CITY OF OREM
CITY COUNCIL MEETING
56 North State Street Orem, Utah
October 26, 2010
4:00 P.M. STUDY SESSION
CONDUCTING
Mayor Jerry C. Washburn
ELECTED OFFICIALS
Councilmembers Margaret Black, Carl Hernandez III,
Karen A. McCandless, Mark E. Seastrand, Mary Street, and
Brent Sumner
APPOINTED STAFF
Bruce Chesnut, Interim City Manager; Jeff Pedersen,
Assistant City Manager; Paul Johnson, City Attorney; Richard
Manning, Administrative Services Director; Stanford
Sainsbury, Development Services Director; Mike Larsen,
Public Safety Director; and Donna Weaver, City Recorder
DISCUSSION – Bicycle and Pedestrian Plan
Paul Goodrich, Transportation Engineer, reviewed the process they went through with the Orem
Bicycle and Pedestrian Plan, which involved:

Survey to see what residents would like to have

Look at other Bike Plans to consider what others have done

Held a public meeting on January 19th with over 100 attendees
o Many were surprised the City had not already prepared a plan

Follow up web survey with almost 800 respondents
o Many preferred off-street paved bike paths
o Second preference was on street bike lanes
Mr. Goodrich then reviewed the differences between the various kinds of bike lanes/paths.
Mr. Seastrand asked whether there is room for all of them on both sides of the street. Mr. Goodrich
explained that the plans show many options that could be used from the “tool box”. They do not have
the answer for specific tools for a given street.
Mr. Goodrich then noted that several Councilmembers and staff participated in a field trip to
Boulder, Colorado on June 2nd. They learned many things from that experience, such as real change
taking time and the need to be persistent. There are also many opportunities for funding available.
As a result of this whole process, they decided to come up with a Phase 1 Priority Map that could
achieve some real results over the next few years. There are some nice bike lanes on 400 North west
of State Street, but the paths do not connect to anything. The Phase 1 Plan provides some
connectivity. They also wanted to have a vision map. They want the plan to be flexible so it can grow
and develop over time, and it may need to be updated every three to five years.
City Council Minutes – October 26, 2010 (p.1)
Mr. Goodrich advised that staff did another survey and put the Phase 1 Map on the City website.
They explained the City’s priorities and asked for the public’s priorities. The 800 North trail
expansion was the highest rated project from the survey. Intersection improvements were suggested,
along with curb extensions, signal improvements, and new signals (HAWK).
Staff considered doing a complete streets policy so when an opportunity comes up, a street can be
considered even if it is not on the priority map. They also came up with a list of recommended
exceptions for putting in bike paths, such as on I-15. The consultant looked at what the City did with
the Utah Department of Transportation (UDOT) on 800 North. The survey included a question
asking if people wanted to have the City Council do a complete streets policy. Those that responded
strongly wanted one.
Mr. Sumner asked if State Street was in the Plan. Mr. Goodrich stated that State Street needs to have
a lot of work done to it before it is ready to be included in the Plan.
Mayor Washburn asked about the sidewalk widths on State Street. Mr. Goodrich replied the widths
vary. An eight-foot sidewalk with one-foot clearance on each side would be needed.
Mr. Sumner observed that it would be necessary to remove parking on State Street to do that, and
Mr. Goodrich concurred. There are many members of the staff committee who would consider
suggestions and then take them to the Transportation Advisory Commission. He reaffirmed that this
plan is a “living thing.”
At the suggestion of Mr. Gifford, Mr. Goodrich reviewed the list of Phase 1 projects.
Mr. Gifford noted the cost of additional street striping is a budget issue that needs to be considered.
Mayor Washburn said he is impressed with all of the resources that have been compiled to help them
forge ahead. He then asked Brad Woods, Transportation Advisory Commission, how he felt about
where the City has been going with the Bike Plan. Mr. Woods said he is thrilled with the direction
the City is going. The Plan is not perfect, but the City is making progress.
Mayor Washburn thanked Mr. Woods for his efforts with this. He has been in valuable to the City.
Mrs. Black noted the proposed 400 East project has a cost listed of $90,000. She wondered if that
would be less if it is done with the reconstruction project. Mr. Goodrich replied they already took
that into account, so that is the actual cost.
Mrs. Black inquired whether they hope this will be a five-year plan. Mr. Goodrich said Phase 1 will
take approximately five years. Most of the money so far has come from the Mountainland
Association of Governments (MAG). They are going to meet with Provo, Vineyard, and Lindon to
see all of the opportunities for connecting.
Mrs. Street advised that she notices the bike lanes on the roadways now, and it changes her mind set
when she sees the markings. It slows her down. The phased plan is a great plan even if it means
doing it with pieces that do not interconnect.
City Council Minutes – October 26, 2010 (p.2)
Mrs. Street then asked about using Community Development Block Grant (CDBG) funding for this.
Mr. Gifford explained it would have to be done in a neighborhood that qualifies. If it does, it can be
considered.
Mr. Goodrich added that CDBG funding is being used to finish curb, gutter, and sidewalk on
Columbia Lane. Bike lanes will be painted even though that project is not on the map.
Mrs. Street then questioned if the restriping can be done when other groups have to tear up the
streets. Mr. Gifford said most of those projects are too small.
Mr. Seastrand remarked that he loves the vision in the Plan. He likes the cost effective approach;
however, he is concerned with the element of having the lanes done in a patchwork sort of way. He
would prefer more continuity. He would like to look at future maintenance plans to see if there is a
way to tweak the schedules to complete a route.
Mayor Washburn commented that they have received funding for the Murdock Canal enclosure to
make a magnificent trail, which will also be a connector. They need to be aware of Federal funding
that might be available for this type as a transportation issue. There will be fewer earmark
opportunities in the future. Mayor Washburn said he spoke with a congressman who is against
earmarks about this issue, and he advised there are other funding mechanisms in Congress, such as
grants or specific legislation. Mayor Washburn stated that he does not know how difficult it will ne
to put this together, but he is going to take the congressman at his word that he will support efforts to
fund projects like this. Mayor Washburn said he would like the Transportation Advisory
Commission to really look at options like this.
Mayor Washburn then wondered where they plan to go from here. Mr. Goodrich said they need to
adopt the Plan. They cannot get Federal funding without one. The City Council will have an
opportunity to approve the plan in two weeks, and the public will have an opportunity to speak to it
at that time. Every year UDOT has enhancement funds that could be applied.
Mrs. McCandless noted that her wish list for next year would be looking at a complete Streets Plan.
Mr. Goodrich replied that if this Plan is adopted, they will.
Mrs. McCandless inquired whether this would be an opportunity to look at the lane markings in
general to see if they should be reconsidered. Mr. Goodrich indicated there will be some before and
after studies done in advance. The next budget request will include funding for some of these
projects—for both construction and subsequent maintenance.
5:00 P.M. STUDY SESSION
CONDUCTING
Mayor Jerry C. Washburn
ELECTED OFFICIALS
Councilmembers Margaret Black, Carl Hernandez III,
Karen A. McCandless, Mark E. Seastrand, Mary Street, and
Brent Sumner
City Council Minutes – October 26, 2010 (p.3)
APPOINTED STAFF
Bruce Chesnut, Interim City Manager; Jeff Pedersen,
Assistant City Manager; Paul Johnson, City Attorney; Richard
Manning, Administrative Services Director; Stanford
Sainsbury, Development Services Director; Mike Larsen,
Public Safety Director; and Donna Weaver, City Recorder
REVIEW OF AGENDA ITEMS
The Council and staff reviewed the agenda items.
CITY COUNCIL NEW BUSINESS
Councilmember Black
Mrs. Black invited the City Councilmembers to attend the Lights on Celebration activity on Monday,
November 22nd and to be there at 5:30 p.m.
She also reminded everyone about the Veterans Program and parade on Saturday, November 6th. The
parade starts at 9:00 a.m.
Councilmember Sumner
Mr. Sumner asked about a Spice drug ordinance.
Mrs. McCandless said she was in a meeting with Officer Yolanda Stewart, and she said it has not
been a problem in Orem.
Mr. Chesnut said he will talk with Public Safety to see where they want it go.
Greg Stephens, Deputy City Attorney, stated that the Legislature is looking at a bill being proposed
for the upcoming session.
Mrs. Black wondered why Orem should wait for the Legislature. Knowing that a business in Orem is
selling it disturbs her.
The general consensus was to have staff prepare something for the Council to consider.
CITY MANAGER INFORMATION ITEMS
Mr. Chesnut advised the Williams Farm bid closed yesterday, and there is one legitimate bidder
higher than Orem. The property will go to auction.
The Council adjourned at 5:55 p.m. to the City Council Chambers for the regular meeting.
