. And so again, we've budgeted relatively conservatively in the past because of various reasons, but we feel pretty confident in where we are, where we are at in the current fiscal year and how we're collecting, and that that will translate into the following fiscal year. And then the really one of the last bigger items on here, we're also focused on as far as you know, that nugget we're trying to cover with sales taxes is the interest earnings at the very bottom. Interest earnings over the year of fiscal '23 went from approximately 1.25 at the beginning of that fiscal year to approximately 4.25 by the end of that fiscal year. Currently they are at 5.25. At this point, we— while we don't see an increase, anticipate an increase in those earnings, we have been budgeting again, thinking that along the way the feds were going to cut the rates at some point during this current fiscal year. That has not happened, and we do not anticipate that happening.

While they—

we do anticipate the feds may cut rates in the upcoming year. The $3.7 million you see there is still a conservative number for interest rates. So we have some room to work with if the Feds do cut rates, and thus our interest earnings on our investment do decline slightly. So, so those are some of the big nuggets in relation to the general fund. Any questions about any of those particular things?

What about Property tax, why are they down so much?

So I will admit property taxes in fiscal '23, we saw a huge increase in our property tax revenue from various properties that were developed. We anticipated that we would continue on that course and that those property tax revenues for those growth would continue and grow. That has not come to fruition. So Obviously now, and what we did is we budgeted some contingency thinking in case that didn't occur, in case that property tax growth did not occur. We budgeted for that in a contingency account that has not been spent. So in reality, what we could do is remove the contingency and decrease the property tax, and we would be no worse for wear. Well, we're just eliminating Both the contingency element as well as the revenue.

So '24, that was a budgeted item, not an actual item?

Correct.

And so the actual would have been closer to that 7.7 number, which is— we didn't lose anything. We changed our budget forecast.

It's changing, correct?

Okay.

Yep. Yeah, I can figure out how they just went away.

Yes, if that makes sense.

And so while we were aggressive in that number, we were also conservative because we placed much of that increase in a contingency account, you know, just in case. So any other questions?

Great.

Also talking about trying to, you know, we've had some discussions, several of you haven't been part of those discussions yet, in relation to sales tax revenue bonds. We're looking for funding of the new firefighter training facility as well as remodel of the Public Safety Building. So as part of that, I wanted to bring up this slide in relation to a— the UIA/Utopia reimbursement we receive each year. For fiscal '24, we budgeted $510,600, which you can see there. We expect to receive $920,000. In talking with the Utopia folks, the anticipated amount that we we expect— would expect— that's, that's how we got the $920,000, is in talking with them. We expect that that number is not only going to stay the same but also potentially increase in the year ahead. And we kind of asked them about that as well. So that, that delta between that, what we have been budgeting at $510,000 versus what we expect to receive in whichever number you want to look at, either $920,000 or the $960,000 that $400,000-ish would be what would cover a large portion, 2/3 of what we would expect from a bonding scenario in relation to bonding for those facilities that I just mentioned. So that's why I wanted to bring this particular thing to your attention. Not only that, but you may or may not know how much we've been receiving.

From them.

And so I wanted to also highlight that, that they are actually providing us with some additional funding back. Any questions in relation to that?

New change?

Why 126% jump?

Does that have to do with the buildout?

So that was the year they decided to start really— quite honestly, I think they got a lot of pressure from cities as they were starting to make money.

Okay, nice.

So they really upped the ante.

That particular year. Which they've maintained.

Which, yes, they— and I think that was part of also is that the same, hey, if you're really doing as well as you keep telling us you're doing, let's see the dough, number one. And number two, can you commit to continuing in that fashion? And as you can tell that they made an effort to continue to do that.

So should we put up more pressure?

If they keep doing well, right?

I mean, you learn about difference.

That's right.

Originally, the reimbursement was— you may or may not know, um, our payment goes up, um, 3% a year. And originally, the amount they were going to cover that increase as we went along each year. So they are now doing more than just that increase.

So it doesn't go up like 5% or something?

It's a straight through all the way to 2040. All the way to 2040. Okay, great.

As far as what our pledge— what the city has pledged to as far as sales tax.

So we can thank Council Member Radomski for, you know, representing Orem on that UIA board and making sure that—

Putting on the stem screws there.

Well, there have been some times when there have been financial discussions, and we said, well, you know, the cities would like to be— we'd like to have that money sent back to us sooner rather than later.

So I, I think you realize they have an interest in that. They're obviously—

And interestingly enough, in that fiscal '23 year, um, that was also the year where they were able to bond bond without any bond, with their own revenue sources being the pledge behind those bonds, instead of having to rely on any of the participating cities as far as pledging anything against.

So, so that was another reason why, right?

So that made a big difference as well. You know, cemetery rates always seem to be Rate of notice, that's of particular interest within the general fund because it's one of the only rates, revenue sources within the general fund that, that is a rate that, so to speak, we set. Most of the other revenue within the general fund are either somewhat immaterial, or we don't, generally speaking, control a lot of that revenue, i.e., sales taxes and franchise taxes, property taxes, sort of on the part. So that's why I bring this slide up is just, just so you can kind of see what the rate has been here in fiscal '24 and what is being proposed. You'll notice the 3.5%. And you will see that percentage show up a lot within the remainder of the presentation. That's kind of what we pegged as, if you will, a CPI rate. We realized the rate may Depending on your source of which CPI rate you want to pick, maybe slightly higher or slightly lower than that. So we kind of targeted into that range. And you'll notice we continue to have a difference between the upper, the older upper cemetery rates, as well as the newer lower cemetery rates as well.

Is that—

why is that? Is that desirable or is it just the way it worked out?

Demand, right? Demand, trying to maybe push some of the demand into the upper cemetery to try to get it filled up by offering a slightly lower rate there, um, because everybody wants to be in the lower cemetery. Oh, yes, Chris would have to answer that. You know, at the— I don't know when we created that, but I think it was at the request of the city council a couple years And we, we contemplated doing that, and then there was some concern about maybe we needed to moderate, um, those that would want to be going down to the lower area because it appeared to be highly desirable.

