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CITY OF OREMCITY COUNCIL MEETING

56 North State Street Orem, UtahOctober 17, 2017

3:30 P.M. WORK SESSION – PUBLIC SAFETY TRAINING ROOM

CONDUCTING Mayor Richard F. Brunst

ELECTED OFFICIALS Councilmembers Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner

APPOINTED STAFF Jamie Davidson, City Manager; Brenn Bybee, Assistant City Manager; Greg Stephens, City Attorney; Richard Manning, Administrative Services Director; Bill Bell, Development Services Director; Karl Hirst, Recreation Department Director; Chris Tschirki, Public Works Director; Scott Gurney, Fire Department Director; Gary Giles, Police Department Director; Charlene Crozier, Library Director; Jason Bench, Planning Division Manager; Steven Downs, Assistant to the City Manager; Reed Price, Manager; Kirby Snideman, Long Range Planner; Jason Adamson, Risk Manager; Ryan Clark, Economic Development Division Manager; Kathi Beckett, Analyst; and Donna Weaver, City Recorder

DISCUSSION – Summerfest Planning

Mr. Price introduced members of the Summerfest Advisory Committee present. He then reviewed the growth of Summerfest events over the past few years, the cost of those events, and the ongoing funding needs.

Traditional events included: Parade, Carnival, Boutique, Entertainment, Kids Crafts, Baby Contest, Food Vendors, Car Show, Magazine, and AirCare Helicopter. New Events and Responsibilities included: Fundraising, Tuesday evening Day of Prayer, Wednesday night entertainment at SCERA Shell, Thursday night family night at City Center Park, Expansion to SCERA Park, Business Showcase, Children’s Activities, Food Trucks, Friday night headliner at City Center Park, Cooper’s Run and adding days to the event.

Summerfest funding came from three sources: the City’s contributions, fees and charges, and sponsorships from local businesses. Mr. Price presented a chart depicting the City’s contributions over the past nine years. He noted donations from the City were at their highest from 2008 through 2012. In 2013 and 2014, the economic downturn caused the City to cut Summerfest completely out of the budget. However, for the past three consecutive years, the City had contributed approximately $15,000.

City Council Minutes – October 17, 2017 (p.1)

Fees and charges were broken down as follows: Baby Contest: $ 3,500 Boutique: $ 13,000 Food: $ 13,000 Grand Parade: $ 3,000 TOTAL: $ 32,000 (2017)

Sponsorship money was broken down as follows: Prior to 2014: $ 2,000 2015: $24,700 2016: $46,250 2017: $59,700

Summerfest event costs were broken down as follows: Prior to 2016 : $ 65,000 Summerfest 2016: $ 85,000 Summerfest 2017: $108,000

No-cost events included the Tuesday evening Day of Prayer and Cooper’s Run. Summerfest costs for new events included:

Wednesday night entertainment at SCERA Shell $ 15,000


Thursday night family night at City Center Park $ 1,500o (Plus personnel costs)

Expansion to SCERA Park $ 4,000o (Plus personnel costs)

Friday night headliner at City Center Park $ 10,000 TOTAL $ 30,500

Personnel expenses were broken down as follows: 2015: $43,000 (Police - $17,000/Fire - $6,000/Parks - $20,000) 2016: $50,300 (Police - $23,000/Fire - $6,300/Parks - $21,000) 2017: $51,900 (Police - $23,000/Fire - $6,900/Parks - $22,000)

Expansion to SCERA Park included children’s crafts, car show, business showcase and kids games in 2016. In 2017, similar events were hosted, with the inclusion of children’s entertainment, carnival and helicopter rides.

Mr. Price posed the following questions: Was the Council comfortable with the growth and associated costs? Should the City continue to rely on sponsorship money to fund Summerfest activities?

o If so, they needed to change the current committee structure and responsibilities.o Could this level of fundraising be sustained by the City into the future?

Mr. Price discussed three options moving forward.


Option 1 was to maintain the current structure, which was that the Council would oversee the Summerfest Advisory Committee (SAC). The SAC would then oversee the entirety of the event.

Option 2 added a separate steering committee to oversee fundraising, volunteers, SCERA entertainment and the Summerfest magazine.

Option 3 added a subcommittee of the existing SAC, which functioned similarly to a steering committee excluding the SCERA entertainment.

Mr. Price detailed the duties of the Summerfest Advisory Committee: To recommend objectives, policies, procedures, programs, and expenditures of City funds

related to the annual Orem Summerfest Activities. To report, on an annual basis, to the City Council regarding the schedule of activities for

the upcoming Summerfest activity and to report on the activities of the previous Summerfest activity.

To develop annual Summerfest activities to promote the community spirit of Orem. To enlist the cooperation and participation of various volunteers and community

organizations and clubs to develop programs in association with the annual Summerfest Activities.

At the direction of the City Council, the Committee may participate in the development of other special community events.

Mr. Sumner noted the steering committee was used in 2017, and Mr. Price said that was correct. Mr. Davidson added that the steering committee was what drove this discussion. There was nothing in the City Code about a steering committee. Mr. Price said that each member of the SAC could invite others to assist. Mr. Davidson said the SAC always lead Summerfest efforts in the past, but in 2017 it went through the steering committee.