6:00 P.M. REGULAR SESSION
CONDUCTING
City Council Minutes – October 26, 2010 (p.4)
Mayor Jerry C. Washburn
ELECTED OFFICIALS
Councilmembers Margaret Black, Carl Hernandez III,
Karen A. McCandless, Mark E. Seastrand, Mary Street, and
Brent Sumner
APPOINTED STAFF
Bruce Chesnut, Interim City Manager; Jeff Pedersen,
Assistant City Manager; Greg Stephens, Deputy City
Attorney; Stanford Sainsbury, Development Services
Director; Richard Manning, Administrative Services Director;
Steve Earl, Assistant City Attorney, and Donna Weaver, City
Recorder
INVOCATION /
INSPIRATIONAL THOUGHT
Paul Overson
PLEDGE OF ALLEGIANCE
Franklin West
APPROVAL OF MINUTES
Joint Orem/Provo City Council Meeting of October 6, 2010, City Council Retreat of October 8,
2010, City Council Meeting of October 12, 2010, and the Joint Orem City Council/Alpine
School District Meeting of October 13, 2010
Mr. Seastrand moved to approve the minutes of the Joint Orem/Provo City Council Meeting of
October 6, 2010, City Council Retreat of October 8, 2010, City Council Meeting of October 12,
2010, and the Joint Orem City Council/Alpine School District Meeting of October 13, 2010. Mrs.
Street seconded the motion. Those voting aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr.
Seastrand, Mrs. Street, Mr. Sumner, and Mayor Washburn. The motion passed unanimously.
MAYOR’S REPORT/ITEMS REFERRED BY COUNCIL
Upcoming Events
The Mayor referred the Council to the upcoming events listed in the agenda packet.
Upcoming Agenda Items
The Mayor referred the Council to the upcoming agenda items listed in the agenda packet.
Appointments to Boards and Commissions
There were no new appointments.
Recognition of New Neighborhoods in Action Officers
Mrs. Johnson reviewed the plans for the third annual Lights On program scheduled for Monday,
November 22, 2010. She invited everyone to attend. It will be held on the west lawn of the City
Center. This is an event where the Christmas lights are turned on, and they also encourage service
and charity.
Mrs. Johnson indicated she has about four neighborhoods without chairs, and she has placed maps in
the hallway identifying those neighborhoods for people to look at and consider volunteering.
City Council Minutes – October 26, 2010 (p.5)
PROCLAMATION – Feed America Day – November 18, 2010
Mrs. McCandless read a proclamation for Feed America Day on November 18, 2010.
Mr. Seastrand moved to proclaim November 18, 2010, as Feed America Day. Mrs. Black seconded
the motion. Those voting aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr. Seastrand, Mrs.
Street, Mr. Sumner, and Mayor Washburn. The motion passed unanimously.
PERSONAL APPEARANCES
Time was allotted for the public to express their ideas, concerns, and comments on items not on the
agenda.
No one came forward to speak.
CONSENT ITEMS
There were no consent items.
SCHEDULED ITEMS
6:00 P.M. PUBLIC HEARING
RESOLUTION - Authorizing and Approving the Execution of a Communications Service
Contract, Dated as of November 1, 2010, By and Among the City, Certain Other Cities, and the
Utah Infrastructure Agency; and
RESOLUTION - Authorizing and Approving the Execution of an Amended Interlocal
Agreement Establishing the Utah Infrastructure Agency
Richard Manning, Administrative Services Director, presented a staff recommendation that the City
Council, by resolution,
1. Authorize the Mayor to execute the Communications Service Contract with the Utah
Infrastructure Agency.
2. Authorize and approve the execution of an amended interlocal agreement establishing the
Utah Infrastructure Agency.
Mr. Manning introduced Bruce Carpenter, Lindon City Councilmember and UIA Chairman of the
Board; Dave Shaw, legal counsel for UIA; and Curt Sudweeks, UTOPIA Chief Financial Officer.
UTOPIA (Utah Telecommunications Open Infrastructure Agency) was established by a consortium
of cities to provide broadband fiber optics to each home and business. Fiber strands carry
information at the speed of light, making it the technology of the future. Cities that have it possess a
significant advantage over others in terms of attracting and keeping businesses which are looking for
increased internet capacity.
Orem is a member of UTOPIA. In previous years, Orem has pledged sales tax revenues to back
bonds issued by UTOPIA.
City Council Minutes – October 26, 2010 (p.6)
The Utah Infrastructure Agency (UIA) was created this past summer by a group of cities that are also
members of UTOPIA. It was established in large part for the purpose of issuing bonds that, by
contracting with UTOPIA, will allow the fiber-optic network commenced by UTOPIA to continue to
grow so that all the member cities can have the network operating within their boundaries.
The proposed service agreement is between the City and the UIA. UIA commits to provide network
connections in the City (by issuing new bonds), and the City agrees to pay the UIA ninety-five
percent of the amounts billed to the end users. The City’s commitment is backed by a pledge of the
franchise tax. It is contemplated that, as the UIA expands the network, profits will help to reduce or
even eliminate the original pledges the City made to UTOPIA. Those pledges will have to be paid
regardless of the City’s action tonight. This service contract will give the City the opportunity to
minimize the amount it will have to pay on those pledges.
Approving the agreement allows UIA the chance to grow the network, which would help the City not
only reduce the amount they may have to pay on their original pledges, but make it an attractive
place for businesses looking to relocate and provide unparalleled internet capacity to the residents in
their homes.
While nobody can guarantee that UIA’s new model and business plan will be as successful as
desired, UIA has received an independent feasibility study done by Design Nine that is positive in
this regard. Design Nine is a nationally recognized municipal telecommunications consulting firm
located in Virginia. It is one of a very few firms in the United States with experience in open access
broadband networks.
Mr. Shaw explained that the second amended and restated agreement is simply an amendment to the
original Interlocal agreement adopted in June. It makes minor technical changes such as the
recognition of the new service contracts between each city and the UIA, and makes it clear that each
city’s obligation to pay is subject to the annual appropriations and budgetary process. Some of the
references were antiquated and are being removed at bond counsel’s recommendation.
Mr. Shaw continued saying there is a resolution authorizing approval of a communications service
contract. The wholesale infrastructure is available to vendors in the various communities. The
communication service contract provides a definitive relationship between the UIA and the cities.
The cities would contract to purchase services from the UIA and provide those services to the
residents in their communities. This brings the management to a much more local level and gives the
local communities more control. However, it does not require either entity to hire staff but to rather
contract with UTOPIA to provide the services to the end users. The end users will remit payment to
the cities, and the cities will then remit payment to UIA to pay for the bonds. This establishes a
definitive relationship whereby the fees flow up for the payment of the bonds, operation, and
maintenance. It sets forth the financial basis required to obtain financing. There needs to be a
dedicated source of revenue from each city in the event that end user fees are insufficient. This
revenue will come from franchise taxes. The bonds would be UIA bonds.
Since 2008, the cities of UTOPIA refinanced the UTOPIA debt and made a change in management.
The new management put in a number of new business strategies. The network was built in
Tremonton and Brigham City, and those residents were connected. UTOPIA has been successful at
City Council Minutes – October 26, 2010 (p.7)
connecting a significantly higher number of residents since 2008. The business model for UIA is
ground in reality. A special assessment area was established in Brigham City, and they learned many
things from that experience. The residents were willing to pay $3,000 to have the system connected
to their homes, and they had a thirty percent take rate before the bonds were ever issued. This proved
there is a demand for the system, and it is possible to get sufficient take rates. In the future it will not
be necessary for people to put a lien on their homes as they did in Brigham City. The UIA model was
vetted extensively for several months. They also retained a nationally recognized consulting firm
called Design Nine to perform a feasibility study on the new model. The question was whether there
would be sufficient revenues for UIA to pay the operation, maintenance, and debt service. The
feasibility consultant said the answer was yes assuming the take rates were as proposed. The
consultant also stated the proposed take rates were conservative.
As part of the study, there was an alternate financial model that is not the UIA model but was used
by Design Nine to compare it with others and determine if it was still valid. The conclusion was that
the model was valid. They feel confident that UIA is on solid footing. The service contract was put
into place to do the financing, and the business model will be implemented.
Mr. Shaw advised that the question has been asked what would happen if nothing is done. There are
four options. The first would be to close up shop, and the cities would pay off the UTOPIA debt for
the next thirty years. The network would cease to function, and users would be out of service. The
second option would be to pay for the existing service but there would not be new users. The cities
would still need to make up the difference. The third option is to sell the network; however, he is not
aware of anyone interested in buying it. IProvo tried to sell theirs and had to take it back. The fourth
option is the possibility of moving forward with driving network penetration, increasing users, and
keeping existing ones. That is the option he is proposing right now.
The communication service contract will facilitate the Cities in providing the wholesale network
services to the end users. The end users will pay the Cities for the physical connection to the network
and for the capacity of the pipe. They will pay the private providers for the services. This is very
much akin to an electric service. If a resident wants an upgraded installation, they would have to pay
for the installation and also pay for capacity.
Mr. Carpenter indicated he was selected to represent Lindon on the UTOPIA Board a little more than
two years ago. One of the clear issues facing UTOPIA was how they can allow things to move
forward. The Board set three priorities for themselves, which were as follows:
 Find relief for the cities regarding the pledges
 Fulfill the commitment to create a network
 Create equity in the network
Mr. Carpenter said he and others have felt a responsibility to the other cities that have not benefitted
in the early stages of development as some of the other cities have. With the change in the economy,
many cities are “cash strapped,” and whatever the Board came up with could not require the cities to
front cash to get them to a better position. The remaining contingency was to help the cities receive a
level of careful management and to put a better interaction and control through the entire board
system and back to the cities. As they created the UIA, they have mostly focused attention on this
model because they needed to create a structure that gives cities confidence. Each city has an
City Council Minutes – October 26, 2010 (p.8)
appointed Board member. Mr. Manning is Orem’s representative. In recognition of the importance of
Orem and the fact that Mr. Manning is a very capable representative, Mr. Manning has been elected
as 2nd Vice President on the UIA Board and also to the Executive Committee with no voting abilities.