There was also concern that there would be a lot of people that would transfer their burial rights from the upper cemetery where there's nobody interred to the lower cemetery. Um, and so those—

we just went on the edge of that.

Okay. I think that was the concern from this council and students.

We can certainly reevaluate that.

I would say reevaluate it based off of has that effort worked or not. I will say that I'm, I'm really shocked at how many people are purchasing in the lower cemetery. I don't think it's deterring so much. There have been a lot of burials in the lower cemetery since we opened it a few years ago. I didn't think it would come on so quickly and throughout the whole area as quickly as it has.

Do we know what percentage of the cemetery is available? We do.

I don't have the number readily available.

I can get that for you.

Just, I think that we're in terms of Burials, I don't have that number, but in terms of actual, uh, burial rights, I think we're at like 95% sold. Not meaning that, that there's physical bonds there, but that they've been sold and reserved. That's why we opened over 7/3 of the media. We waited as long as we could.

Okay, moving along. Other major revenue sources, um, again, budget, current budget, and, uh, what we are proposing as part of the tentative budget. Uh, as we mentioned, CARES and transportation sales taxes— if we're going to budget sales tax, regular sales taxes lower, should expect that those are also going to be lower in regards to that. Um, we'll have a discussion here a little bit just after this on rates, uh, which affect the water revenue, all of the enterprise funds. So you'll see that. And then a discussion about the street lighting, the other ones also at the bottom. In relation to water, the water fund proposed rates, the Tier 1, which is obviously the most used, is we are proposing to go in the 3.5% from $0.85 to $0.88. And then the various changes here that are being proposed. Down at the bottom, you see the base rate, the 3/4 meter and the 1-inch meter, which are the 2 most popular meters in the city. There are obviously changes to the other sizes as well, but these, again, sort of most popular, so we kind of show those. You can see the proposed rate increases for those as well. Uh, there's— we've had some meetings with you and discussed sewer rates. Uh, this reflects those, uh, discussions. You can see the, uh, $4.50 increase in the base rate in relation to that, as well as an increase in the volume charge. Um, that you can see again, that 3.5% increase. Um, That is obviously part of the discussion that we've had in the many meetings that we've been having. And so just know that this is reflective of those meetings. Jen, I think you're the—

oh, and Mayor, you're the only 2 who haven't been yet. And so we'll give you a great deal of background at the meeting that we'll have soon.

Stormwater, similar increase in relation to That rate, made $843. Solid waste, which you can note at the bottom, we try to basically pass through the cost that we are getting from Waste Management.

The fee will—

combined fee will go from $1,760 currently to $1,840, which is a 4.5% increase. You can see the effect on each one of those. Green waste, we— I think they in essence eliminated the green waste program specifically, and those cans are now just part of your regular waste. So we elected not to make any change to that particular fee. Street lighting, that's a rather large increase. The intent is to potentially use the street lighting fund as a source for funding the, um, the needs of the Christmas lighting out here that we, we did during this last Christmas. Um, and so proposing to increase that fee to cover the costs of that program on an ongoing— that way they can do it and continue to do it on an ongoing basis, rather than this year where we in essence scrounged together funds to be able to to fund that particular program. Then just to put that all together, we've discussed this table multiple times.

Can you zoom out?

How's that?

Yeah, okay, great.

Thank you.

So item to note, all of those increases that I just discussed are included in this Total. All of the other cities listed here are more than likely— I don't know which one, but more than likely are their previous year's, so fiscal '24 rates that they got approved as part of their fiscal '24 budget. So they may or may not have rate increases. We assume they will, particularly in sewer. And so you can see, even with those proposed rate increases, we still are the lowest within these peer cities and/or local cities in that area.

And our water is so much better.

And your water is—

We'd need to buy more than just 5 cents.

Any questions about any of those up to this point?

Can you just— I'm sure you're going to send out a presentation. Yes, but can you just break out that slide and send it as a separate attachment? Well, certainly, just so we can get it, because I think that's something we all like to make sure everyone knows, and it's always fun to compare.

Best service for the best price.

Right, maybe once they—

once the city put out their New rate, then you can even—

even better. Yes, I was gonna say, as we share that, just really emphasize this is Orange's proposed rates increase are less than everyone else's existing rates.

Is everybody on the same July to July?

Yes, yes, that's right.

We could help.

Yeah, adopt it, see really where we are.

Yeah, send us this one and then send us the updated.

And Brandon, on this, there's a footnote, or little— yeah, right there, there's a 1 and a 2.

Could you include the footnote on that on, on your point of reset? It is there. The 1 and the 2 talks about pressurized— those cities who have pressurized irrigation, and it kind of tells you how the calculation in here, try to get it on a comparable basis, right? Obviously, from a slide perspective, I want it to be as big as possible. So yes, that, that when I send this to you, it'll have what those calculations, what those footnotes are.

Super strips.

Okay, now I tried to verify this, so price You can verify no increases.

That correct?

Okay, Bryce is giving me the thumbs up. I, I put them on here and I double-checked and, uh, I was like, wow, that's impressive.

We're, we're about every 3 years is what we anticipate, uh, as we do our consistent 3% increases.

It'll show up to the residents about every 3 years. Okay. I wanted to go back here real quick, and I will have you notice the recreation revenues. Even with that, they are doing that well, they're proposing an increase of revenues of 10.4%. So to point out how well the recreation center is doing without a price increase. And then this slide, just to give you an idea, obviously there are lots and lots of other fees and charges the city has, which we don't want to take the time here necessarily to talk about, but we will be sending you a fees and charges exhibit that's part of the budget, um, and be sending that to you as soon as we have that entirely finalized so you can review all of those fees. Uh, and the table shows you what the current fee is and what those those fees are. So if you have any questions about any of those fees, once you receive that, um, please feel free to reach out. And you're welcome to reach out to the individual department director, um, or reach out to Bryn or I, and we can obviously pass that along to the appropriate party who knows the answer to that question.