Mr. Davidson then said that the City Council should consider the size of the event and the need to pay for its growth. His concern for the fundraising was (1) if it could be sustained; and (2) if it was the place of the City to fundraise for community events and set up a sense of obligation in the future. If there was going to be an ongoing steering committee, the City Code should be amended to reflect that change. He said that, in a sense, the City Council was the steering committee. However the SAC was one of the most active of City committees. From a staff perspective it was time consuming and expensive to maintain. Additional monies could be directed toward Summerfest, but if that were to take place, there would be costs associated with it.

Mr. Macdonald expressed appreciation to the committee members for their hard work. The question was not just if it could be sustainable, but whether or not it should be sustainable. He questioned if it was fair to the next chair to be expected to fill the former chair’s shoes. Mr. Macdonald said he saw the goals to bring neighbors together and celebrate as good ones, but he was concerned the event could grow too large.

Mr. Lentz asked if there were specific sponsors for the various events. Mrs. Lauret said there were. Mr. Davidson said sponsors were recognized at the events.


Mrs. Lauret noted she was currently the liaison to the SAC, but she had also helped with the parade for a number of years when the budget was so slow. She said there should be a minimum budget for certain core events such as fireworks, and anything else should be gravy. Mr. Davidson questioned what might happen if one year the City was at odds with a key sponsor. Mrs. Lauret suggested that $50,000 be budgeted each year. There was subsequent discussion on the possibility of partnering with the SCERA to cut down costs.

Mr. Tschirki said they were already generating $32,000 per year in fees and charges, so if the City budgeted an additional $50,000 that would raise it to $82,000. He noted that last year’s Summerfest cost $108,000. Mr. Davidson said there were also soft costs like overtime that were not included in those numbers. With the addition of events, the soft costs grew as well.

Mayor Brunst said they could not forget that it was a community event, and there were many companies that would like to participate more.

Teresa Horn, SAC committee member, said member she felt the SAC was stretched, and she wanted a steering committee formalized. She said she did not have a job description. The Mayor suggested she put one together for her position.

Kenna Jo Matthews suggested that either a steering committee be formed, or additional members be added to the SAC. She also suggested forming an ad-hoc committee to specifically oversee fundraising, which was a responsibility she did not believe required an entire steering committee.

Jim Orr said that, for many years, the carnival was held on the grass area in the park. However, a bad storm necessitated moving the rides to the parking lot, which brought positive changes. He said having new members and a different configuration would add to the success of the event.

There was subsequent discussion regarding the possibility of forming partnerships with outside organizations. Ms. Matthews said partnering with the SCERA would add to the event’s success.

Mr. Lentz asked if the fees were high enough. Mrs. Horn said if they charged more they would lose a lot of the vendors. She said she thought the currents fees were fair. Mr. Orr noted that Springville’s Art City event was held the same weekend, and their fees were lower.

Mayor Brunst said members could be added to the committee, and he liked the idea of moving back into the park. He also liked having a minimum of $50,000 budgeted each year. He said he liked that Summerfest was a longer event but did not want it to become a Freedom Festival in terms of its size.


Mr. Davidson said some of the key committee members were term-limited and could no longer serve. He questioned if the terms should be changed or removed outright. He said it was not just a matter of what the citizenry wanted but what the staff could accommodate. He said the event had reached the point where they could no longer make accommodations, because it was already taxing the City’s personnel and acreage resources. He agreed with Mayor Brunst’s remarks that the Summerfest was not the Freedom Festival, in the sense that it was not structured as a separate, nonprofit organization. Staff was committed to continuing to make Summerfest a quality event. However, it was the City of Orem’s event and if the Council wanted it to be something different, then staff could pursue alternative avenues. Mr. Davidson said if the event was turned over to a nonprofit organization, the event would look differently.

Mr. Spencer asked if additional positions on an expanded committee could be filled. Mrs. Horn said it was difficult to fill the current positions. Mr. Spencer said he liked the size of the committee as it was this year.

Mrs. Horn said many people liked attending the portion of Summerfest that was held at the SCERA Park, because it felt more like a family event and less like a carnival.

There was subsequent discussion regarding the activities offered at Summerfest this year. Mr. Seastrand said he liked many of the added activities. He said based on his discussions with staff, he recognized that there were some activities that might need to be cut back. Mayor Brunst said attendance at the events was phenomenal.

Mr. Sumner wondered how fundraising monies would be used along with budgeted amounts.

Chief Giles said that as the event expanded into other locations and the parade route was changed, overtime expenses had increased from $17,000 in 2015 to $23,000 in 2016 and 2017. His overtime budget had not been increased to accommodate the increased needs. He noted that twenty plus volunteers had helped at no cost the City.

REPORT – Orem Police Department (OPD) Victim Assistance Program

Renee Flitton, OPD Victim Advocate, noted that October was Victim Awareness Month. She then reviewed steps victims could take to increase their safety. She introduced Becca Mallory who went over domestic violence in Utah.