Mr. Manning will have week-by-week interaction, and he has been charged to make sure the Council
knows everything that is going on. They are currently in the process of developing more regular
benchmarks and organized reports to account for how homes are being contacted, where sales are
occurring, how installations are keeping up with sales, and what complaints are received. They
intend to come up with a full set of metrics that will track what is being accomplished. The
weighting of the UIA Board is based upon population, so Orem has about one fourth of the voting
power. Mr. Manning serves and votes at the Orem City Council’s pleasure. The anticipated bonding
is expected to go in several different disbursements in order to see immediate returns. They will also
utilize stimulus funds where available. The additional issuing of bonds will depend upon the
benchmarks they have set. There are three council members on the UIA board and three city
managers who will ensure the benchmarks have been reached. This dramatically reduces the risk.
The presales will trigger further bonding. The first draw down on bonds is to help them move
forward. They hope they have put something in place that makes the councils feel a part of what is
going on and gives them some reassurance.
Mr. Seastrand noted the bond being discussed this evening would set up a $62 million line of credit.
They will use an initial $20 million, and the remaining amount would only be available if certain
levels are reached.
Mr. Carpenter said that is correct. It is their hope the demand would cause them to draw down the
bonds rather quickly, but if it takes longer, that is fine also.
Mr. Seastrand expressed his understanding that Mr. Manning is one of the key spokespersons on the
Board in terms of monitoring and keeping track of the performance to those expectations prior to any
future utilization of the funds, and there is not an automatic usage of the funds without some pretty
tight constraints.
Mr. Carpenter said that is also correct. He noted he would expect the cities to be upset if those
benchmarks were not followed, and they should be. As a council member, he would be extremely
upset if the Board slipped something by.
Mr. Seastrand asked for clarification of how the first allocation would be used. Mr. Sudweeks
explained the bond was going to be in the $20 million range when they first put the model together.
They were later granted a stimulus of $16 million of Federal funds that has a thirty percent match, so
the first draw will be $25 million to help cover that match. Of that amount, $18 million will go to
construction, $2.5 million will go to the issuance costs and the debt service reserves, and $4 million
will go towards the operational shortfall and the development of systems to improve efficiencies at
the office. This amount should cover the shortfall for twelve months.
Mrs. Black asked what would happen if the City does not want to go beyond the first allocation of
$25 million.
City Council Minutes – October 26, 2010 (p.9)
Mr. Shaw said that in order to move forward it would require the UIA Board’s approval. That is part
of the bond issuing agreement. They are expecting to draw on the bonds in three separate
transactions, and each issuance requires a vote of the UIA Board.
Mrs. Black requested clarification that Orem has approximately twenty-five percent of the votes on
the Board. Mr. Sudweeks stated that is correct.
Mr. Sumner asked for further explanation about the franchise tax. Mr. Shaw explained there are two
components to the service contract. The first is the user fees that are generated by the user and paid
to the cities, and the user fees are then remitted to the UIA. If the user fees across the aggregate of all
nine cities are insufficient to pay the UIA operations, maintenance, and debt service, the Energy
Sales and Use Tax pledge would be drawn to the extent of the shortfall. If users are using the system,
there is no use of the Energy Sales and Use Tax.
Mr. Carpenter noted the customer usually pays those taxes to the franchise holder that then remits the
funds to the cities.
Mr. Hernandez indicated the representation was made to the cities at the beginning of this venture
that the full build-out cost of UTOPIA would be about $400 million. The cities have pledged to date
$185 million in Sales Tax Revenues to pay back those bonds in the event that revenue funds are
insufficient. The $62 million pledge, if approved, is released to the UIA to authorize issuance of the
three stages of the bond.
Mr. Shaw said that is true, and it does not require any further action from city councils; however,
nothing prohibits the councils from directing their staff members on the Board to take a certain
voting position.
Mr. Hernandez reiterated that the decision tonight would potentially authorize $62 million. That is
still substantially less than the $400 million anticipated. He asked if the Cities would have to come
up with a larger amount if another city was not able to make their payment.
Mr. Shaw said each city would only be responsible for its own percentage. The likelihood of
reaching that maximum is rare because that would mean no new customers were connected.
Mr. Hernandez questioned why they shifted from the Sales Tax to the Franchise Tax.
Mr. Shaw said Utah law allows the financing of a Municipal Telecommunications Network with
Sales Tax Revenues; however, the pledge cannot exceed fifty percent of the total expected cost of the
network. They are very near that threshold with the $185 million, so it is contemplated that the
remainder of the network would be funded through network revenues, which is what is happening
with the Communications Service Contract. The revenues from the end users will flow to the cities,
and the cities will pay those revenues to the UIA. However, in order to provide bondability on the
project, there is a need to provide a dedicated source of city revenue as the payment of that
obligation. The Energy Sales and Use Tax is the mechanism for providing that source of revenue.
City Council Minutes – October 26, 2010 (p.10)
Mr. Hernandez wondered what would happen if the UIA decided to use the full $62 million and
found that it was not enough.
Mr. Shaw indicated the $62 million is a five-year build-out plan. As with most business plans, it is
less reliable the further out it goes. He said he could probably theorize ways to finance beyond the
five years; however, the most likely scenario would be that at that point they will have been very
successful. If not, they would not have drawn on the entire $62 million. Further draws will imply that
they have been successful. He noted he cannot predict that there will not be a dedicated revenue
source needed at that point. Even with the $62 million, the network will not be completed. The plan
all along has been to get to a point where the revenues of the system are sufficient to fund the
additional growth.
Mr. Hernandez remarked that he likes the three E’s they came up with--equalizing, expanding, and
equity. These are important aspects for the City Council. Mr. Carpenter responded that he would like
all of the cities to have as much benefit as his city has.
Mrs. Street indicated there are nine cities that have joined UIA. She wondered how that impacts
Orem’s obligation because not all of the UTOPIA cities are a part of the UIA.
Mr. Shaw explained that there are two separate agencies. UIA contracts with UTOPIA for services. If
there were more cities in UIA, there would be a need for more services. There were two cities that
opted out of UIA, so there is some inequity. It increases the obligation to a small percentage;
however, the two cities who are not participating are two of the smallest cities. Lindon is about
ninety-five percent built out but is still participating to help share the burden. Tremonton is also
ninety-five percent built out but is not participating. Perry City is the other city that is not
participating. The UIA revenues will pay for operations, maintenance, and the debt service. Anything
over those costs is for the UIA cities to do with as they wish. That includes giving it back to the
cities. There is a potential for a revenue source to offset the UTOPIA pledge payment. It is an excess
in the aggregate amount over all the UIA cities, and it would be a proportionate share.
Mr. Carpenter stated that in the initial stage they are trying to limit the pledge payment burden.
Mr. Shaw noted the cities that are not participating in the UIA will not get that benefit. Mr. Carpenter
added that the cities not in UIA will also not have access to neither surplus nor increase in the
network.
Mrs. McCandless asked if Orem has paid any money to UTOPIA. Mr. Shaw replied it has. All of the
pledging cities have. The UIA plan has another upside potential, which is in five to seven years there
should be a thirty percent relief to the pledge payments. Another point that bears mentioning is that
the thirty percent is based on a conservative take rate. The one key factor that relieves tax pledges
and drives growth better than anything else is the use of the network.
Mrs. Black asked what advantages there are for Orem to do this.
City Council Minutes – October 26, 2010 (p.11)
Mr. Carpenter said network growth is a big item. It drives businesses that are tied to
telecommunications. Another is pledge relief, and it also offsets the matching funds required to
receive stimulus monies.
Mrs. Black requested clarification that this would help Orem in the fifth year to reduce the UTOPIA
pledge, and they would be able to cover the debt service with the new bond.
Mr. Shaw stated that is correct. He then explained that the debt service of the new bond is anticipated
to be covered by the new service revenues as well as the contracted services from UTOPIA. The
cities not included in UIA would be expected to pay the operational costs. It is anticipated that the
downside risk is that no new customers are signed up. Orem would still pay one-third less going
forward than if nothing else was done. The only other scenario that would cost less than that is for
them to close up shop and shut the network down. However, there would be a lot of other fallout
from that decision.
Mrs. Black indicated Orem would still be paying for the next thirty years for nothing. She then
wondered what the value would be if a buyer came along.
Mr. Shaw said the only comparison would be the IProvo system. Provo sold the asset, yet Provo is
still responsible for the bonds. At this point, the buyer has not been making its payments.
Mrs. Black questioned if selling the network would be enough. Mr. Shaw replied that they could not
sell it for enough to cover the debt.
Mr. Sumner advised that Provo has lost control of its system but is still obligated to make the
payments. He then asked what Lindon’s take rate is. Mr. Carpenter said the fiber is in front of ninetyfive percent of the homes in Lindon, and during the first phase they had a thirty-three percent take
rate. However, there has been no effort to go back to sell new connections in Lindon. They only have
the original connections.
Mr. Shaw noted that once the $3,000 connection fee is paid off, it is paid off. Every communication
company has connection costs. Users are paying for it, but they cannot pay for it up front. That cost
is embedded in the monthly service charge.
Mr. Hernandez asked how many customers UTOPIA has to date.