So with that said— oh man, too bad. If I can emphasize that just in terms of process, these these work session presentations are really kind of the beginning of, of the discussion, beginning of the city building process. So, so please, um, take this as, as that. And then if you have questions, comments, conditions, stations, let us know as soon as possible. We can talk through— we want to keep the dialogue going.

Okay, any questions?

That's all I've got. Thank you, Brandon. Yeah, hold on, just, let's get your hand up. Okay, um, item 1, then item 2.

Chris, did you want to report on your Commissions?

So the Orem Fest has a new success. We've got a grand marshal we were looking for, and now kind of a trifecta, right, approach. We— Phil Peters at Princeton, right? We're looking to have the president of UVU be the grand marshal. She's not available, so we have one of the administration, also former military in the administration. So we're going to focus on the Gold Star, the memorial that's coming up, and have all of that kind of be kind of a tie-in. That would be more of a focus on all of those events rather than just one specific. And then learning. So that's the Honor Fest that's going forward. I think One or two more added to the committee. The library, they're, they're implementing all the innovations that are going forward. I don't know anything else you want to add. And just, just generally, their reports are positive that they're implementing everything that's happening. Um, we've discussed and reviewed, once this building goes down, the renovations and 5 tiny And then finally, the historic preservation, they're just in the process of meetings. They don't meet that often, so there's all kinds of discussions. But those are the ones that I've been working on. Okay.

And then you also helped quite a bit with the legislature.

Yeah, that was kind of the elephant in the room. That was the monster. Yeah, last month. So with Bren and Jesse and I, every Monday we'd go through the the best meeting that would review all of the legislature that was in place. Many of the effects that had negative weight on the cities, we have alerted and contacted all of our legislature. So that finally made this last week or so.

Yeah, we appreciate you taking the time. That's a time-intensive thing, so we appreciate you doing that. Thank you. All right, um, we'll run through the regular meeting. Item number 3, call to order. Item number 4, invitation.

Uh, who, who asked the guardians to speak first? Guardians? Guardians?

Guardians? Guardians? Okay, so I'll let you introduce them.

Okay.

Mayors, um, we got— then we'll go—

we're going to add in, uh, an item 6.0. Uh, that's the State of the City event, such a successful event that we'd like FP just give a quick report on that at the beginning of City Council.

I'll call you up.

Okay.

And then item 6.1, uh, the report from Unification Advisory Commission. And we'll go to item 7, personal appearances. Item 8, the consent items.

Approval of meeting minutes.

Appointment to the Care Advisory Commission, Kelsey Powell and Laurel Smith. Uh, appointment to the CDBG Advisory Commission, Steve Heaps and Scott Snow. And an appointment to the Heritage Advisory Commission, Don House-Peeper.

Okay, just let me know.

We will have item 9, City Manager information items. And then we'll adjourn. They'll make a motion to adjourn, and then we'll adjourn to a meeting of the Arm Redevelopment Agency. So rules of our adjournments, keep that in mind. And then we'll go into the RDA consent items, and that's just approval of meeting minutes. And then our RDA scheduled item will be at 12:11. That's a resolution amending the participation agreement for University Place Community Development project area, and Steve Earl will present that to us, and then we'll adjourn from that meeting.

We need a motion for that resolution.

Yeah.

And then I'll begin. We talked about potentially doing a closed meeting, but we're not going to do that. There's not on the agenda. We'll adjourn.

Mayor, Council Member Millett has an extremely good, perhaps photographic memory, because he looked back on the council meeting on February 13th and Steve Hughes was appointed to the CDBG.

Yeah, that's why we have Council Member Millett. We appreciate that.

Not at all.

We appreciate that.

So Steve Heaves has already been appointed, so we would choose— okay, sounds good.

All right, any questions? Okay, we'll adjourn. Thank you.

Thank you.

Test, test.

There we go.

It's probably a little loud.

As you're going out, you're my favorite.

They do the job. Yeah, I will admit I must not have sharp enough eyes.

They do have—

where do you get— do you do your notes on books or something?

Have you ever been up to Diamonds?

No.

She's a good soul.

They usually just have a few that are not preordered.

Just like it sounds.

Welcome. I'd like to call this meeting to order. We'll start out with an invocation and a Pledge of Allegiance. And, uh, Dave Spencer's asked these folks to come, and so I'd like you to just introduce them.

So, uh, we have Doug and Jody Gardine, uh, one of my neighbors, and, uh, they're awesome people. And Jody used to work at the the, the Orem Credit Union, Orem City Credit Union upstairs, before it was discontinued, I guess. But Doug also volunteers and did Meals on Wheels in the past, so they're definitely involved in the community and we appreciate their friendship. So thank you.

Thank you. Uh, so Doug, if you'd like to come up and give the invocation.

Our Father in Heaven, we are grateful to be here this evening. We're grateful for the blessing of living in this wonderful nation, in this wonderful state, in this beautiful community. We're grateful for those who serve here and pray blessings upon them that they will make good decisions for all of us, and that will be pleasing to Thee. We thank Thee for all of our blessings that we have, and we pray that we will go forth in this meeting having learned things and be blessed. And we say these things in the name of Jesus Christ, amen.

Thank you. Now please rise for the Pledge of Allegiance, and Jody, if you'd come up and lead us in that.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Amen.

Thank you. We've got 2 reports. We'd like to start out with Pete, our communications director, giving us a report on our recent State of the City event.