UPDATE – Orem Centennial Committee

Mr. Clark introduced Kathi Beckett, who reviewed the results of a committee survey detailing possible ideas for the Orem Centennial Celebration. Mr. Clark said the committee was tasked to come up with centennial activities that could be incorporated into existing City events, in addition to possible onetime events. The committee held a brainstorming session where it was suggested they hold a centennial legacy project. He said the project would be distinct, unique and easily identified with Orem City. The survey results presented below were ranked by the committee. Ms. Beckett stated the committee would be meeting the following week to pare down the list.

Centennial Celebration Opening Kickoff Ideas


1. Keynote speaker, such as the Governor2. Time Capsule3. Proclamation by the Mayor

Commemorative Items1. Centennial logo incorporated into City uniforms2. Centennial t-shirts for public to purchase at events3. Centennial pins4. Centennial patch for scouts / citizens5. Cookbook with recipes from Orem residents6. Book about Orem—combination

Artistic Ideas Incorporated in Celebration1. Public art displays2. Collage of Orem with pictures3. Chalk the block – chalk art contest

Traditional Celebrations1. Citywide treasure hunt2. 100 acts of service3. Orem passport with 100 unique places to visit4. Joint celebration with Woodburn Corp5. Booth at Summerfest with pictures and videos from the past6. The and now event

Outdoor and Family Events


1. City birthday celebration on 5/5/192. Concert with Orem musicians3. Concert in the Park evening with Centennial focus4. Easter egg hunt with 100 special prizes5. Citywide free breakfast

Athletic / Sporting Events1. Tour of Orem – Run/Walk/Bike2. Orem Owlz game with centennial focus3. Marathon or triathlon

Mr. Clark asked the Council to send any additional suggestions via email.

LEGISLATIVE UPDATE – Rep. Keven Stratton (joined the meeting at 4:55 p.m.)

Mayor Brunst introduced Representative Stratton who reviewed some of the pending bills in the upcoming legislative session. Representative Stratton said he recently visited India. He expressed appreciation for law-abiding residents, well-kept streets, and responsive emergency personnel in the United States. He then commented on the following:

The budget this year was $16 billion. He said they needed to be wise with funds and were currently considering reallocation of

funds and tax code amendments. He discussed concerns with regards to interfacing with other government agencies. Nutrient amounts being released by sewer plants were a concern. The legislature was working on legislation that would place increased financial burden on

the citizens; therefore, they wanted the process to be as transparent as possible.


The legislature wanted to be supportive of public safety. He said the best government was that which was closest to the people, and the legislature

was mindful of achieving balance.

Mr. Macdonald noted that fireworks were an issue last summer. He asked what cities could do to limit fireworks that cause damage to homes and properties. Representative Stratton said citizens already had a personal responsibility to abide by the law. One reason to involve the State was because residents could become confused with different regulations from community to community. He said he would be willing to work with the City Attorney to address the City’s specific concerns. Mr. Macdonald said enforcement could be an issue, and Representative Stratton concurred. They discussed a similar example with marijuana laws in Colorado, where the laws of one jurisdiction did not necessarily align with its counterparts in other jurisdictions.

Mr. Stephens said he would like clear language to ban aerial fireworks in certain circumstances. Representative Stratton said he did not believe the State was the place for that battle; instead, the issue needed to be dealt with city by city.

Mr. Gurney asked if the State had considered reducing the days fireworks could be used. Representative Stratton said there was a balance between those who wanted longer access versus those who wanted less. Chief Giles explained that if Orem enacted stricter fireworks laws than neighboring cities such as Lindon and Provo, Orem residents assumed the City had the same laws, which created confusion.

Mayor Brunst said the State allowed aerial fireworks, and so the issue needed to be resolved at the State level. Representative Stratton said he would invite a half-page memo from staff detailing the City’s concerns.

Mr. Davidson said Representative Dunnigan had heard from a number of municipalities about this issue when amendments were made to the statute. He said from the perspective of the Utah League of Cities and Towns (ULCT), this was a conversation that was already taking place and would not go unnoticed or be forgotten. He said that after the disaster in Cottonwood Heights, it had become a bigger issue.

Mayor Brunst said the legislature created the problem and therefore needed to fix it.

Mr. Lentz said there was a conversation happening in Orem about school consolidation and some residents were considering a school district split. He wondered how such a split could be funded. If a proposal to split the school district passed, along with the Our Schools Now ballot initiative, Mr. Lentz wondered if the State might try to reallocate education funding elsewhere. Representative Stratton said he did not support the Our Schools Now initiative because it tied the arms of the funding mechanism. He said there was not a correlation between education spending and performance, and he was not convinced that splitting the school district would better serve the students.


Mayor Brunst noted that there were discussions taking place in Pleasant Grove regarding Proposition #3, an initiative which dealt with road funding. Lindon was also debating ways in which to fund their roads, which tied into another issue of retail sales. He said the roads issue would only worsen for cities, and he hoped the legislature was planning to get involved. Representative Stratton said roads were an ongoing concern, and there had been some dialogue with ULCT on the matter. He asked what Orem City would like to see from the legislature. Mayor Brunst said he would like a sales tax passed that would directly fund roads, and not be used for any other purpose.