Mr. Sudweeks said there are nearly 9,000, and 3,000 of them have signed up since 2008.
Mr. Hernandez inquired what the annual payment would be if $62 million is borrowed but no new
users sign up.
Mr. Sudweeks stated that it would cost an additional $1.2 million; however, that scenario would
never happen.
Mr. Hernandez asked what the “tipping point” would be from a financial perspective to say this is
not working. Mr. Shaw said it depends upon how critical the network is to the cities. He said he is a
City Council Minutes – October 26, 2010 (p.12)
Lindon resident. He commends the city for having beautiful parks, and although he never uses them,
he pays for them. His business is in Orem, and one of the prime reasons for him locating here was
the office space and the communications available. Mr. Shaw then reviewed the four options before
the Council.
Mr. Manning explained that the plan presented today is based upon what has worked over the last
two years. They have had people pay for their own connections. If that did not repeat itself in the first
issuance, the only reason to go on would be a policy decision.
Mr. Hernandez stated that he appreciates it being a policy decision. He is trying to anticipate the
financial impact on future generations. There is a possibility of an $88 million obligation for the
City, which is daunting. He said he hopes it will be the assumption that it will require they have a
thirty-five percent take rate in order continue drawing on the bond.
Mr. Carpenter clarified that the thirty-five percent take rate is what would make it possible to send
money back to the cities.
Mr. Sudweeks indicated they determined the take rate they would need before they would spend any
construction dollars in a new area, and that was twenty-five percent.
Mr. Hernandez said in Brigham City there was a thirty percent take rate in the first wave, and that is
the basis for this decision making. If that percent is not reached, they may have to revisit it and
decide what the tipping point is.
Mr. Shaw explained that before 2008, the business model was to build the network and people would
use it. This model is completely different. UTOPIA will build when people commit to using the
network.
Mayor Washburn opened the public hearing.
Paul Overson, resident, provided the Council with a handout. He said he is a little concerned about
what they think the future might bring. He is in the entertainment industry and has seen the Federal
Communication Commission use the technology of wireless microphones to create a whole new
“Super Wifi.” Billions of dollars have been spent to purchase that space from about 700 megahertz
and higher. It appears the technology companies are getting away from the necessity of having things
plugged into a fixed point. Everything is going wireless. Many people have an iPhone or an iPad.
Dell has also come out with a device called the Streak. Those types of devices will go onto a G4 or
G5 network. The need to be tethered to a wire is going away. They are even developing Satellite
Wifi. He does not think the take rate will be as high as is being hoped. Businesses will be going to
wireless devices because their employees will demand it.
Benjamin Devey, resident, noted the fact that no investors are interested in purchasing the system
should tell the Council something about the viability of the network right now. He stated the
taxpayers do not need a larger tax burden. This is a consumer optional commodity and should not be
viewed as infrastructure such as roads. UTOPIA has not turned a profit, and technology is usually
obsolete in two years. He recommended the City Council make no further financial commitment to
City Council Minutes – October 26, 2010 (p.13)
UIA or UTOPIA. They should also demand an audit to investigate why the previously bonded debt
has not performed as expected.
Todd Seager, resident, said UTOPIA is extremely important to him. He has an iPad and an iPhone
with the fastest wireless available right now, but they do not serve his needs at all compared to
UTOPIA. He is on the road a lot, which makes mobile connectivity very important. However, that
connectivity only comes through fiber infrastructure. What he pays for wireless services is much
higher than what he pays for UTOPIA. Some of the capacity projections are that they cannot sustain
the wireless demands beyond another ten years. UTOPIA can provide 100 times the speed that others
can. In his line of work, he has visited some large data centers. Some of them are larger than the
Word Perfect campus. These data centers are placed strategically where they have power and data
connectivity. If Orem does not have connectivity, businesses will not come. He would either have to
pay much more or move. As far as competition, he has used Qwest and Comcast in the past, and he
pays less for UTOPIA and gets better service. The other providers charge lower fees to Orem
residents than other communities because of the competition. A lot of the opposition to UTOPIA has
come from the Utah Taxpayers Association who admitted to being funded at least partially by
Comcast and Qwest. Although there are some issues in terms of funding, bonds, and the viability of
UTOPIA, it provides a needed utility to the residents as well as Orem’s economic development.
Bennett Cookson, resident, said he has been interested in UTOPIA since it started. He expressed his
disappointment that it did not come to his house. He noted he recently moved and has UTOPIA in
front of his home but was told that they are not connecting at this time. He indicated the City should
do whatever it takes to be connected. The government should be involved in this, and he would put
Internet access in the same category as roads and water. He has been very disappointed with the
private service providers.
Phil Hornberger, resident, stated he has multiple family members who have UTOPIA. They are
appreciative of the service UTOPIA provides as well as the cost for the service. His concern is that
there have been very few sign ups since 2005. The City should hold UTOPIA responsible for
showing more profitability and more sign ups, and as they do that, there would not be as much of a
concern because the residents could see that it is increasing. The City should not keep giving
UTOPIA money until they show the profitability. He expressed his opinion that UTOPIA does
provide a valuable service, and the residents are happy with the service they are getting.
Mayor Washburn thanked the residents for their comments. He explained there are consequences
with whatever decision the Council makes that evening, and the City Council needs to weigh those
consequences very heavily.
Mayor Washburn closed the public hearing.
Mrs. McCandless noted she has three different issues/questions, which were as follows:
 She asked for an explanation of wireless technology versus fiber
o Will fiber become outdated
 Privatization
o Private businesses have different objectives than UTOPIA as far as providing
revenue for shareholders within a specific time period
City Council Minutes – October 26, 2010 (p.14)
 Why has fiber has not been actively marketed in Orem but has been in other communities?
Mr. Shaw responded that wireless is great; he loves it. However, they are not mutually exclusive
technologies. While attending a BYU football game, he cannot make a phone call because everyone
else is. The further wireless applications get pushed, the greater the need for fiber. Every single
wireless tower that is out there connects to a fiber optic network. There is a tremendous push to
upgrade the fiber connectivity of the towers to make the wireless better. Fiber can hold 1,000 times
more capacity than other technologies. The theoretical limit for fiber has yet to be reached. The better
the fiber connectivity, the better the wireless service. One is not better than the other. They are both
needed.
Mr. Shaw then explained that in terms of privatization most investors want a return on their
investment within six to thirty-six months. Before the Internet bubble burst in 2000, there was a great
push in the telecommunications industry and a push to tear up streets to install infrastructure. Most of
those companies went bankrupt because the investors pulled the funding. The difference with
UTOPIA is the long-term perspective on the return on investment. The largest private company
building fiber networks is Verizon, who is selling off their outdated rural systems and concentrating
on large demographic neighborhoods.
Mr. Seastrand noted that he was appointed to the Council in 2006. The decision to go with UTOPIA
was made in 2002. In about 2008, there were some significant changes in accountability. One was to
recognize that the old model was not working. UTOPIA cut operating costs, and they were charged
with improving network operations and customer service. They were also charged to get more
service providers. They now have fourteen different service providers. They went back and tried a
couple of models, which have proved successful. When they did an audit of the different facilities, it
was determined that they were installed properly and were in excellent condition. He stated he was
encouraged with the recent feasibility study report that came back. He expressed appreciation that the
model is solid and the assumptions are actually conservative. He believes they have been trying to
find ways to go forward and hold UTOPIA accountable. He was also encouraged that the financial
risk is limited. There is a need to get people connected, and the reason they cannot get connected is
there is no funding to do it. UIA is the mechanism to make that possible. There are some areas of
concern such as a financial risk to the City; however, those risks are minimized by the checkpoints
they have in place. He is also encouraged that those who have the service are happy with it. One of
his goals is to do what he thinks is best for the residents of Orem. He has studied this as much as he
can. As he considers the four options, it is very hard with him to walk away from it. He does not
believe government should be subsidizing individuals or businesses, and they should have to pay
their own way. This model allows that to happen, and he really likes that. He does not believe that
selling is a safe option because no one will buy it if it is dying; however, there could be interested
buyers after this model is completed. It is hard for him to recommend anything other than going
forward with this model.
Mr. Sumner advised that he contacted some friends and businesses in Brigham City, and the only
negative points he received about UTOPIA is that sometimes the installation is slow. UTOPIA has
said they can do 900 connections in a month. He expressed his hope they will be able to keep up with
the number of residents who are interested in the service.
City Council Minutes – October 26, 2010 (p.15)
Mr. Sudweeks clarified that when looking at the model, they can add more than 900 customers in a
month based on how the model is built. To date they have never been able to add more than 900 in a
month. They wanted to set a standard they knew they could meet, and they can hire more installers if
the demand increases.
Mr. Sumner wondered how long it would take him to be connected in Orem. Mr. Sudweeks replied
that if the fiber is already in front of a house it will be easier to install. They expect it to be seven to
ten working days once it is in the queue.
Mr. Carpenter added that no marketing will be involved if it is already in front of a home.
Mrs. Street said she belongs to the generation that did not know what technology was and has had to
learn. There are people in the audience who have not experienced a world without fiber optic
connectivity and instant access to information. When UTOPIA first came to Orem, she was not sure
her family needed it. She called her husband to ask about it, and he came home and helped them dig
the trench. She has learned quickly how important this service is. She did not initially understand that
UTOPIA is the road all the other businesses use. This is not a closed system; it is an open system
where people can have a choice. Her service has only been down once in nine years, and that was due
to the fiber cable being cut. She expressed her belief that there is an opportunity cost in not moving
forward. She firmly believes in the technology. She said she needed to take a step back and question
the business model. An important factor to that is regaining control of the marketing. They have
looked at this long and hard because they know the price of failure. There are many people around
the country who admire what is being attempted here, and they want this to succeed.