Okay, thank you. It was a marvelous event, and I wanted to thank each one of you for your participation, for filming the videos with us. We had a really, really great time, and I think the employees and the residents and the business people that were there had a great time as well. It was a wonderful event for, uh, seeing where the city had been over the last year and where we're going in the future. It's really positive. I talked to tons of employees. They're super motivated and inspired by what happened. Now, what I'm going to share is probably taking the biggest risk of my career, um, but it's worth it because one of the things that came out of filming the mayor's video, his message, we got this photo of our city manager, Bren Bybee. So I don't know what the mayor was saying in this shot, but it was really surprising to Bren. You can see the legit shock and awe, and I thought it would make a perfect meme, uh, for us employees to use. And so here's just some examples. Like, his name is Miro because it's Oren spelled backwards, and you can You can see the shock of Brent. Um, then I told him that if he was going to have a bad attitude, he should go work for Provo. You know, callback to this work session. And then my personal favorite, I lapped Dave Spencer at the Redline Racing grand opening. And you can see how shocked Brent is. He doesn't even believe it. So, no, but it was so fun. The event was great and we learned a ton for next year. This was our first one ever, so we'll learn. We took some notes. and we'll do some things better for next time. But just going forward, it was such a good event, we wanted to not just, you know, rest on our laurels, but use it as a springboard to launch us into the next great phase for the city. So we've put together a few things to get more of the State of the City information out there. So we created this little webpage. So if you ever want to reference back, all the videos are posted there. The booklet is available there. So if you're having a bad day and you need to think back on grand times— you can go to this website. We're going to put it in the website. It's already gone out in the digital newsletter. It was there this morning. We put it in the City Ditty so employees have reference to it whenever they need to see it. We are going to send out the printed newsletter next week, and it'll have tons of stuff from the State of the City. And then we have all the extra State of the City booklets scattered around at different city offices. So if people come down to the Help Center or stop by HR, they can get a copy, and we'll just have those available until we run out. And then we'll, you know, it's probably already time to start collecting information for, you know, the 2024 or '25 State of the City. So thank you for your participation once again, and it really was a great event.

Thank you, Pete. Yeah, it was an amazing event, and, uh, you did an amazing job putting it together.

I appreciate it.

Thank you.

Thank you. And not, not just putting it together, but creating it out of Nothing. So that was good.

Well, there was nothing to compare it to, so—

All right, item 6.1, uh, another report, this time from Kristen Bascom, uh, for the Beautification Advisory Commission.

Mayor and Council, uh, my name is Tyler Pay. It's a pleasure to be here with you this evening. I'm just going to introduce real quick while they get set up for their, their report. Um, I'm Public Service— uh, sorry, Assistant Public Works Director over Public Services. Um, also serve as staff support for the Beautification Commission. We've got a great turnout tonight here on the first row. We've got 6 of our 7 members in attendance. They're all awesome. Kirsten Bascom is going to be giving us our report today, um, and I'll turn the time over to her. Thank you.

Yeah, there's a little button Oh, the push the button that says push. Okay, thank you guys for, uh, being here for this presentation.

This is it.

Um, okay, so the Orem Beautification Advisory Commission, uh, seeks to preserve— you know what, I'm not gonna read that. What we are here for as a commission is to, um, Strive to inspire businesses and residents here in Orem to beautify their, their homes and their businesses. Um, we really feel that through positive outreach and positive reinforcement, others will follow suit and beautify their own yards with the other people beautifying theirs. Um, um, our commission members, me, Kirsten Bascom, Um, I am the chair. Robert McFadden right here, he's a Master Gardener, he is vice chair. We have Elaine Parker right here, and we have Sean Orulan.

Anybody?

Is it Orulan? Um, Pam Ogden.

Is Pam here?

There's Pam. Um, Britton Rinalfson.

Rinalfson.

There you are.

Okay. Yep, there he is. We're just getting to know each other, guys. Jared, uh, Goble. Goble.

Jared, where's Jared?

There you are. Uh, and Jen Gale, she is with us, um, in our city council. Um, these are the last year's accomplishments. Of course, the Summerfest parade. Um, we had— let's pop through those. Social media outreach. We're doing monthly newsletters, putting out stuff, good information for our fellow Orem residents. These are our beautification awards and our holiday spirit. So what we're going to be doing is we will be each have a section on the map that we can drive around and kind of see who is beautifying their yard. Um, and with that, we have these signs that we can go up to the homeowner and ask if we can put that in their yard, place it there, and hoping that their neighbors can see that and beautify their own yards for hopes to get it another year. These are 2023 yards that were voted and Uh, what's the word? Presented. Um, here are your business awards. So we are also doing this with businesses. Um, sure you have noticed all of those. We also do holiday decoration awards. Here are some for Christmas. Okay, so our 2024 goals. Um, we're gonna promote worthwhile practices that enhance the beauty of forum. I think we all really care about our city, and we really, as a, as a, as a committee, this is really important to us. Um, we're going to do this by— we're going to recognize 84 properties. Um, like I said, residents and businesses. We are going to also recognize residents for water-wise water use. Uh, support the city— we're gonna— we want to support the city in establishing at least one community garden and encourage and educate residents in good horticultural practices. Um, Arbor Day activities, you know, all of the, all of the good stuff. Uh, goal number 2 is to promote the roles and activities of the Beautification Commission. So we want to continue to promote the commission and beautification activities and education opportunities through the city Facebook page and newsletters. Purchase and participate in the Summerfest parade. Uh, thank you for your time and support. We look forward to working with you guys with things that we want to accomplish this year. Thank you so much.

Thank you.

Yeah, Mayor, I've got a comment. So I was on the commission or liaison last year, and, and, uh, It's amazing to see how full the committee is, um, and they're here, and it's amazing. So, um, I, I guess I can hand that over to Jen, and she's in good hands with these good people. And, and Bob, I'm looking forward to that community garden, and you can show us how to grow strawberries, man. That's where I met Bob. I met Bob at the farmer's market, and he was trying to push strawberries on me, and I don't grow strawberries, but I asked him if he wanted to be on the Beautification Commission. He He said he would, so appreciate that.

I actually bought 3 of those strawberry plants, so, and they were great, and I'm gonna get some more. Um, but yeah, Jen, we encourage you to work with these guys and, and really help them.