Mr. Macdonald said the Mayor was concerned that the bill last year failed because a chunk of the money was going to go towards public transportation (UTA). Mayor Brunst said there was a heated argument in the Council of Mayors (COG) on this issue.

Mr. Davidson said this was a statewide discussion of whether or not roads were being funded the correct way. He explained that the better the fuel mileage, the lower the revenues; however, there was not an accompanying decrease in the number of miles driven. Mayor Brunst said part of the problem was that the legislature had “kicked the can” down the road year after year.

Representative Stratton agreed the issue of roads needed to be addressed. As the State grew, alternatives to the car needed to be provided. There was already some history about what had been tried and hadn’t worked. Mayor Brunst said in analyzing growth projections compared with current funding and road needs, there would be serious problems in Utah within the next twenty to thirty years.

Mr. Lentz asked if there was any willingness from the legislature to allow counties to decide funding allocations, rather than a “one size fits all” formula. Representative Stratton said the legislature wanted good, sound policy that worked for the cities. Mayor Brunst agreed with Mr. Lentz and said last year’s bill would have worked better for cities, had they been given the option to tailor the funding allocations to better meet their local needs. Mr. Davidson added that, in part UTA was included with last year’s bill because there was a concern that citizens assumed adding more roads would solve the problems of growth.

5:00 P.M. STUDY SESSION – PUBLIC SAFETY TRAINING ROOM




APPOINTED STAFF Jamie Davidson, City Manager; Brenn Bybee, Assistant City Manager; Greg Stephens, City Attorney; Richard Manning, Administrative Services Director; Bill Bell, Development Services Director; Karl Hirst, Recreation Department Director; Chris Tschirki, Public Works Director; Scott Gurney, Fire Department Director; Gary Giles, Police Department Director; Charlene Crozier, Library Director; Jason Bench, Planning Division Manager; Steven Downs, Assistant to the City Manager; and Donna Weaver, City Recorder

Preview Upcoming Agenda ItemsStaff presented a preview of upcoming agenda items.

Agenda ReviewThe City Council and staff reviewed the items on the agenda.

City Council New BusinessThere was no City Council New Business.

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

6:00 P.M. REGULAR SESSION – COUNCIL CHAMBERS



APPOINTED STAFF Jamie Davidson, City Manager; Brenn Bybee, Assistant City Manager; Greg Stephens, City Attorney; Richard Manning, Administrative Services Director; Bill Bell, Development Services Director; Karl Hirst, Recreation Director; Chris Tschirki, Public Works Director; Scott Gurney, Fire Department Director; Gary Giles, Police Department Director; Charlene Crozier, Library Director; Jason Bench, Planning Division Manager; Steve Earl, Deputy City Attorney; Steven Downs, Assistant to the City Manager; Pete Wolfley, Communications Specialist; and Donna Weaver, City Recorder

INVOCATION / INSPIRATIONAL THOUGHT Tiffany DewittPLEDGE OF ALLEGIANCE Packs 1243 & 454


APPROVAL OF MINUTES

Mr. Lentz moved to approve the September 20, 2017, Joint Orem City Council/ASD Meeting minutes. Mr. Spencer seconded the motion. Those voting aye: Richard F. Brunst, Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner. The motion passed unanimously.

MAYOR’S REPORT/ITEMS REFERRED BY COUNCIL

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

PERSONAL APPEARANCES

Time was allotted for the public to express their ideas, concerns, and comments on items not on the agenda. Those wishing to speak should have signed in prior to the meeting, and comments were limited to three minutes or less.

John Hoffman said he was requesting an amendment be made to the City Code so that large animals including horses, cattle, sheep and goats were no longer permitted in traditional residential areas on lots one acre or larger. He said he and his wife both approached the City to discuss the fact that their property was being overwhelmed by flies and the smell of manure on nearby horse properties. This proposed amendment would not affect current property owners who already had such livestock on their land, and who lived in traditional residential areas. It would only affect properties from the time the code was amended. He had reviewed potential properties and there were only nine out of seventy-six existing lots that actually had horses. He discussed the importance of protecting the rights of existing homeowners.

Rosemarie Hoffman said that in addition to her husband’s concerns, she believed this proposal would benefit the City as a whole. She explained that the reason there were not a lot of complaints about large animals in traditional residential neighborhoods was because not many people had large animals; therefore, few residents would be impacted by this change. She reiterated her husband’s concerns about protecting the property rights of existing homeowners, who were affected by the odors produced by large animals on the nine properties previously identified. She provided statistics on the amount of feces horses and cattle produced per year, and said these animals did not belong in traditional residential neighborhoods.

CONSENT ITEMS

There were no consent items.