Mrs. McCandless indicated she believes everyone wishes they were not in this situation. She
imagines a day when UTOPIA is hooked up to every home in Orem. This is not just whether she can
have TV or the Internet; she sees what it can do for education. Economic development is another
issue they have looked at. The healthcare industry is impacted by quick access. She also considers
the overall quality of life. She asked herself which option is the most responsible choice, and she
believes that supporting this proposal is the only reasonable option. This option has accountability
with the ability to stop if it is not working.
Mr. Hernandez agreed with the fundamental, philosophical decision the City Council made in 2002.
This is appropriately funded by the government. This is infrastructure needed just like a road,
highway, water, or sewer. The implementation of the models along the way have been flawed, but
there have been some course corrections. He said he is not as convinced that this is the right direction
to go. He said he is trying to give the proposal the benefit of the doubt; however he still has some
doubt. It may be the best option before them, but he is not convinced it is the right thing to do. It
seems that it is the plausible thing to do if UTOPIA is going to be a success. One thing he loves
about this community is there are professionals here they can trust. He has read all the reports, and he
understands the basic assumption. However, they have to rely on staff because there is some
information they cannot dig into because of the competitive environment.
Mrs. Black commented that this decision was made in many respects eight years ago. She does not
think they can go back and debate that decision now. The question at hand is whether to give up or
“work like a dog” to make it work. Her decision is to “work like a dog.” She agreed that the
City Council Minutes – October 26, 2010 (p.16)
benchmark is an important point for her. She also agreed that there are still questions. After studying
all of the material and considering it, it is to Orem’s advantage to make it successful. If things do not
go right with the first $25 million, she will start to think differently. UTOPIA needs to be aggressive
with a real marketing strategy.
Mayor Washburn extended his thanks to Mr. Carpenter for attending this meeting. Mayor Washburn
said the other Councilmembers have spoken wisely and articulately, so there is not much he can add.
However, if there is a $16 million stimulus available for this project, that is a real benefit, and the
proceeds will be realized as they go ahead.
Mr. Seastrand asked if the legal counsel has any concerns with the agreement. Greg Stephens,
Deputy City Attorney, advised that he has reviewed the agreement, and the City is protected if the
model works. It is more than a financial question. Regardless of what happens tonight, the City is
responsible for the UTOPIA pledges. This is a legally sound way to minimize the impact of those
pledges.
Mr. Seastrand then inquired whether Mr. Manning sees any reason for the City not to go forward
with this. Mr. Manning replied that given what has worked in the recent past, this is the most
plausible way of not having to pay all of the pledges they are obligated to and to enjoy the services
that will come with the network.
Mr. Seastrand questioned if Mr. Chesnut has any concerns. Mr. Chesnut indicated that he has also
been reading a lot to come up to date on the various issues. He agreed with Mr. Stephens and Mr.
Manning. He said as he has studied the issues and the options they have before them, and they will
“work like dogs” to make this thing work from the City standpoint.
Mrs. Black moved, by resolution, to authorize and approve the execution of an amended interlocal
agreement establishing the Utah Infrastructure Agency. Mrs. McCandless seconded the motion.
Those voting aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr. Seastrand, Mrs. Street, Mr.
Sumner, and Mayor Washburn. The motion passed unanimously.
Mrs. Black moved, by resolution, to authorize the Mayor to execute the Communications Service
Contract with the Utah Infrastructure Agency. Mr. Seastrand seconded the motion. Those voting aye:
Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr. Seastrand, Mrs. Street, Mr. Sumner, and Mayor
Washburn. The motion passed unanimously.
Laura Lewis, City’s Financial Advisor, stated that as many of the Council knows, the late Mr. Reams
spent many hours trying to make UTOPIA succeed. She had not seen the first draft of the model, and
called Mr. Reams to find out about it. She said she heard directly from him that he believed in this
model. Since then she has been able to go through the model, and she (who is also working with both
UIA and UTOPIA) believes this is a good turning point. She was involved with what went on in
Brigham City and was very pleased with the take rate there. She agrees this is not where they hoped
to be at this point, but this is the right way to go now.
ORDINANCE - Confirming the Assessment List and Levying Assessments Against Certain
Properties in the City of Orem, Utah Northgate Village Special Improvement District” (The
City Council Minutes – October 26, 2010 (p.17)
“Improvement District”) to Finance the Cost of Certain Water and Sewer Improvements, Curb,
Gutter, Sidewalk, Storm Drainage and Storm Water Retention Improvements, Street
Improvements, Telecommunication Infrastructure, Public Landscaping Improvements,
Demolition, Grading, and Site Work with Respect to the Public Improvements, and All Other
Miscellaneous Work Necessary to Complete Said Improvements in a Proper Workmanlike
Manner; (Collectively, the “Improvements”); Establishing a Reserve Fund; Providing for
Certain Remedies upon Default in the Payment of Assessments; Establishing an Effective Date
of this Ordinance; and Related Matters
RESOLUTION – Authorizing the Issuance and Providing for the Sale of $1,915,000 City of
Orem, Utah Special Assessment Bonds, Series 2010 (Northgate Village Special Improvement
District); Prescribing the Form of Series 2010 Bonds; Setting Forth the Maturity, the Interest
Rates and Denomination of Said Series 2010 Bonds; Establishing the Creation of a Reserve
Fund as Provided by Statute; and Related Matters
Steven Earl, Assistant City Attorney, presented a staff request that the City Council:
1. By ordinance, confirm the assessment list and levy assessments against certain properties in
the City of Orem, Utah Northgate Village Special Improvement District” (the
“Improvement District”) to finance the cost of certain water and sewer improvements, curb,
gutter, sidewalk, storm drainage and storm water retention improvements, street
improvements, telecommunication infrastructure, public landscaping improvements,
demolition, grading, and site work with respect to the public improvements, and all other
miscellaneous work necessary to complete said improvements in a proper workmanlike
manner; (collectively, the “improvements”); establishing a reserve fund; providing for
certain remedies upon default in the payment of assessments; establishing an effective date
of this ordinance; and related matters
2. By resolution, authorize the issuance and providing for the sale of $1,915,000 City of
Orem, Utah Special Assessment Bonds, Series 2010 (Northgate Village Special
Improvement District); prescribing the form of Series 2010 Bonds; setting forth the
maturity, the interest rates and denomination of said Series 2010 Bonds; establishing the
creation of a reserve fund as provided by statute; and related matters
On January 24, 2006, the City Council, by resolution, created the Northgate Village Special
Improvement District on property located within the Northgate Development at approximately
800 North 900 West. The City issued interim warrants to pay for the cost of certain infrastructure
improvements within the SID.
At the time of creation of the Northgate Village SID, it was anticipated that the owners/developers
would pay the City approximately $76,000 per acre as parcels in the development were sold. These
payments would be used to pay off the interim warrants issued by the City. Since the creation of the
Northgate Village SID, the owners/developers have sold all but 11.93 acres in the project. The
owners and developers of the Northgate development have repaid a total of $1,676,923.09, which
amount has been applied to the outstanding balance of the interim warrants.
For a number of reasons, the amount that has been repaid so far has been proportionately less per
acre than is required to pay off the warrants. There are two possible ways of correcting this
deficiency. The first is to attempt to collect additional amounts from the new owners of properties
City Council Minutes – October 26, 2010 (p.18)
that have already been sold. The second option is to levy a proportionately higher assessment on the
properties that are still owned by the original owners/developers. Because of the difficulties involved
with the first option, the original owners/developers and staff believe that the second option is the
best alternative.
The proposed assessment ordinance would levy an assessment of $140,731.86 per acre on the
11.93 acres in the SID that are still owned by the original owners/developers. The assessment
ordinance would require the owners of the 11.93 acres to make annual assessment payments every
year for 15 years with the first annual payment coming due on May 1, 2011. Whenever a parcel is
sold, the entire amount of the assessment attributable to that parcel must be paid at closing.
The City also needs to replace the interim warrants with long-term financing in the form of long-term
bonds. The interim warrants come due on November 1, 2010. The assessment bonds will be paid
from the collection of assessments levied against the 11.93 acres as described above.
Ms. Lewis advised that the intention for the Northgate SID was that the developers would pay off the
assessment before it ever went to long-term financing. However, the market turned, and that did not
happen. As property has sold, the assessments have been paid down. The payoff is approximately
$1,658,000 plus interest and the issuance cost for the bonds. Northgate is responsible for this
amount. The City’s obligation is to assess Northgate every year, collect the assessment, and pay the
bond holders. The City also has an obligation to foreclose on the property if that assessment is not
paid. The City has a lien that supersedes the first trust deeds lien that may exist on that property. The
City would be obligated to foreclose on the property if the assessment is not paid. She then explained
the foreclosure process options.
Mr. Seastrand asked if the bonds are structured to be paid off early. Ms. Lewis advised they are.
Mayor Washburn noted these are recorded liens, and Ms. Lewis agreed. She stated they will record a
special notice of interest that will lay out what the assessment is.