Great. Well, I— thanks for being here. Yeah, you all are—

almost all of you are new. Is anybody not new on this committee? I mean, we just had our first meeting like a month ago, and Kristen said all I'll be the chair, and Robert said, I'll help. So they're doing a great job in the short amount of time they've been here. So I look forward to seeing what you accomplish.

Well, my only request is, when you were going through that map of awards, there's an area of the city that got skipped, and that's where I live. So I'll show you on the map later, but you need to assign a person to that spot. Thank you. Um, okay, we've got our consent items coming up. Oh no, actually we've got personal appearances. So we've just got one personal appearance, and, uh, that's Steve Heaps, if you'd like to come up and share.

Don't start it yet. Good to be at the council. It's great. Good to follow the gardener because it kind of goes hand in hand with what I wanted to kind of bring up and talk about. Some of you, I've talked to you about before about this. In a way, it's about irrigation in Orem.

I—

we have 2 canal companies in, in Orem. We have North Union Um, North Union Canal Company and Provo Bench. Uh, we all live in Orem, we all see the canals, the ditches in our backyards and neighborhoods, etc. Well, our neighbors to the north, Lyndon, has decided to pull their shares out of the canal, and they're gonna, um, get a new tap They're going to come from above and come straight down to Linden, and that's how they're going to get their water for the pressurized irrigation. So in doing that, that's going to take the pressure away in the irrigation for everybody in Orem. Everybody, everybody. Uh, there's just not going to be enough push in the water. So there's a problem we have there. I'm just here to maybe educate you, to maybe start some conversation. Don't know if there's anything the city can do or help out the backyard gardener. That's one of the things that, sitting in the irrigation meetings, that's one of the things they keep bringing up, is that Orem has grown and about— and has grown the backyard gardener, and that those things are things of the past. Have to just take care of it with your hose, sprinklers, stuff like that, instead of by irrigation. Uh, you know, some ideas— I don't know if we can— if those who have water irrigation, um, shares can get it inexpensively from the city that they can grow this type of stuff, uh, then, then okay. I don't know, these are just some ideas that have come up, and we're kind of reaching out to, to you guys for help. Um, we're not going to solve this right now, but maybe get it on our minds and maybe start a committee. There are some people within the city who are very well aware of this. Uh, what's happening. And, um, anyway, questions? Anything we can bring up, talk about more? Yes, it is going to happen. I'm, I'm as heartbroken as anybody. I mean, I grew up on Spencer playing baseball on the irrigation. So anyway, questions? Anything on that? Concerns, don't care. Okay.

What canal is it that feeds your property?

What's that?

Are you— what canal are you?

We're on North Union. North Union starts from 800 North. North. Everything else is down below, is fed by the Provo Bench. Uh, it starts at— oh, and by the way, the biggest shareholder in the canal is Orem City. Just a fact for you. But Orem City takes their water out before it hits the canal and is diverted and is, you know, purified and taken care of that way. So the other question comes up. Let's say Linden does do that. What's going to happen to the, to the irrigation ditches? Who's going to be responsible for that? Where do they go? Who's going to take care of it? Let's see, I just said the biggest shareholder is Orem City. Something to think about.

I don't know.

I have no idea. All I know is Grandpa's mad because this is happening. So, questions? I don't know. I don't have all the answers either. I have volunteered to be on the North Union Irrigation Canal Company, uh, So, uh, hopefully I can have some answers quick if anybody has any. We'll just kind of take— we'll see what happens.

I think, Steve, I think you need to probably talk with Chris Shirkey, our Public Works Director.

Chris knows, we've talked.

He has all the information.

But, um, and who is— there's another guy on the board from Orem. Thank you, Reed. Those people know a lot more than I do. Have I said everything correctly?

Most of the sheriff's— so it's not the same forum. We don't—

oh, okay.

But you're right, everything else is correct. They'd love to meet with you and a group of citizens.

Yeah, I don't know. I got a 90-year-old father down here by the mall. that, um, irrigates his lawn. Uh, I don't know what he's going to do because I don't want to go put it in a sprinkling system in his lawn.

Come on, guys.

So anyway, so maybe we can get a meeting, Chris, and we can meet with him.

Okay, good.

I'm on the board now. I'll get those guys to come to us instead of us always going to them.

Thanks.

Thank you.

Thank you.

All right, next up we've got item number 8, the consent items. Item 8.1 is the approval of the meeting minutes. Item 8.2 is 2 appointments, uh, to the Care Advisory Commission. Elsie Pally and Laurel Smith, are either of you here? If you'd like to stand up just to recognize you and thank you for volunteering for that CAREMA Commission. Thank you. And then next we've got our CDBG Advisory Commission. We've got one appointment, Scott Snow, and then a previous appointment a week or so ago of Scott Heaps. Or I'm sorry, Steve Heaps. Are either of you here? Okay, there's Steve. Again, just to recognize you and thank you for serving on that commission. And lastly, we've got item 8.4, uh, the Heritage Advisory Commission. Don Housekeeper. Thank you, Don.

My pleasure.

All right, so those are our consent items. Would someone like to make a motion?

Mayor, I'll make a motion that we approve the consent items as listed.

I second it. Aye.

Aye.

Aye.

Aye. Aye.

Aye. The consent items are approved. Uh, next item 9, city manager information items. Ren, do you have anything?

Yeah, uh, one quick item. Um, second perhaps only to our Lights On program that the event or program that we probably get the next most amount of gratitude expressed and compliments is our spring cleanup program. And that's just right around the corner, is going to start on April 15th, go through May 11th, and we'll be positioned at Palisade Park, Sierra Park, Nielsen's Grove, and then it'll circle back to Palisade Park and then back by popular popular demand this year that we didn't do last year is a community swap opportunity on April 20th. So we'll be getting the word out there and anticipate a lot of participation and look forward to a lot of thank-yous. And then the only other item is that I'm currently reviewing our communications manager position and— Or I will at least review every presentation that he gives before he—

Thank you, Brent.