SCHEDULED ITEMS

6:00 P.M. PUBLIC HEARING – Business Loans of UtahRESOLUTION – Authorizing participation in the small business loan program administered by the Business Loans of Utah (BLU) and finding that the appropriation of money to the BLU Fund meets the requirements of Utah Code § 10-8-2


Mr. Ryan Clark, Economic Development Division Manager, presented a recommendation that the City Council of the City of Orem, by resolution, authorize participation in the small business loan program administered by the Business Loans of Utah (BLU) and find that the appropriation of money to the BLU Fund met the requirements of Utah Code § 10-8-2. Mr. Clark introduced Mrs. Schriever, Deputy City Attorney, and Mike Plaizier, who was Executive Director for BLU, as well as for the Utah Center for Neighborhood Stabilization (UCNS) and the Utah Small Business Growth Initiative (USBGI). Mr. Plaizier was based out of Midvale, Utah.

Nonpredatory lending opportunities were very limited for emerging Orem small businesses to expand. The BLU Fund was an economic development tool that allowed local municipalities and counties to provide local small businesses not considered “bankable” by traditional lending institutions, with the financing they need to succeed.

The purpose of the BLU Fund was as follows:a. To strengthen small businesses, create and retain jobs, and provide economic

opportunities by improving access to small business financing.b. To provide loans to small businesses unable to acquire financing from traditional

financial institutions, but whom BLU deems otherwise creditworthy.c. To stimulate the redevelopment and utilization of deteriorated commercial and industrial

property.d. To provide cities and counties with opportunities to increase economic development in

their areas by accessing BLU funds made available for small business loans.

Economic Development staff was often asked: “What is Orem willing to do for small businesses?” The BLU Fund was an answer to that question and was another tool to foster small business growth. BLU complemented the existing Revolving Loan Fund (RLF), which was also a program for small businesses that were not considered “bankable.” It was difficult to qualify for a RLF loan due to Federal requirements regarding job creation and matching equity funds. Applicants that did not qualify for the RLF were able to take advantage of the BLU Fund which did not contain the same types of requirements.

BLU lent $50,000 to $200,000 to applicants that qualified after a rigorous loan qualification review and loan approval from the City. Small businesses used the BLU Fund loans for building and site improvements, real estate, equipment, working capital, accounts receivable, and refinancing of high interest loans. The City of Orem Economic Development Strategic Plan dated December 2014 Goals 3 and 4 discussed the need to develop a loan fund to assist in the retrofitting of buildings to improve their appearance as part of improving the visual and physical appearance of State Street and to create a civic center at Center Street. Participation in the BLU Fund would help meet these goals.

Fiscal Impact: Zions Bank initially contributed $7,000,000 to the BLU Fund as a Community

Reinvestment Act (CRA) investment. Utah Small Business Growth Initiative, LLC (USBGI) contributed $600,000 to the BLU

Fund. Each dollar contributed to the BLU Fund by the City enabled the BLU Fund to lend

seven dollars to Orem businesses.


Orem set aside $100,000 to contribute to the BLU Fund, using the general fund. Orem’s initial contribution enabled the BLU Fund to lend $700,000 to local expanding

Orem small businesses. USBGI continued to find additional CRA lenders, like Zions Bank, to contribute to the

BLU Fund as the loan pool grew. If needed, the City would have the opportunity to make additional contributions to the

BLU Fund, to continue to provide additional opportunities to local small businesses to expand.

When an Orem loan was funded, the City earned interest based on the note rate of interest, as the loan was repaid, resulting in additional loan funds available to Orem businesses through the BLU Fund.

Other loan fund members were anticipated to include Provo City, Ogden City, Spanish Fork City, Box Elder County, and Weber County.

Utah Code § 10-8-2 – Appropriations Study:

Utah Code § 10-8-2 permits the City to appropriate money for corporate purposes. Corporate purposes include any purpose that, in the judgment of the Orem City Council, provides for the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the inhabitants of the municipality if the City receives value for the appropriation. A Business Loans of Utah Appropriation Study analyzing the benefits of BLU Fund participation (the “Appropriation Study”) has been completed. The Appropriation Study establishes that:1. The City will receive the following benefits and value by participating in the BLU Fund:

o Exponential increase in resources available to Orem businesses for economic development;o Return of interest on money loaned to small businesses through the BLU Fund;o An increase in the property and sales tax base through the growth of small businesses located in the

City; ando Realization of other associated economic benefits including new business and employee

expenditures within the City and construction expenditures.2. The purpose for the appropriation is to strengthen small businesses, create and retain jobs, provide economic opportunities through access to financing, and stimulate redevelopment.3. The appropriation is necessary and appropriate to accomplish reasonable goals and objectives in the area of economic development, job creation because it will jumpstart new private development within the City and provide access to much needed development funds that would otherwise not be available to small businesses within the City.

Based on these demonstrated findings, there is an adequate basis for the City Council to find that the appropriation of money to the BLU Fund meets the requirements of Utah Code § 10-8-2.

Mrs. Schriever said they expected to have the final agreement later in the week, which would be brought before the City Council in November. If there were no significant changes to the final agreement, it would be placed on the consent agenda.

