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Orem City Council approves resolution opposing Alpine School District bond

By Genelle Pugmire - | Sep 28, 2022

Isaac Hale, Daily Herald file photo

A banner hangs outside of Hillcrest Elementary School before an open house held Thursday, March 14, 2019, in Orem.

In a last minute decision, the Orem City Council amended their agenda for Tuesday’s meeting, adding a resolution opposing the proposed Alpine School District general obligation bond for $595 million.

General public watching the council were shut off the meeting during the open mic and resolution discussions. As for a reason why, legal counsel said the council was discussing a political issue.

Officials in favor of the resolution include Mayor Dave Young and Council members LaNae Millett, Terry Peterson and Dave Spencer. Opposed were Tom Macdonald, Debby Lauret and Jeff Lambson.

The ASD bond has been the center of attention for residents in Orem as they contemplate the possibilities of an Orem City School District and the effects a bond will have on the city.

On Monday, the Utah Taxpayers Association elected to take a “neutral” position on the proposed issuance of $595 million in debt by the ASD.

“This will be the largest issuance of school district bond debt ever in Utah. While the amount of the proposal is staggering, at $595 million, Alpine is unique in that it is the largest school district in Utah and is experiencing rapid growth at the same time. The size of the district combined with the many needs for new construction in the hyper growth areas as well as renovation needs for older buildings in the more established areas of the district combines for a large amount of taxpayer dollars needed to meet the needs of the district,” reads the association’s statement.

The taxpayer association continued that ASD’s staggering of the debt over several years “provides some protection for taxpayers that should result in less impact to the overall tax burden. ”

It noted the impending vote on the proposed split of Orem into a new district, saying that will not affect the bond issue. If the district is split, corresponding projects within the new district and the dollar amount of those projects will be pulled out of the $595 million total and be voted on and implemented by the new governing body.

According to David Stephenson, executive director of external communications at ASD, bonds issued by the district consistently roll one into the next.

“The plan of finance, required by law, issues a portion of the bonds (if passed) once per year over four years. At the same time, Alpine is paying off a significant portion of previous bonds, nearly $150 million for the same time period. Most school districts in the State of Utah and elsewhere issue their approved General Obligation bonds over a series of 1-5 years. The reason for this is that the proceeds of the bonds take time to spend (i.e. cannot all be spent at once),” Stephenson said.

By spreading out the bond series, Alpine pays off significant principal in outstanding bonds each year. Thus, the new series are able to be “folded/layered in” with the payoff of principal each year.

Population growth estimates indicate that Orem City’s proportionate share of Alpine School District bonds is most likely to decrease over time as the surrounding areas continue to grow in households (i.e. more households leads to more taxpayers supporting the debt payments). Further, if the taxable value in surrounding areas grows at a faster pace than in Orem, the city’s decrease in its proportionate share of the debt is further compounded.

Over the past two decades he’s worked with the district, according to business administrator Rob Smith, a bond has never failed.

“We like going for a bond for two reasons; One, It gets the community involved and engaged. Orem has always been supportive. Two, it is the lowest cost financing for taxable projects,” Smith said.

There are approximately 13,000 school districts in the nation and Smith touted ASD’s status as one of 14 with a AAA bond rating.

Many Orem residents have been concerned about seismic issue in city schools — that issues have not been taken care of — and received an information card in mailboxes from those in favor of the new district with what Smith considers erroneous information.

From the Reaveley Report of 2006 on seismic issues, ASD has done the following: completed rebuilds of Orem High, Cherry Hill Elementary, Scera Park Elementary, Cascade Elementary. Facilities that have moved include East Shore/Summit, Hillcrest Elementary and Geneva Elementary.

Partial upgrades and renovations have been made to Sharon Elementary, Orem Junior High and Windsor Elementary.

Of the three schools left, visits and inspections have been made and Smith said there are some things being cared for, but the buildings are safe for now.

Seismic issues are not the only concerns that appear to have some Orem residents in commotion and leaving Principal John Shelton having to defend his school.

In a post on the Save Orem Schools Facebook page, Millet commented on Saturday about the bond and the seismic issues.

“… Orem kids are receiving far less than they should be. Unbelievable that of the Geneva, Orem Jr, Sharon, Windsor urgent rebuilds, not one are on the first phase of the bond — or any phase. An Orem District will rebuild those schools — look at what Canyons was able to do in 11 years!!!” Millet wrote. “Parkside elementary has RATS & waterpipes break — more than once. ASD is feeling growth pressures from the West and ignoring needs of Orem kids”

Shelton posted on the Stronger Together Facebook page, calling out Millett for posting that Parkside Elementary had rats and water pipes break – more than once. She also insinuated that Parkside no longer had specialty classes.

“These statements are all false and only serve to distort the true picture and demoralize the community. I have never seen a mouse, let alone a rat at Parkside. We are not infested with any kind of vermin,” Shelton wrote in response.

There was some flooding in the summer of 2021 due to sprinklers and clogged drains, but no pipes burst.

“We have never had a time we did not have specialty classes including having STEAM, computers, and music currently which includes our upper grade students learning the violin. Parkside is not a dilapidated, rat-infested, dump,” Shelton added.

When it comes to the bond, Michael Wankier and Paul McCarty — the DEC LLC team that did the Orem School District feasibility study — presented a variety of scenarios with potential financial outcomes on the bond with and without a new school district. They were presented at all three public open house meetings and have been placed on http://orem.org.

By state code, if ASD passes a $595 million bond and Orem splits from the district, Orem would still be obligated to pay its percentage of the first draw down of the bond as an Orem-only district would not become official until July 1, 2024.

Since the Orem School District issue has been active in the city, the council meetings have seen high attendance. It was different Tuesday.

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