I'm sorry, Pete. Um, okay, so this, this is definitely a record, uh, but we're not done yet. But we're going to adjourn this meeting, uh, and move into an Redevelopment Agency meeting. So would someone like to make a motion?

I'll motion to adjourn this meeting and move into an Orem Redevelopment Agency meeting.

Second.

Aye.

Aye.

Aye.

Aye.

Aye.

Aye.

Okay, we're adjourned from the City Council meeting, but we'll move into this, uh, Army Development Agency meeting, and we'll start that with item 11. And on the consent items, we have approval of the RDA meeting minutes from June 13th, 2023. Would someone like to make a motion?

Make a motion that we approve the RDA minutes of June 13th, 2023.

I'll second.

Okay.

Aye.

Aye. Aye.

Aye.

Aye.

Aye.

Aye.

Thank you. The RDA minutes are approved. Now to the heart of the meeting. We're at item number 12, RDA scheduled items. We've got, uh, item 12.1, a resolution amending the participation agreement for the University Place Community redevelopment project area. And Chase— yeah, Steve Earl, you're going to present. Okay, you're the helper and Steve's going to present that to us.

Yeah, so, um, I'm going to try really hard to avoid saying mayor and city council and instead say chairman and members of the board of directors of the Redevelopment Agency of the City of Orem, because that's the capacity you're now acting in. So, uh, this item before you tonight is a proposed amendment to the participation agreement, as the screen says, for the University Place Community Development Project Area. So back in 2015, the RDA created the University Place Community Development Project Area. It's basically the area of the University Mall encompassed by the PD-34 zone. as you know, and basically it was an opportunity to encourage redevelopment and new development in that project area to improve the tax base and to create jobs. And so as part of that whole process, the city entered into interlocal agreements with Utah County, Alpine School District, Water Conservancy District, and some Utah County and I think there's one other entity, all the local taxing entities, essentially. All those entities agreed that they would agree to give up a portion of what we call tax increment to reimburse the University Place for infrastructure that they constructed in that project area. I'll go into as much or as little detail as you want me to. So if you have questions, maybe you can ask me for more detail. But essentially, as part of this project— well, maybe for those who don't know, tax increment basically is the difference in the taxable value of land in the project area, again, on a base year, versus the increase in the taxable value as additional buildings and improvements are constructed within the project area. And so that difference is what we refer to as basically tax increment.

increment.

And so University Place would qualify for certain amounts of this tax increment as they obtained or achieved certain benchmarks or criteria that were outlined in a participation agreement. And so, Jason, maybe you can go to the page that shows the table there. So this is the original table with some redline proposed changes that were we're proposing to make to the participation agreement. But you'll see Benchmark 1, for example, and Benchmark 2, they, they have a bunch of requirements that were required to unlock certain levels of tax increment. And Benchmark 1, of course, includes some new retail, refurbished retail, 100,000 square feet of Class A office space, and so forth. Benchmark 2 is 200,000 total square feet of Class A office space. And then Benchmark 3 through 7 each required an additional incremental 100,000 square feet of Class A office space. So University Place has completed the requirements for Benchmarks 1 and 2, and we have Artie Woodbury here, and I— oh, he's still there. Okay, I was just going to ask him to correct me if I'm wrong, but I think so far they've constructed about 200,000 square feet. 130,000 square feet of new Class A office space. So that clears Benchmark 2, but doesn't quite get them to Benchmark 3. So part of the problem, as we all know, with the COVID-19 pandemic, there was a big trend towards working from home. Office demand kind of cratered. Maybe there are other factors that contributed to demand for office going way down. But I think essentially University Place has found that it's economically infeasible to construct additional Class A office space that would be required to meet benchmarks 3 through benchmark 7. You can either nod or tell me, maybe we want to have him come up and explain more market conditions and how that's impacting their ability. But I think that's probably common knowledge. So essentially the, the result of that is that neither the developer University Place nor the city are able to fully realize the advantages, the benefits from this participation agreement and the creation of this project area. So what we— well, let me back up. So instead of Class A office space, although University Place is not experiencing demand for that, they are experiencing some demand for some additional new retail space. So both new retail space and new office space have the advantage of creating jobs, and they also create additional sales tax. And well, retail in particular creates additional sales tax, much more so than office space, and they both also increase property taxes. So we feel like, and I think University Place feels like, Both sides could benefit from modifying Benchmark 3 to replace the 100,000 additional Class A office space with 100,000 square feet of new retail that would have to be constructed after March 1st, 2024. In other words, it's got to be new retail space, not retail space that has been previously constructed. So, and essentially, this is— If you look at Benchmark 8, you'll notice that that's the last benchmark, and to get the maximum tax increment, they would need to construct 700,000 square feet of total Class A office space as well as 300,000 square feet of new commercial. Essentially, what we're proposing to do through this amendment is to shift 100,000 square feet of that new commercial from Benchmark 8 to Benchmark 3, essentially just changing the timing, not really changing the parameters of the entire agreement, but changing the timing of 100,000 square feet of that new commercial. Excuse me. So we feel like that way both University Place can move forward to gain additional tax increment, allow them to get new development or additional development that will benefit both them and will benefit the city in terms of job creation. Uh, sales tax increases as well as property tax increase. And not just the city, but as the other taxing entities benefit from that as well, including the school district and the county and, and like I said, the other taxing entities. Um, so as— so that's the proposal as far as modifying the benchmarks. So one of the things we wanted to also be sure of was that in the, uh, with the construction of this 100,000 square feet of new retail that we had protection for the neighboring residential properties. And maybe, Jason, if I can have you go to the map, we'll show you here.

