With all the tax protesting going on lately, cities are more hesitant than ever to raise taxes. But if Orem wants to keep pace with the city's needs, it may have to raise taxes soon.
Public Works Director Jack Jones says Orem is lagging behind on capital improvements because the city spends most of its allotted money on maintaining the infrastructures already in place. He said that if the city does not start moving forward on some of the city's capital project needs, the projects will become increasingly expensive and even more burdensome to residents in the future."The city's needs are not being met if the projects are continually delayed and it's that simple," Jones said. "They can stall and put them off, but if they do, the needs are going to grow and the costs will increase."
Jones said the city has a 10-year master plan for streets, water and sewer projects and only about 25 percent of those projects have been completed during the first five years. He estimates that capital projects increase in cost about 4 percent every year.
"We just get further behind and then the costs increase, about 4 percent for each project," he said.
Some of the major projects that Jones said need to be addressed are the Lakeside Park sports complex, the storm drain water system, improvements on Orem Boulevard and several sewer projects. He said there is a priority of projects, some of which can be done in phases to reduce immediate costs. In all, the city has more than $30 million in capital project needs.
The City Council is considering ways to fund some of the city's priority capital project needs in its 1990-91 budget. Some of the council's alternatives are to raise water and sewer fees, put the issue out for bond and increase property taxes and the city's franchise tax or do nothing and wait another year.
Orem has the lowest combined average of water and sewer rates in the county and they have not been raised for more than five years. By raising rates 20 percent, the city could generate about $1 million annually, which Jones said is enough to finish the priority sewer and water projects in about 10 years.
If the city bonded to pay for other priority capital projects, the city would have to raise property taxes or the franchise tax - or both. So far the council has appeared hesitant to do either.
Mayor Blaine Willes said he does not believe the people of Orem would support a tax increase but said he is concerned about getting behind in services.
"For all we know the good folks out there are happy with the way it is and if you put it on a bond issue they won't support it," Willes said. "It comes down to a matter of if the people are satisfied with the way things are or if they want improvements and are willing to pay for them."
A $3 million bond paid back over 10 years would mean about a 3.2 percent increase in property tax, a $5 million bond would mean a 5.3 percent increase and an $8 million bond would mean an 8.5 percent increase. A 1 percent franchise tax increase would generate enough money to fund about $4 million in bonding and a 2 percent increase about $8 million.
Jones said rather than bond for several of the projects at once, the city would save money if it took one project at a time and followed a "pay-as-you-go" philosophy.
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Projects
Orem's major
capital projects Costs*
(in millions)
Water projects $6
Sewer projects $4.2
Street projects $15
Storm drain system $4
Lakeside Park
sports facility $2
*estimated