Mayor Brunst asked which cities had already signed and approved this program. Mr. Plaizier said none so far, but Provo was also hearing the item tonight. They believed that Weber County would approve the program the following week. Spanish Fork, Ogden City and Box Elder County were expected to review the agreement in November. He said they did not anticipate problems with the six entities. He explained that the loan terms included two years to originate loans and a maximum of five years to repay the underlying loan. For loans that required amortization, the terms could include a five-year repayment period with three-year amortization.


Mayor Brunst asked if business and personal guarantees would be required. Mr. Plaizier answered affirmatively, and explained there was full recourse to any business owner that had more than twenty percent ownership in a business. He said typically in small business lending, businesses performed well. However, USBGI had invested $600,000 into a loan loss reserve account to absorb losses, up to the balance of the City’s investment amount. Therefore, the interests of USBGI were aligned with those of the City, in that they wanted to ensure good lending practices so there were not any significant losses for either entity.

Mayor Brunst asked how the model determining loan loss ratios was developed. Mr. Plaizier said they ran the State Small Business Credit Initiative, which was a treasury program. Since 2013, they loaned out guaranteed loans of approximately $54 million with zero losses. They also looked at these types of programs nationally and locally. The typical bank loss ratio on a small business loan was less than half a percent. He said SBA loans had a loss ratio of about 1.24 percent to 1.5 percent. They felt these would be a little riskier and wouldn’t qualify for conventional financing. He noted that nationally the loss rate on SBA lending was about three percent.

Mayor Brunst said he thought this was a very exciting program. Small businesses made up eighty percent of the jobs in the country. Mr. Plaizier said he appreciated the City’s support and noted that there was no other program like this one in the State of Utah. There was a “lending desert” for loans ranging between $50,000 and $250,000, and this program would address that need.

Mayor Brunst asked how the program would be publicized, if passed. Mr. Clark said they would spread the word via social media and their website, as well as through visits with incubator clients at the Business Resource Center.

Mr. Seastrand said he had seen some of these programs work really well, and others not quite so well. He wondered about the requirements to provide coaching and mentoring, and said this was a key aspect to business success. Mr. Plaizier said there was no requirement to provide mentoring to small businesses; however, they would be working with Mickey Graham on the underwriting. Ms. Graham was the underwriter for the micro enterprise loan fund in Salt Lake. In addition to assisting with loan underwriting, she would also regularly meet with small businesses to coach them on cash flow and connect them to various other resources.

Mr. Seastrand then asked if individual cities could have a requirement to connect with a mentor. Mr. Plaizier agreed this was important, and said they were excited to work with Ms. Graham who would be the program’s main link. He questioned how to enforce the requirement of connecting with a mentor on a regular basis. Mr. Seastrand said he wanted to see routine check-ins with mentors, more often than a couple of times a year.


Mr. Clark said it would be the City’s decision to send a business to the BLU fund. Staff could try to influence businesses that came to the resource center to work with a mentor. Mr. Seastrand asked if small businesses would remain part of the City’s economic development cohort. Mr. Clark said two of the business resource center incubator clients presently had revolving loan funds. He explained that his department remained in contact with those businesses, and they anticipated that such correspondence would be ongoing through the BLU program. Mr. Seastrand asked if this program was available to students as well as nonstudents. Mr. Plaizier said while it was available to students, the program was not meant to fund start-ups. Businesses were required to have been in operation for at least two years in order to qualify.

Mr. Lentz asked if there was a certain revenue cap in order to qualify as a small business. Mr. Plaizier said as per the Community Reinvestment Act (CRA) requirements, businesses were considered small if they received less than $1 million in revenue and had fewer than 750 employees.

Mr. Lentz asked if there were any restrictions on what types of industries could apply. Mr. Plaizier said no businesses of a speculative nature could apply, or “sin” businesses: tobacco, firearms, alcohol, etc.

Mr. Clark said some cities were targeting certain industries to benefit with this loan fund program. For example, Ogden was targeting composite and outdoor manufacturers. Orem was proposing it be an open fund and not limit the program to any business that wanted to apply. Mr. Plaizier said they hoped to receive several referrals to the program from the City, but they hoped to also get referrals from bankers in town as well. The City had the ability to set its own parameters for the program.

Mr. Lentz asked if there was a requirement for determining what percentage of a small business had at its nexus in Orem. Mr. Clark said the business had to be located in Orem to qualify for the program. Mr. Lentz asked how long a business had to have been in Orem in order to qualify and asked if those terms would be set later. Mr. Clark said the requirement was that the business needed to remain in Orem for the length of the loan. Mr. Lentz asked what the process would be if in the future the City wanted to modify program requirements, and he was informed that any changes would be made on the program’s end.

Mrs. Lauret said it was her understanding that $100,000 was coming from leftover CEDO funds. She asked if Mr. Clark felt this was the best use of those funds. Mr. Clark answered affirmatively and said this was a great program.

In response to a question from Mr. Macdonald, Mr. Clark said that, when CEDO was dissolved and its assets were liquidated, these were the funds that were left over. The funds were currently sitting a city general fund account. Mr. Macdonald said prior to being an elected official, he sat on the CEDO board, and he did not see a lot of successful loans because personal guarantees were not collected. He asked how the BLU program would differ from CEDO. Mr. Clark said they had been trying to collect on a lot of the old CEDO loans, and it helped that the economy had recovered. Additionally, the City would no longer be involved in the collection, underwriting, and application processes. Those would all be handled by the BLU program.