And that's—

there should be the last thing. I don't know if you can blow that up. That's kind of hard to see. Can you zoom in on that a little bit, Jason? Possibly. So, I don't know if you can see kind of the green. There's kind of a Green. Well, we kind of lost it. Yeah, it's on the bottom. Okay, so if you can kind of see the green strip right down there and then just go up from that a little bit, that area is labeled new retail. Oh, I'm sorry, sorry, it's labeled retail area. That's the area where University Place is proposing to construct this additional 100,000 square feet of new retail space. And as you can kind of see, it's kind of on the edge or close to where there's some existing residential dwellings. So one of our concerns was wanting to protect those properties to the greatest extent we possibly could. And so what we tried to address— and Jason, you probably need to scroll down so we can see that green strip again. Yeah, there you go.

Can you zoom in the box?

Okay.

Yeah, there we go. So, um, so we have some separation requirements here, and you'll see on kind of the— I guess I'm going to call that the north edge. It's about a 53-foot separation from the edge of the new proposed building to the property line of the neighboring residential property. And then as you go further to the south, um, That other distance you can see right there that's labeled shows 85 feet from the, again, the edge of the new building to the edge of the property line of the nearest residential property. And so one of the things we're putting in the proposed amendment to the participation agreement is that they would have to construct this new retail building with and maintain approximately those setbacks. Or those separation requirements that are shown here on this exhibit. In addition to that, you'll we we've asked them to have some some buffering in terms of trees that they would install and some landscaping. That's the green area that you're seeing on there, and the round circles are the the trees there to also help to buffer those residential properties. Also showing some parking area right next to the landscaping, uh, that would again help to provide, uh, that separation between, uh, the retail building and the, and the residences there. And so, uh, Jason, now if I have you go to those red line areas. Okay, let's, let's keep going down. Next page. Uh, okay, keep going down.

There we go.

Okay, so these bullet points are some, some of these standards that we just kind of talked about. The first bullet point is maintaining that separation of between 53 feet and 85 feet as shown on that map. Number 2 would be that they're going to construct and maintain a masonry wall at least 8 feet along the boundary of those properties. And my understanding is that there's already an existing 8-foot fence on at least part of that boundary, but to the extent that needs to be extended to fully cover that length, they will do that. Then third bullet point, installing and maintaining the trees, as we've talked about. And the next bullet point, installing and maintaining parking in proximity to the new retail building and adequate to meet the new parking demand generated by that new retail development. And if you go to the next page, Jason, I think there's one more bullet point. And that is that Installing and maintaining lighting that complies with the requirements of city ordinances, including shielding direct light from impacting existing residential dwellings in the vicinity of the new retail development. And we actually think this, you know, having this retail building is actually going to be a pretty good buffer for those residential properties because they'll, you know, they'll essentially be seeing, I think, the back of a building, which is pretty innocuous for the most part. And I think combined with the separation distance and the landscaping and the trees, that'll be a pretty good buffer for those residential properties. Any questions to this point? Okay. Yeah.

Can you go back to that original schedule of the changes?

Yeah.

Go back to the table.

Yeah, the table. So I just want to understand a little better as far as Because it's kind of hard to tell from the way this is laid out. As far as, are they net staying the same on committed development? As far as, can you just go through that, what goes up and what goes down?

Yeah, so the only thing that's really changing here is, and I know it's maybe a little bit hard to tell from this, is we're basically in Benchmark 8, we had 300,000 square feet of new commercial development. And the 700,000 square foot total Class A office. So the, the, the total square footage for the office stays the same. That's not being reduced to meet the requirement of Benchmark 8, the last benchmark. Basically, we're moving 100,000 of that new commercial from Benchmark 8 and putting it up in Benchmark 3. So you're reducing, uh, the, the commercial in Benchmark 8 from 300,000 to 200,000 and increasing it in Benchmark 3 from 0 to 100,000 square feet of new retail.

And then what's going on in 4 through 7?

So 4 through 7 is basically, basically shifting each of those benchmarks down one, if you will. So Benchmark 3 used to be 300,000. That now becomes Benchmark 4. Benchmark 4 used to be 400,000 Now that becomes Benchmark 5. So in other words, Benchmark 3, they can qualify for that just by doing the 100,000 square feet of new retail, but they don't have to do the additional Class A office space. But to get to Benchmark 4 and then the subsequent benchmarks, they will still have to do each additional 100,000 square foot increment of Class A office space.

And so is that the same then, or has it been reduced?

No, it's, it's, it's the same, if you will, um, but it's, it's just been bumped down a benchmark. So they still have to get the— they still have to hit the 300,000 square foot benchmark, for example, but instead of that being Benchmark 3, that now becomes Benchmark 4.

Okay, so, so you're just saying they did a swap Between Benchmark 3 and 8, and then that shifted everything. Yeah, but the numbers are the same.

Exactly.

So nothing's changed as far as the committed, right?

You're doing right.

So to get the maximum increment, you know, in terms of completing Benchmark 8, those numbers are the same. They still have to complete the total of 700,000 square feet of Class A office space and a total of 300,000 square feet of new commercial.

And the idea is that office is slow right now, so you're moving that down while retail's working, and so you're moving—

Exactly, yes.

Steve, what is the timeline between each of these benchmarks? What amount of time is represented?

There's no stated timeline, but there is a time— there is a maximum time limit for them to collect the tax increment. So it's basically a period of, if I'm remembering right, it was originally 20 years, I think, I think that was increased to basically 22 years. The legislature did that because of the pandemic. And I, I think maybe Artie can— I could look it up. That puts the— I don't remember the exact date. Do you remember, Artie?

2039.

Okay, so they only have until 2039 to collect on the increment. So basically it's in their interest to do all this as soon as they possibly can so they can collect the maximum amount of increment, because after 2039, it's over. They don't get any more.

So you, you touched on this briefly, but can you just articulate for us the benefits to the city of us making this change?

Yeah, so, um, if we were to not make this change, basically there would be no further progress according to, um, new development in terms of, you know, the mall— the, the University Mall is not really as incentivized to construct the, the new retail or any other development without us making this change. So, I mean, presumably there would be no further commercial or office development without this change. So what that means is that you don't get those additional jobs that would be created by that. You don't get the additional sales tax. You don't get the additional increases in property tax.

