Lehi City Council Work Session: Affordable Housing Overlay and FY 2026 Budget Discussion - May 6, 2025

On May 6, 2025, at 4:03 PM, the Lehi City Council held a work session in the Council Chambers. All council members were present. The meeting focused on two main agenda items: a discussion of the SHARE (Sustainable Housing and Affordable Residential Environments) affordable housing overlay ordinance and a comprehensive review of the proposed FY 2026 budget. The meeting adjourned around 9:30 PM after extensive deliberation on both topics.

Discussion Items

SHARE Affordable Housing Overlay

• The council revisited the proposed SHARE overlay, which aims to increase affordable housing through density bonuses. Two main approaches were presented: (1) engineering's idea of allowing a 50% density bonus citywide on lots under 6,000 square feet as-of-right, and (2) a designated-location approach with a development agreement.
• Key points of debate included: location (anywhere in the city vs. designated areas), price point (goal of $400,000 vs. $500,000), design standards, and the need for a development agreement vs. as-of-right development.
• Council members expressed positions: Mayor favored a hybrid approach with citywide density bonus but a development agreement for design and quality. Councilmember Michelle supported allowing 50% bonus anywhere but requiring council approval for design. Councilmember Paul emphasized homeownership and deed restrictions. Councilmember Heather highlighted the importance of mixing affordable homes throughout the city, not in isolated pockets. Councilmember Chris argued that $400,000 is unrealistic for Lehigh and suggested $500,000 with more flexibility for developers.
• Staff presented examples of standard subdivisions (Grandeur Estates, Longhorn Meadows) to illustrate potential density increases and market impacts. The council also heard feedback from a developer (Flagship Homes) who expressed reluctance to pursue a development agreement due to risk.
• The council reached consensus on a hybrid approach: allow a 50% density bonus citywide (as of right for density), but require a development agreement to review design, quality, and price point. The price goal is $400,000, but developers may justify a higher price. Staff will rewrite the ordinance and return for another work session.

FY 2026 Budget Discussion

• The council reviewed budget requests from multiple departments. Key discussions included:
  • Literacy Center: Requested $73,000 for six months of staffing at a new satellite center; funded at $50,000 for four months (March–June).
  • Library: Requested eight part-time staff (later adjusted to six months), increased programming budget, and increased book budget. Only part-time staffing was partially funded; programming and book budget increases were not funded due to budget constraints.
  • Police: Current sworn officers: 67. Requested additional officers; only 3 of 6 requested were funded. Council expressed concern about understaffing compared to Orem (104 officers for similar population). The police chief noted that retention has improved and the department is using a shift-bid system to optimize coverage. The motorcycle program was discussed as a cost-effective traffic enforcement tool.
  • Fire: Requested an assistant fire chief and fire inspector; not funded. The fire chief noted that opening Station 84 increased administrative burden and slowed progress.
  • Parks and Recreation: Discussed purchase of an ice rink ($222,000 ongoing, with $150,000 additional in FY 2026, subsidized by ~$130,000 annually). The council debated whether to continue subsidizing the rink versus funding police. Also discussed phragmites control at Jordan Willows: proposed purchase of an aquatic mower ($263,000) to reduce fire risk and improve wetlands. Council showed interest but noted funding constraints.
  • Cycle Track (700 South): Staff presented options to improve the cycle track: concrete curbing ($735,000), precast barriers ($445,000), parking stops ($160,000–170,000), or purchasing a curb-and-gutter machine ($385,000) for future use. Council discussed aesthetics, safety, and resident feedback. No decision made; staff directed to gather more information.
  • Other departments: Power and Fiber fully built out. Streets and Water departments had requests for ADA ramps, a salt storage building, and fleet replacement. Fleet replacement of $13.6 million was not funded; only $1.4 million approved. A leasing strategy was discussed.
  • Administration: Requests for a communication specialist, website update, and internal auditor were discussed. The internal auditor position was conditionally funded pending sales tax revenue.
• Finance Director Dean noted that the budget uses one-time funds for one-time expenses, and that ongoing items must be matched with ongoing revenue. The proposed budget uses about $1.8 million of the $3.8 million surplus above the 30% reserve policy.

Key Outcomes

• No formal votes were taken; this was a work session.
• For the SHARE overlay: Staff will revise the ordinance to reflect the hybrid approach (citywide 50% density bonus with a development agreement for design and price) and present it at a future work session.
• For the FY 2026 budget: The council will hold a public hearing on May 13, 2025, and may have additional discussion before adopting the budget on May 27, 2025. Council members expressed interest in potentially reallocating funds to add more police officers, but no formal changes were made. The budget as presented includes $50,000 for the Literacy Center, partial police funding, and no funding for ice rink purchase or phragmites equipment, but those items may be reconsidered.
• The council directed staff to provide more data on police staffing ratios and to explore funding options for the cycle track improvements.
• The next meeting will include the public hearing on the budget.