Mr. Macdonald said the goal was for this to be a revolving loan fund. He then asked how the overhead of the organization would be covered. Mr. Plaizier explained that the rate to the borrower would be higher than the rate from the lender to BLU. He also noted that the lowest rate would be the current highest SBA rate. The goal was that after three to five years, the business would be able to refinance through a traditional loan program. This would not be possible if BLU’s loan rate was lower than current SBA rates. He said they would have a loan loss reserve account to cover any losses.

Mr. Sumner said most of the businesses along State Street were very small. He said he was afraid the money might go to ones that did not need it, and he asked how to prevent that. Mr. Clark said the program was intended for those that could not get funding through a traditional bank.

Mayor Brunst opened the public hearing. No one came forward to speak, so he closed the public hearing.

Mrs. Schriever reviewed the following proposed language to the proposed resolution to reflect the delay of the agreement: “The City Council makes the following findings: The appropriation provides for the safety, health, prosperity, moral wellbeing, peace, order, comfort or convenience of the inhabitants of the City’s participation in the BLU Fund.” Additionally: “The City Council finds that the appropriation meets the requirements of Utah Code Section § 10-8-2 because it provides a net value to the City, and its inhabitants through (1) encouraging, promoting, and providing opportunities for economic development within the City, and (2) repayment of principal and payment of interest on the appropriation.” Lastly: “The City Council will consider authorizing the execution of an agreement in conjunction with the BLU fund substantially in the form attached hereto as attachment C at its next regularly scheduled meeting.”

Mr. Lentz asked if the Council needed to vote on this item at the next scheduled meeting. Mrs. Schriever said they were anticipating putting the item on the consent calendar; therefore, it would not be a scheduled item.

Mr. Macdonald said being the first City to approve the BLU program this could either be a moment of pride or fear. He wondered if this decision could be unexecuted if no other cities joined. Mrs. Schriever said the agreement would not have been approved yet. She said that all of the other stakeholders had been involved in the program’s development, and had all indicated that they were on board and excited about the prospect of the program.

Mr. Lentz moved, by resolution, to authorize participation in the small business loan program administered by the Business Loans of Utah (BLU) and finding that the appropriation of money to the BLU Fund meets the requirements of Utah Code § 10-8-2 with the amendment reviewed by Mrs. Schriever. Mrs. Lauret seconded the motion. Those voting aye: Richard F. Brunst, Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner. The motion passed unanimously.

6:00 P.M. PUBLIC HEARING – Street Vacation – 750 East between 800 & 900 SouthORDINANCE – Vacating approximately 0.69 acres of 750 East Street located between 800 South and 900 South


Mr. Bench presented University Mall LC and Catania SFH, LLC request that the City Council vacate a portion of 750 East between 800 South and 900 South. The Department of Development Services recommended that the City Council, by ordinance, vacate approximately 0.69 acres of 750 East Street located between 800 South and 900 South.

Currently, 750 East was a dead end street without a connection to 800 East. The existing homes on both sides had been purchased by University Mall Shopping Center, LC and Catania SFH, LLC which were partnering to re-develop this area.

University Mall and Catania SFH, LLC now requested that the City vacate 750 East from 800 South to 900 South. Typically, upon the vacation of a public street, half the street area reverted to the property on one side and the other half reverted to the property on the other side.

University Mall LC and Catania SFH proposed to use the vacated street area for future development in the PD-34 zone.The City Council may vacate the portion of 750 East Street between 800 South and 900 South if it found (1) there was good cause for the vacation, and (2) the vacation would not be detrimental to the public interest. The applicants should be required to record a subdivision plat that combined the area of the vacated street with the rest of their property and included public utility easements in a portion of the vacated street. The applicants should were also required to disconnect the existing water main in the vacated street at 800 South and 900 South and plug the existing sewer main in the vacated street at 800 South in accordance with City specifications within two years.

Mayor Brunst asked about the street vacation. The applicant came forward and said the main reason the road needed to be vacated was to provide flexibility for future use of the area.

Mr. Macdonald asked if vacating the road would prohibit people from accessing 800 South. Mr. Bench said it would not, but it would be a private access. Mr. Macdonald noted that the previous landowner had dedicated the property at no cost to the City. Mr. Macdonald said if the road was vacated it would be required to go to the new landowners, and Mr. Bench confirmed that was the case.

Mrs. Lauret asked if, upon vacating the road, the new landowners would assume responsibility for snow removal. Mr. Bench answered affirmatively.

Mayor Brunst opened the public hearing. No one came forward, and he closed the public hearing.

Mayor Brunst moved, by ordinance, to vacate approximately 0.69 acres of 750 East Street located between 800 South and 900 South. Mr. Macdonald seconded the motion. Those voting aye: Richard F. Brunst, Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner. The motion passed unanimously.

