Orem council hears options for a property tax increase, a new road utility fee of about $4.32 a month and $65 million sewer bond plan

Decisions at a glance

Agenda, item by item

1. Budget

   General Fund sustainability plan

   Discussed

   Consultants Laura Lewis and Fred Philpot said Utah's certified tax rate system keeps property tax revenue flat as values rise, so Orem's rate has fallen since 2016 and its share of the total property tax levy dropped from 17% in 2005 to 9% in 2025. Property tax is about 17% of the budget and sales tax nearly half; sales tax growth has been flat for three years. The baseline model starts with a $25 million unrestricted fund balance, which would be depleted with a negative cash position by 2030 absent action, even if all new service requests are denied; departmental requests could add $6 million a year by 2032. Philpot called the property tax rate the most direct lever, alongside revenue evaluations and bonding for one-time costs. Council Member Millett asked the state to reward revitalization in built-out cities. Members asked for more time to review departmental requests.

   • Budget$25.0 million Starting unrestricted General Fund balance in model. Paid from General Fund

2. Budget

   FY 2026-2027 budget: revenues, rates and compensation

   Discussed

   Finance Director Brandon Nelson described a new Public Safety Special Revenue Fund that would hold police and fire revenue, including 100% of operational property tax, with the county tax line renamed 'City of Orem Public Safety.' With no tax increase, property tax revenue would rise about $32,000 (0.5%); a 7% increase would raise about $450,000, about $1.25 a month or $15 a year for the average household, and requires a property tax impact statement (for example, two new police officers). Without an increase the tentative budget would pass May 12 and final adoption June 9; with an increase a Truth in Taxation hearing would be held in August. Proposed rates: water base rate up 5.5%; sewer rates to fund a $65 million bond expected in late 2026; storm water, solid waste, street lighting and most recreation fees up. On pay, HR said personnel is about 65% of the budget, the city uses twice-yearly market surveys with targeted adjustments (non-sworn about 1%, sworn police about 10% last year) plus a 3% merit or step increase, and a new employee health center will open.

   • Bond$65.0 million Wastewater treatment facility upgrade per 2023 master plan, anticipated late 2026. Paid from Sewer rates
   • Fee$450,000 Additional revenue from a 7% property tax increase (illustrative). Paid from Property tax

3. Taxes and fees

   Transportation Utility Fee

   Discussed

   Public Works Director Chris Tschirki said road maintenance has a $4 million annual funding gap and that 75% of local streets are 20 to 25 years old. Following a Utah Supreme Court ruling and House Bill 425, the city, with consultant Parametrics, found 35% of road trips are residential and 65% non-residential. A fee of about $4.32 a month for single-family homes and $2 to $142 a month for commercial properties, based on trip intensity, would raise about $4 million; peers charge more (Highland $18.50, Pleasant Grove proposed $13.86). It would be adopted by ordinance after a public hearing, not through Truth in Taxation. The council asked for updated 'State of the Streets' data.

   • ContractAmount not given to Parametrics Transportation utility fee study
   • Fee$4.00 million Annual revenue target for road maintenance. Paid from Proposed transportation utility fee

4. Budget

   CARE tax award recommendations

   Discussed

   The CARE commission proposed awards from about $143,000 available for mini and mid-major grants against $333,000 in requests, boosted by unclaimed past awards. Proposed awards include $1,071,000 for SCERA (35% of qualifying prior-year operating expenses, up about $120,000), $25,000 for Utah Metropolitan Ballet and $1,000 for 'Better Together,' plus recreation items such as a Lakeside Park playground, a pump track, Bonneville Park sports courts and $50,000 for youth sports field improvements. The proposal returns to the council April 28 as an ordinance.

   • Grant$1.07 million to SCERA CARE tax arts award, proposed. Formula: 35% of qualifying prior-year operating expenses. Paid from CARE tax
   • Grant$25,000 to Utah Metropolitan Ballet CARE major grant, proposed. Paid from CARE tax
   • Grant$1,000 to Better Together CARE grant, proposed exception. Paid from CARE tax

What residents said

Property tax increaseRoad maintenance fundingGeneral Fund reserve depletion