So, and then if they don't, if they stop, decide they don't want to meet any more benchmarks, they're leaving $23 million on the table.

Or more.

Or more.

Yeah.

Okay.

So their incentive is there to complete the agreement.

Yes.

And I would note that these, these numbers that you see in terms of what they're able to obtain through Benchmark 7, at least, That's actually only reimbursement for infrastructure that they construct. And so infrastructure is primarily in this case probably going to be parking structures because those are probably the most expensive component of infrastructure. Could also include things like streets or utilities or things like that, but it's not money that they just get for free. They're actually limited in terms of getting reimbursed for infrastructure. So if they don't construct The infrastructure, like the parking structures, even though they might qualify for these cap numbers you see there, they don't get it unless they've also constructed the infrastructure.

So, does this trigger anything else as far as besides hitting the caps? Does it trigger other things?

Yeah, so, uh, that was going to be the next point here. And so maybe, Jason, you can go to the next page there.

No?

Well, I'm just going to start talking and then you can find the place where it talks about— so in the PD34 zone, and this was done back 10 years ago or so, there's a— we wanted to make sure, you know, the mall at that time was going through a period where malls throughout the country were having a difficult time surviving economically, and we needed to do some things to ensure that the mall stayed viable. And one of those things had to do with, you know, at that point it was just a mall, you know, retail stores essentially. And part of the idea was to allow and encourage not just retail, but also office and also a residential component there. And so the PD-34 was amended at that time to allow, in addition to retail, also office, also residential units. And, um, but we wanted the project to stay largely retail. It was a very significant part of our sales tax base, and so we didn't want, you know, the retail component of the University Place to be swallowed up by the residential or the office. And so we basically included a provision at that time in the PD-34 ordinance that the number of residential units that they could construct on that property would limit it— be limited to 1.5 residential units per 1,000 square feet of retail space they had in the project. So, um, I don't know what the exact number is. I think they're somewhere roughly, give or take, a million feet of, uh, retail. Is that in the ballpark, Artie?

Just a—

Okay, a million 2. Okay, so, um, you know, that would entitle them to, to based on that 1.5 ratio to somewhere around, you know, 1,500+ residential units. But we wanted to, through doing this, we didn't want this change in the benchmark to necessarily allow additional residential units, or yeah, to be constructed as part of the project. So what we've included a provision in this proposed amendment that basically says that Whatever retail space they construct to meet this new Benchmark 3 will not be used to allow them to construct additional residential units. So that 1.5 ratio will not apply to, you know, the 100,000, or if, you know, if the building's 110,000 square feet, won't give them additional residential units based on that. Now, if they construct other— Uh, Retail, that's not, you know, part of meeting Benchmark 3, then it still would increase their ratio. But to meet this particular benchmark, it won't increase their allowable residential units. So, um, the language in there, it's kind of long, Jason. I think it might be the next page there. Um, yeah, that's it right there. If you want, if you really want to read through all that, but that's basically what it says.

Would you go back to that slide we were just on? So what's the purpose for the last line, the or almost entirely? Are we—

Sorry, what are you referring to?

So the parties acknowledge that the project area is located entirely or almost entirely within the PD-34 zone. Are we expanding that unintentionally?

No, that's just a preface to the next page, and it's just referencing and describing the fact that the PD-34 zone outlines that ratio, 1.5 Can you show us where that 100,000 feet is in relation to the mall? Yeah, on the map, you mean? Yeah, yeah, if we can go back to that map, Jason. So if you see, if you look at the green area, it's just up above that and kind of on the left-hand side. It's kind of hard to read, but it says retail area there. Yeah, that's it right there.

And just for context, where's that at exactly? Okay, Costco's right next door.

So north is left.

And then, so, so this is below—

I'm sorry, but This is below Costco, just to the south of Costco, between the main park area that's at the main— so that kind of open parking area, that land right there, that's what this is.

Okay, just below Costco and above that park.

Yes, this area.

Go ahead, Lynnae.

Well, I was just going to ask, so is this landscape like, I mean, are we defining the landscaping? Are we saying you have to have a tree every so many feet, or we're just saying here's an idea?

So yeah, it, it's, it's supposed to conform to what you're seeing on there. So where you're seeing, and they've kind of, if you have, if you zoom in a little bit more, they've kind of defined the width of that landscaping. It's kind of greatest on the, the northern part, I think. What is that, 16 feet or so? And then it does taper down a little bit towards the southerly end where it's about 12 feet. And you see the circles that they've got outlined, those are the trees that they would have in there. Now, I will also note, um, just a little bit to the north of kind of the green area, you'll see some smaller circles on that. So what that is, um, right now, uh, University Place, as I understand in their, uh, discussions with the proposed new retail developer, um, That area on the University Place property would be asphalt, and there's not room to put landscaping on their property right there, but they're willing to put trees on the neighboring residential property owner's property if they're willing to agree to it. But they would have to obviously get permission from that property owner to do it. So.

Do we have any other questions?

So, Jason, where was the Hale gonna go? Is that the future development, which is right by the green trees? That was there, or is it below?

If I remember correctly, Hale Center Theater was looking at Directly to the north of the park.

Okay, right.

So in— yeah, where you're kind of pointing, right around there.

Right.

Okay.

Anything else?

Okay.

Ready for a motion?

Yeah, I think we're ready for a motion.

I would like to make a motion that we have a resolution amending the participation agreement of the University Place Community Development Project area.

I second that.

Aye.

Aye.

Aye.

Aye.

Aye.

Aye.

The resolution passes. Thank you, Steve and Jason.

Do you want a motion to adjourn?

Second.

Okay.

Hi.

Do you guys—

Yes, we're on our way.

Hi.

Hi.

Hi.

Hi.

Hi.

We're adjourned. Thank you.