6:00 P.M. PUBLIC HEARING – Quarterly Budget AmendmentORDINANCE – Amending the Current Fiscal Year 2017-2018 Budget


Mr. Manning presented the City Manager’s recommendation that the City Council hold a public hearing to discuss amending the current Fiscal Year 2017-2018 Budget and, by ordinance, amend Fiscal Year 2017-2018 Budget.

The Fiscal Year 2017-2018 City of Orem budget had many adjustments that occurred throughout the fiscal year. These adjustments included grants and donations received from Federal, State, and other governmental or private entities/organizations; additional funds received for the Well #10 construction project; adding additional project funds due to interest earnings on the Siemens energy savings improvement lease escrow account unspent funds; adjusting CARE Tax accounts due to reconciling Fiscal Year 2016-2017 to actual taxes received; and various other smaller technical corrections or minor budget adjustments that need to be made.

Mr. Manning turned the time over to Mr. Nelson who reviewed the proposed amendments listed above.

Mayor Brunst asked how the municipal recreation grant fit in with the library, and Mr. Nelson said it did not. He said it was purely used in the recreation department, and in the past those grant funds had gone towards Lakeside Park, the fitness center, City Center ballpark, etc.

Mr. Nelson detailed the proposed amendments as follows: A separate fund for the Drug Task Force was created to help better monitor its monies. Grant funding was received for the skills park.

o Mr. Nelson said the grant was a matching grant, so there were contingency funds the City would be contributing as well. No budget amendment necessary because it was just a transfer.

Last June the City received a payment from Metro Water to go towards construction on Well #10. Those funds needed to go into a capital project account in order to be used. Mr. Nelson showed how those funds were being appropriated from the prior fiscal year to the present fiscal year.

The Senior Center had a fund balance and was proposing to use the money to purchase new exercise equipment.

The energy lease had funds that continued to earn interest. Budget amendments were proposed so those funds could be used for other projects.

In response to a question from Mr. Seastrand regarding liability in event of an accident, Mr. Nelson said he did not believe any claims had ever been filed. Mr. Davidson said staff would do their best to maintain and manage park facilities as best as possible.

Mr. Lentz said there were many people in the community who were excited about the skills park and wondered if having nonprofessionals helping build the park would open the City up to additional liability. Mr. Nelson said the best action the City could take was to ensure it was built and maintained correctly.

Mayor Brunst opened the public hearing, but when no one came forward to speak, he closed the public hearing.


Mr. Spencer asked what the City’s budget was for finishing the skills course. Mr. Nelson said he thought the budget was $65,000. Mr. Bybee said there was a total budget amount that was created for all of the features shown in the concept drawings. The total project was agreed upon for the grant award from the Governor’s office, who oversaw the grant. In order to receive the $30,000 from the Governor’s office, the City had to complete the entire scope of the project that was submitted.

Mr. Davidson said Provo had submitted a similar grant and they only received $25,000. He commended staff for obtaining the grant money.

Mr. Seastrand moved, by ordinance, to amend the Current Fiscal Year 2017-2018 Budget. Mr. Lentz seconded the motion. Those voting aye: Richard F. Brunst, Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner. The motion passed unanimously.

COMMUNICATION ITEMS

There were no Communication Items.

CITY MANAGER INFORMATION ITEMS

Mr. Davidson discussed a recent meeting with the Sharon Park neighborhood in which a proposal for Pickleball courts was reviewed. Staff had since followed up on the meeting and modified a few options, which were then sent to the neighborhood for consideration. He turned the time over to Mr. Downs for a report.

Mr. Downs reported that there may be another place for the courts. He said having six courts would keep them from becoming a tournament location, which was desirable because parking was a challenge in the neighborhood. Mayor Brunst asked if they would be taking out the trees to the north and west of where the six courts would be located, and if they would be putting in green space and moving the trail. Mr. Downs answered affirmatively and explained that while there were some trees and green space that would be removed, others would be added elsewhere.

Mr. Davidson said neighbors had expressed concern about the hours of operation, fencing, dumpsters, and if there was an intent to continue with improvements in the park. He said it was the City’s intent to operate the park in a way that provided community enjoyment while being respectful of the neighborhood. There had been some discussion about whether or not to mask the courts in and around the fencing, but staff decided against this in an effort to deter mischief. He asked the Council for their feedback, and said staff would like to move forward because there was a narrow window of opportunity to build the courts before the weather turned bad.

The consensus of the Council was to move forward.

Mr. Lentz said Provo had some tennis courts striped for Pickleball and asked if that was possible for some of Orem’s tennis courts as well. Mr. Hirst said when staff painted Orem’s tennis courts they got one-for-one.


Mayor Brunst expressed appreciation to everyone involved in the project, and for addressing the neighborhood’s concerns.

ADJOURNMENT

Mr. Spencer moved to adjourn the meeting. Mrs. Lauret seconded the motion. Those voting aye: Richard F. Brunst, Debby Lauret, Sam Lentz, Tom Macdonald, Mark Seastrand, David Spencer, and Brent Sumner. The motion passed unanimously.

The meeting adjourned at 7:19 p.m.

Donna R. Weaver, City Recorder

Approved: November 14, 2017


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