Mrs. McCandless moved, by ordinance, to levy an assessment against certain properties located
within the Northgate Village Special Improvement District (SID). Mrs. Black seconded the motion.
Those voting aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr. Seastrand, Mrs. Street, Mr.
Sumner, and Mayor Washburn. The motion passed unanimously.
Mrs. McCandless moved, by resolution, to authorize the issuance of long-term bonds which will be
used to retire outstanding interim warrants that were used to finance the construction of infrastructure
improvements within the Northgate Village SID. Mr. Hernandez seconded the motion. Those voting
aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr. Seastrand, Mrs. Street, Mr. Sumner, and
Mayor Washburn. The motion passed unanimously.
RESOLUTION – Directing Staff to Proceed with the Architectural Design Phase, Fund
Raising, and Bidding and Construction for the Facility Referred to as “The Center for Story and
Art” When Sufficient Funding is in Place
City Council Minutes – October 26, 2010 (p.19)
Louise Wallace, Library Director, presented a staff recommendation that the City Council, by
resolution, direct staff to proceed to the architectural design phase for the facility referred to as “The
Center for Story and Art,” to begin capital fund raising as needed, and to proceed with bidding and
construction when sufficient funding is in place.
On May 25, 2010, in a public hearing regarding the Cultural Arts and Recreation Enrichment
(CARE) granting program, the City Council reserved $300,000 for the facility project referred to as
“The Center for Story and Art” subject to approval of the plans. Since that time, staff has worked
with an architect and construction cost estimators to confirm the projected cost in today’s building
market. Staff is now prepared, at the City Council’s direction, to accept proposals for architectural
services and to proceed to the design phase for the project. Staff and the Friends of the Library are
also prepared to move forward with a capital fund raising campaign.
The following summarizes the conceptual plans for this proposed facility:
Purpose: This facility will provide additional capacity for storytelling events, which are currently
offered year round by the Library in partnership with Timpanogos Storytelling Institute.
Programming will include weeklong artist in residencies; youth, adult, and educator storycrafting and
storytelling workshops; and public performances by the best regional and national tellers.
Timpanogos Storytelling Institute is poised to take a major step forward with this facility in making
Orem the Center for Story in the nation.
This facility will also provide additional capacity for the full range of cultural programs offered year
round by the Library, including lecture/presentations, musical performance, dramatic presentation,
dance, reader's theater, film screenings and discussions, puppetry, poetry and prose readings, writer’s
workshops, and exhibits.
Amenities: The facility will include an auditorium with a minimum of 385 fixed seats plus space to
accommodate an additional 115 folding chairs. The auditorium will have both main floor and
balcony seating, with the balcony representing approximately 19% of the total. The balcony will be
designed to go dark for smaller audience programs. This configuration is intended to accommodate a
wide variety of program types and audience sizes. The seating layout will place the audience in a
180° arc and will include inside aisles for ease of access. Seating will be raked to maximize
sightlines.
The 50’ x 34’ proscenium stage will have a detachable apron that adds a minimum of 11’ at the
widest point, plus a portable platform (a thrust stage) which extends into the audience on three sides
to provide greater intimacy between audience and presenter. This configuration of seating to stage
provides the maximum flexibility for multiple types of programs and presentations.
Acoustics will be designed to serve a variety of program types, functioning for clarity of speech as
well as musical performance. The auditorium will include a rear projection control room.
The facility will include two meeting rooms which seat sixty each. A moveable sound barrier
partition between the two will open up to seat 120 in a workshop setting.
City Council Minutes – October 26, 2010 (p.20)
The lobby will be sufficiently sized to provide for safe and comfortable entry and egress of a full
auditorium, as well as the simultaneous use of the meeting rooms. The lobby will also host exhibits
relating to story and touring exhibits available to libraries.
Cost: The 23,027 square foot facility is estimated at $4,375,130.
Location: The facility will be situated immediately adjacent to the Library, which holds the largest
public library storytelling resource collection in the nation.
Funding: $1.5 million has been pledged by a private donor and the Friends of the Library, and a
$100,000 grant from the U.S. Department of Education has already been received for FF&E. In
previous deliberations regarding this facility proposal, the City Council has reserved to date a total of
$725,000 of CARE funds in a facilities bucket. Staff recommends reserving an additional
$1,200,000 of CARE funds over the course of the next four years towards this project. Staff and the
Friends of the Library anticipate raising funds for the remaining balance.
Timeline: The total project, from preparation of the prequalification package to occupancy, is
expected to take approximately two years, with actual construction estimated at eleven months.
This facility is not intended to be “the” performing arts facility in Orem. It is intended to fill a niche.
It was designed for future growth. As they worked with an architect they do have a concept plan and
would design it with that in mind.
Mrs. Black asked who will own and operate the facility. Mrs. Wallace said Orem City will do both.
Mrs. Black then questioned how the Timpanogos Storytelling Institute and the Library are related.
Mrs. Wallace explained they operate as partners with events year round. She noted Timpanogos
Storytelling also donates a sizable amount of money to the Library collection, which is the largest
public library collection. Timpanogos brings on an army of volunteers to present these programs, and
they give a great deal of time to it. She said she is very grateful for everything they do. The City has
also received a pledge of $1million from the Ashton family and $500,000 from the Friends of the
Library.
Mr. Sumner thanked Mrs. Wallace for all the work she has done. He stated he is a regular participant
in the Timpanogos Storytelling Festival. He asked whether any of the baseball diamonds would be
removed for this facility. Mrs. Wallace said they would not. The proposed facility will be adjacent to
the Library, which brings it closer as a storytelling resource and the rest of the Library’s resources.
Mr. Sumner then asked if additional funding would be raised from donations. Mrs. Wallace replied it
would. They need an additional $850,000.
Mr. Sumner asked where the $82,000 cost to run the facility would come from.
Mrs. Wallace indicated that amount was related to a larger auditorium being considered. This facility
would be approximately $40,000 per year. The other component was for custodial, which the City
City Council Minutes – October 26, 2010 (p.21)
has absorbed with existing staff. They also use volunteers to help with custodial services. The actual
cost from the General Fund would be $40,000, and they have come up with ideas for managing that.
Mr. Sumner noted he sometimes gets nervous about government sponsoring events or activities that
are done in the private sector. He asked whether any of the programs the Library does are duplicated
by other organizations. Mrs. Wallace explained the Library is all about the expansion of thought. The
Media Department is not a Blockbuster clone. The Children’s Library is not decorated with Disney
primary colors. The Library collection is also unique. They do not buy 300 copies of the latest best
seller. They go for breadth and depth of what is available, and they strive for the originality of
thought. What they want to do is add to the cultural arts in the community. Tonight there was a
program presented in the Library about African American women in Jazz. The Library is not
interested in repeating what other organization do. She added that she believes what happens in this
facility would help the entire arts community by invigorating a desire to engage in the arts.
Mrs. Street inquired whether admission will be charged for events. Mrs. Wallace indicated it is
important for them to provide free programs to the public. There are only a few times over the last
ten to fifteen years that the Library has charged any admission fee. The goal of the library is to
democratize knowledge to make it equally accessible to everyone.
Mrs. Street asked whether there is a fee charged when the Library sponsors a Timpanogos
Storytelling event. Mrs. Wallace indicated Timpanogos Storytelling is bringing Donald Davis to
perform in the Library next week, and that is a free event. There could be a charge for a workshop,
but they anticipate that there will be many free events as well. Timpanogos Storytelling is self
sustaining in that regard.
Mrs. Street advised that there have been a lot of discussions about programming. She wondered what
ratio of time would be available for public performances.
Mrs. McCandless said she had also wondered if there would be time available for the public to hold
recitals or similar events.
Mrs. Wallace advised that the programming already provided at the Library is very robust. They
provide about 800 programs per year, which includes Timpanogos Storytelling events. There would
be space available if the Council wanted to establish a fee schedule for those kinds of uses or they
could choose not to do that. There is definitely a need for that type of venue for the arts
organizations. This summer a woman came and asked if her group could come and rehearse at the
Library. The program they wanted to rehearse was called 100 Cellos. As the woman was talking
about her need, Mrs. Wallace thought about it and suggested that the public be allowed to listen to
the rehearsal and perhaps ask questions. This organization does rehearse at the Library, and one day a
preschool group came to watch and asked questions. The children were also allowed to come up and
strike the bow across the cello. It was a win-win situation for everyone, and Mrs. Wallace had made
it a part of her programming.
Mrs. Street asked who will determine the programming for the Timpanogos Storytelling Festival.
City Council Minutes – October 26, 2010 (p.22)
Mrs. Wallace explained that Timpanogos Storytelling has a governing board, and they decide who
will perform. Library staff is invited to those meetings, and they do have a voice.
Mrs. Street stated she has had a conversation with Mrs. Wallace and Mr. Chesnut about public access
to publicly owned spaces. She asked Mrs. Wallace to explain the access philosophy of the Library
and hence The Center for Story in terms of content control. Mrs. Wallace said she considers the
Library space to be a limited public forum that is used for the Library programs. It is not the same as
an open public forum, such as a sidewalk, where people can say anything they want. The Library can
choose which programs they present, and they are very selective in terms of the quality of the
programs. They do endorse the principles of intellectual freedom, and the Library is all about the
expansion of thought.
Mrs. Street wondered about what other kinds of programming, other than cultural arts, would be
permissible in the auditorium and who would set the policy for the programming.
Mrs. Wallace replied that it is a Library policy, and they take the policy to the Library Advisory
Commission for their review. The members of that commission are appointed by the City Council.
The programs that take place in the new facility will be the kind of programs that take place now but
with a greater capacity. She cited a number of recent programs held at the library. She said history is
a type of cultural art, and they recently had a series on World War II veterans.
Mr. Hernandez asked how many times the City has been challenged about a performance held at the
Library. Mrs. Wallace said that to her knowledge they have never been challenged.
Mr. Hernandez said this indicates that the community is supportive of the programs provided at the
Library. They are not likely to face a challenge in the future because of the policy that is already in
place.
Mr. Seastrand noted that part of the challenge has been the overlapping of programming. Most other
organizations charge fees. He asked how Mrs. Wallace would handle a situation where a performing
arts group wanted to perform at the Library as a free alternative.
Mrs. Wallace explained that protections are built in. The Utah Lyric Opera Society is performing
some remarkable programs in the Library space. In order to survive, they need to have ticketed
venues. They use the Library to build an audience base for their ticketed events. They do it pro bono
at the Library because it is a help to them. SCERA’s Youth Theater, Acting Up, calls to schedule a
time to build an audience base and have opportunities to hone their skills. They also perform at the
Provo and Sandy libraries. She sees what the Library does as a partnership in building the arts for the
entire community.
Mr. Seastrand asked if those relationships can be fostered in a way that is more collaborative and less
competitive.
Mrs. Wallace said they are not producing the 800 programs each year with existing staff. Most of the
programs they provide are partnerships with other organizations. They wish only for feelings of
City Council Minutes – October 26, 2010 (p.23)
camaraderie. It has been a difficult couple of years in that regard, and she hopes for healing and
moving forward.
Mrs. Black read the following statement she had prepared:
“After carefully considering the Center for Story proposal for the last four years, I fully support
the resolution that is being brought forward tonight. The resolution provides the necessary
parameters of designating the plan, commissioning the architectural design, outlining the
funding, and going forward with bidding and construction when funding is in place.
I am supportive of the proposed plan, for an auditorium adjacent to the Library that will seat
290 on the main floor, 95 in the balcony (which can go dark if not needed) and space to add an
additional 115 folding chairs if they are needed. It will provide an excellent mix of adapting to
both smaller and larger audiences. The design and portability of the stage also adapts itself well
to both storytelling and other presentations. The two sixty-seat classrooms which can be opened
to provide a workshop setting for 120 will provide many opportunities to meet the cultural arts
needs of the community.
The architectural adage of “form follows function” applies very well to this auditorium and
classrooms. It is not intended as a full-fledged performing arts venue – there is no orchestra pit
or fly system. It is intended to meet the community’s growing need for cultural arts, much of
which is currently presented in the storytelling wing of the library -- including storytelling
performances and workshops; performances by volunteer cultural arts groups that perform for
free; free outreach performances sponsored by other performance organizations such as
SCERA, Hale and the Orem Arts Council; and a myriad of educational programs and
workshops – all of which are obtained and funded by grants and volunteer donation. This
facility provides a free door to the arts and culture that many people would otherwise not be
able to enter. It has a unique niche and purpose and is intended to complement, not compete,
with other cultural arts venues. As an incidental use, it could also be used for other appropriate
city and community meetings. It will be owned by the city and administered by the library staff.
The City’s only funding contribution to the building of the Center for Story will be through the
public physical facilities portion of the CARE tax. All other funding will come from donations
or other grants, much of which has already been committed. The facility will be constructed
when funding is in place.
What a blessing this is for our city! I want to express a heartfelt thank you to all those who have
stepped up with generous enthusiasm to support this facility and the good that will occur from
its construction.”
Mr. Hernandez indicated he has been so moved by the work and the passion that people have put into
this. He thanked Mrs. Wallace for the work she has done. She is a great example of what a public
servant ought to be like. Those who are donating to this facility provide a wonderful example of how
the community can come together and bless the entire community. As a child, the library was a place
he could go to feel comfortable and reach his goals because his family was poor and could not afford
to pay. He stated he believes this auditorium will do that for this community. Especially for those
who are at a socioeconomic status where this is the only place they could attend such performance or
City Council Minutes – October 26, 2010 (p.24)
to perform in them. He said he is overwhelmed by the amount of work that has been put into the
planning of this project.
Mrs. Street expressed appreciation to the Councilmembers who take their jobs so seriously. She
thanked City staff for helping her understand. She believes Orem has a great public library, and it is
something that they should be proud of. She thanked Timpanogos Storytelling for their inspiration in
starting the festival as a way to raise funds for a children’s wing of the Library. The problem comes
when there are competing interests or the perception of competing interests. She said she is not sure
if that is actually a problem, and it may be a healthier way to address problems. The ability to come
together and discuss difficult issues is a good thing. Mrs. Street stated she thought the issue of the
Center for Story was a very complex debate when she first came on the Council. She reviewed the
various points of view relating to the facility. Mrs. Street said she has found herself persuaded back
and forth as she has sought answers. She had concerns about creating space just for the Timpanogos
Storytelling Festival. In April, the focus for the facility was narrowed for her, and she envisioned it
as a library auditorium rather than a civic center. At that moment she believed there was a need for a
library auditorium. There has been an evolution in her understanding of Timpanogos Storytelling,
which has become an institute and has set in place a foundation to provide ongoing funding. The
Council members also discussed at their recent retreat the relationship between the Timpanogos
Storytelling Festival and the City of Orem. They can no longer continue to function as they have in
the past. It is in Timpanogos Storytelling’s best interest to have that relationship clearly defined and
understood. It is her understanding that the Library will maintain control over the storytelling
programming at the Library, and the Timpanogos Storytelling Festival will utilize staff and
volunteers to put the performances on together. The proposed facility will have approximately
23,000 square feet that will seat up to 500 people. It will have dressing rooms, a green room, and a
couple of classrooms that will seat up to 60 people and will have moveable walls. The facility will be
set up to house the programming that is already going on in the Library. The proposed facility is
Phase I with the hope that it can be expanded to another 11,000 square feet in Phase II to provide
some administrative offices and a black box theater for audio recordings of personal histories or
stories. The hope is that it will grow. Tonight, the City Council is being asked to approve spending
CARE Tax funds to pay for architectural drawings and to make the commitment for this project to
move forward. Mrs. Street stated that while she feels great progress has been made in defining the
Center for Story, she had not reached her comfort level, until tonight. She recognized the need for
additional space for the Orem Public Library; however, she wondered if they had considered the
needs of the community at large and questioned what role the Library plays in the community beyond
being a venue for storytelling and cultural arts performances. Libraries in this evolving world can
have a focus on arts, they can have a focus on history, and they can have a focus on community
building where they bring people together to obtain knowledge that is not attainable elsewhere. The
SCERA, because of its private nonprofit status, has the ability to limit the programming it provides
to the community to be family friendly. If the Orem Public Library expands, it is her hope that they
look beyond the needs of the performing arts community and look at the broader need to see what
they should be doing that they are not already doing. She expressed her belief that this is an
opportunity to fill gaps and build bridges. She feels this way because she wants to see that they are
truly taking stock of where they are and what the role of the library is in the broader community. She
cautioned the Council and staff against going into this already having defined what they will and will
not do. She suggested postponing this item until they have a broader discussion of the role of the
library. She stated this does not mean that she does not want a Center for Story or an expansion of
City Council Minutes – October 26, 2010 (p.25)
the library because she does. It does not mean that she does not want a 500-seat auditorium because
perhaps she does. She just wants an answer to what else the community wants.
Mayor Washburn invited comments from the audience.
Stella Welsh, former Mayor, said she has always supported the Library, Timpanogos Storytelling,
and the SCERA. The Center for Story is a new concept and is one that she is very excited about.
However, the City needs to delineate exactly who does what and where in the Timpanogos
Storytelling Festival and the Library. It is not a problem right now, but it could be in the future. She
said it would protect the Ashtons and others who chose to donate funds, as well as the City.
Holly Robbins, resident, expressed concern with the connection between the Timpanogos
Storytelling Institute and the Library expansion. She wondered if a fee should be placed on any
organization that requires a fee from the participants. This way, no organization will benefit over
another. She questioned whether Orem is going to justify showing preference for the Timpanogos
Storytelling Festival over other cultural arts programs.
Shiree Thurston, former Councilmember, indicated there is a unique relationship between
Timpanogos Storytelling Festival and the Library. She has seen Library programs where there is not
enough room for everyone who wishes to attend the event. It is important to provide free programs
for people who cannot afford to pay. She stated that to separate the Timpanogos Storytelling Festival
from the Library would be difficult. She thinks the Center for Story is an important thing to do, and
she fully supports it and the great people who have dedicated so much to the City. Mrs. Thurston
then thanked Mrs. Wallace for all of her efforts.
Andy Davis, resident, noted she does not serve on any board and she has not participated in anything
that has to do with this proposal. She stated that Orem is wonderful, and the example Karen Ashton
has set for her in giving to the community is incredible. Mrs. Ashton does not know her, but Ms.
Davis would love to follow Mrs. Ashton’s example of having a wonderful vision and trust. Mrs.
Ashton has given so much to the City, and she is the type of person to invest in.
Sharon Scanlon, Cherryhill Neighborhood co-chair, said she is the storyteller for her family. Many
years ago she was in a library and read a poem in a magazine. The title of the poem was “The Man
Who Invented the Plastic Rose is Dead.” One of the reasons she loves Orem is because they are
teaching the next generation be not be artificial. One way they do this is through the Timpanogos
Storytelling Festival. It is important to teach people their history so they are not doomed to repeat it.
Roger Scanlon, Cherryhill Neighborhood co-chair, indicated he was a librarian before he retired. The
concerns raised about the proposed facility are valid, but he also believes there are answers that can
be found and agreed upon. He stated when that happens the City of Orem will have a facility that
will be a nationally recognized center for the arts in this particular venue. He said the Council should
take extra time if necessary, but the answers are there to be found.
Deborah Escalante, Orem Arts Councilmember, said she is a patron of the Library and the
Timpanogos Storytelling Festival. She thanked Mrs. Wallace and the City Council for all the work
and study that has been put into this and for taking the necessary steps to move ahead. When she
City Council Minutes – October 26, 2010 (p.26)
considers that the programs provided at the library are “standing room only”, the need for the
auditorium is critical. She expressed her hope that, although there may be questions that still need to
be answered, it will not stall the process of moving forward.
Karen Ashton, Timpanogos Storytelling, advised that everyone knows this is not about personality or
a person. This is about the community. There is a need for the library, and the storytelling
community simply offered to be the vehicle to bring this forward. They have done all they can do
including giving what they have. The question is whether to move forward to fill the need that
already exists. She expressed her hope that the City Council will see the need and go forward.
Mrs. McCandless thanked everyone for their comments. She said it has taken her a while to get to
where she is on this issue. It has been four years. She has struggled with it, but a few months ago she
finally found peace. She mentioned that the step they are at right now is a good catalyst to define the
relationship more formally between Timpanogos Storytelling, the Library, and the City. This would
be good for everyone involved. They have recently worked out a similar issue with the Alpine
School District in putting what has been agreed upon into a contract. She believes Orem needs this
facility regardless of Timpanogos Storytelling. Orem’s Library is a place of refuge. She sees this
auditorium as an extension of what the community sees the Library being. She noted she wants all
the arts programs to succeed. She cannot guarantee this will not impact other arts organizations, but
she hopes it will be a catalyst. The intent of this facility is not to harm anyone. This has been a
politically charged issue, and she hopes it will not be anymore. She values the opinions of people on
all sides of the issue. She hopes they can agree to disagree and to have Orem, Utah, be one of the
most wonderful arts communities in the nation.
Mrs. Black remarked that the Library will schedule events for this facility. Timpanogos Storytelling
and Friends of the Library are donating $1.5 million towards the construction of this project. If it was
deemed necessary, a donation agreement could be made that would guarantee a certain number of
dates for use by the Timpanogos Storytelling. Mrs. Black stated that she spoke with the City
Attorney who said all questions could be handled by agreement. Mrs. Black said the City Council
should move forward on this.
Mr. Sumner indicated he doubts anyone is against this facility. He just does not think the community
really understands what is going on with the Center for Story. He a level playing field, and he is not
sure that will happen with the scheduling of events. He has no doubt that there will be competition.
He would like questions answered before moving forward, and he does not mind waiting for those
answers.
Mayor Washburn advised that what has been said that evening has been helpful in obtaining
perspective. Everyone has expressed support for Timpanogos Storytelling, the Library, Hale Center
Theater, SCERA and others. The City is not trying to make any disadvantage for the other
organizations. As he considered the brick and mortar, he asked whether the building of a facility
would limit this Council or future Councils. One thing they do know is that whatever they negotiate
should not bind a future City Council. If the Council decides not to build a facility until everything is
in place, it could affect a future Council. When they built the Library, they did not say that a
particular area of the Library is forever dedicated to audio visual or this particular space is forever
dedicated to the Children’s Library. The City can change its mind and not even use it as a library.
City Council Minutes – October 26, 2010 (p.27)
Uses change. Mayor Washburn stated he does not want the Library to provide competitive programs
that will hurt other valuable organizations. As he looks at the programming that is being provided
right now, he has not seen any other takers for it. There is no one calling foul that the Library took
programming and offered it free when someone else wanted to charge for it. The City cannot plan for
every eventuality, but they can build facilities that have multiuse capabilities. He stated he will not
craft an agreement that will limit future Councils. Tonight they are looking at building brick and
mortar. The use is an ever-evolving process. They have an opportunity that would be a gift to this
community, most of which would be done with private donations. He stated the newspapers love to
put a spin on the use of tax dollars. If the City cannot raise the private dollars, they will not build the
facility. They will not be using any money from the General Funds to build this facility.
Mrs. Street questioned whether the expansion of the Library can have a use that is not cultural arts
related in the future if they are using CARE Tax funds to pay for part of it. She also wondered
whether there would need to be deed restrictions for park lands. Through the research she has been
doing, she read in the Utah Code about how libraries have alternate ways to fund the building of new
libraries. She asked if there should be discussions about alternate funding sources.
Mayor Washburn stated the other alternatives are raising property taxes.
Mrs. Street asked whether there is a need to discuss it, even if it is just to decide what is not wanted
to be done.
Mrs. Black declared that she would not want to raise any taxes.
Mayor Washburn indicated that if they wait until all of the questions are answered, it is an indefinite
wait.
Mr. Hernandez remarked that there is a multitude of ways to fund services. The question of funding
is quite clear that CARE Taxes can be used for this facility. Mrs. Street’s questions do not preclude
making a decision tonight.
Mr. Seastrand expressed appreciation for the discussion and the comments from the residents. It
seems to him that as this has been discussed over the last four years, there has always been an
assumption that it is one way or another. As he has tried to approach the overall perspective of the
CARE Tax, there was no specific purpose defined. The role the City Council has is to figure out how
to utilize the funds to benefit the most organizations as well as the residents of Orem by providing
cultural arts opportunities, education, and recreation options. There have been several groups that the
City has worked very hard to help in a specific way. They have looked at program funding for a
number of organizations, including the SCERA and the Hale Center Theater. They have tried to fund
a multitude of organizations that are just trying to get started. They have tried to find solutions for the
storytelling organizations that are also valuable organizations to the city. There are more problems to
solve that need to be looked at. The Center for Story is a very good solution whose time has come. It
is time to make a decision and move on. He said he has not given up on the concept of an arts district
located around the SCERA. He would also love to find a new home for the Hale Center Theater. He
would prefer to be perceived as a Council that is trying to find effective and viable long-term
solutions. He also approaches this from an emotional standpoint. He swam in the SCERA pool when
City Council Minutes – October 26, 2010 (p.28)
he was young, and his father helped raise the money for it. He wants to see SCERA succeed. He has
been impressed with how the SCERA Board has tried to restructure the organization. He does not
want to minimize those efforts, and going forward with this proposal does not do that. There are still
some questions as to the purpose of the facility, but those questions can be tweaked as they go
forward. Making a decision this evening will allow them to move forward and help the other
organizations. He said he is hopeful that in the process of finding solutions, the residents can say this
has been good use of taxpayer funds. He would like to continue the CARE Tax in order to continue
to benefit all of the organizations. He thinks the residents and other organizations will rally behind it.
Mrs. Black echoed what Mr. Seastrand said and reaffirmed that she is willing to “work like a dog” to
advance cultural arts in Orem, including the area around SCERA.
Mr. Hernandez moved, by resolution, to direct staff to proceed to the architectural design phase for
the facility referred to as “The Center for Story and Art,” to begin capital fund raising as needed, and
to proceed with bidding and construction when sufficient funding is in place and as outlined in the
staff report. Mrs. Black seconded the motion. Those voting aye: Mr. Hernandez, Mr. Seastrand, Mrs.
McCandless, Mayor Washburn, and Mrs. Black. Those voting nay: Mrs. Street and Mr. Sumner. The
motion carried with a majority vote of 5 to 2.
Mrs. Street and Mr. Sumner noted their nay vote was based on a desire to have further discussions to
answer questions they have concerning the facility.
COMMUNICATION ITEMS
There were no communication items.
ADJOURNMENT
Mrs. McCandless moved to adjourn to a closed door meeting to discuss property acquisition
pursuant to Section 52-4-205(1)(d)(ii) respectively of the Utah State Code Annotated. Mrs. Street
seconded the motion. Those voting aye: Mrs. Black, Mr. Hernandez, Mrs. McCandless, Mr.
Seastrand, Mrs. Street, Mr. Sumner, and Mayor Washburn. The motion passed unanimously.
CLOSED-DOOR SESSION – Property Acquisition
A closed-door session was held at 10:40 p.m. to discuss property acquisition pursuant to Section 524-205(1)(d)(ii) of the Utah Code Annotated. Those in attendance were Mayor Jerry C. Washburn;
Councilmembers Margaret Black, Carl Hernandez III, Karen McCandless, Mark Seastrand, Mary
Street, and Brent Sumner; staff members Bruce Chesnut, Greg Stephens, Steven Earl, Scott Brown,
legal counsel, and Donna Weaver.
The meeting adjourned at 11:36 p.m.
City Council Minutes – October 26, 2010 (p.29)
Donna Weaver, City Recorder
Approved: November 9, 2010
City Council Minutes – October 26, 2010 (p.30)