Lehi City Work Session Budget Review – May 11, 2026

The Lehi City Council held a work session on May 11, 2026, to discuss the proposed budget for fiscal year 2026-2027. The meeting covered departmental budget requests, a review of the electric cost and rate design, and a detailed discussion on whether to implement a property tax increase. After extensive deliberation, a majority of the council expressed opposition to a tax increase and directed staff to revise the budget accordingly, prioritizing employee compensation and critical public safety needs.

Discussion Items

• Electric Costs and Rate Design Study (Item B1): Joel reported that the Power Department had successfully replenished reserves after the 2022 wholesale power cost spike, using the Power Purchase Adjustment Clause (PPAC) over approximately three years. The PPAC is designed to cover wholesale fluctuations and is not intended to build capital reserves. The council discussed the difference between PPAC and base rates for capital projects.
• Power Department Budget: Councilmember Stallings asked about the impact if one-time requests were not funded. Brent explained that projects are standalone and would be delayed. Councilmember Newell noted that enterprise funds have more control over spending due to their own revenues.
• Fiber Budget: Shay reported that fiber take rate is just above 29% (target ~10,500 subscriptions, currently ~6,800). Councilmember Harrison suggested quarterly public updates.
• Economic Development: Marlon had no questions from the council.
• Streets Department (BJ Benson): BJ reviewed requests including a new 10-wheeler truck with wing plow (recommended over a bed sander replacement), nuisance tree budget increase of $25,000, a crack seal machine replacement, and new employee for concrete/asphalt crew. Council discussed the cost-effectiveness of outsourcing vs. in-house work.
• Engineering (Brad Cannes): Brad reported a new traffic engineer will start Monday, replacing Luke. No new budget requests.
• Water, Sewer, Drainage (Greg and Dave Norman): Greg requested $360,000 for a lift station upgrade, an additional water maintenance crew (4 employees) with a service truck, a satellite leak detection system ($150,000 one-time), and a booster station redundancy ($350,000). Dave Norman noted that the Willow Park utility extension would benefit future park improvements. Council expressed interest in understanding the difference between copper and poly service lines.
• Fleet (Jeremy): Jeremy explained that fleet is underfunded; $18 million was requested but only $5 million approved. Council discussed the challenges of vehicle procurement, idling costs ($292,000 annually), and the need for regular maintenance.
• Legacy Center (Dan): Dan presented requests including a feasibility/operations study ($100,000 for Legacy Center, potentially $150,000 with Curtis Center and outdoor pool), boiler replacement, fencing, and structural beam repair. The study would help prioritize renovations. Council debated the value of the study vs. direct renovation planning.
• Outdoor Pool Emergency: Dan reported that the outdoor pool liner failed; a $15,000 emergency budget amendment is needed to remove the liner and inspect the gunite for possible opening this summer. Council agreed to place the amendment on the next regular meeting agenda. The pool is 46 years old and a long-term replacement decision is needed.
• Curtis Center: Dan presented four options for utilizing the Curtis Center, ranging from minimal programming ($500,000+ subsidy) to full operation ($1.1-1.2 million). Council discussed potentially including it in the recreation feasibility study.
• Non-Departmental Items: Jason reviewed the chamber contribution ($12,000), Fox Hollow Golf Course bond payment ending 2027, dispatch costs, health insurance reserve fund, and employee wellness program. Council asked about credit card fees and the rationale for chamber funding.

Key Outcomes

• No Tax Increase Consensus: After a straw poll, a majority of the council (Stallings, Freeman, Newell, Harrison, Lockhart) indicated they are not in favor of a property tax increase for this budget year. Councilmember Lockhart emphasized that raising taxes should be a last resort after identifying all possible efficiencies. Councilmember Newell expressed concern about the impact on employee morale and retention if cuts fall on staff.
• Revised Budget Direction: Staff (Jason, Dean) were directed to prepare a revised budget with no tax increase, focusing on the following priorities:
  • Fund full fire wage increase (to reach competitive level; estimated $180,000 additional beyond current proposal) and defer the assistant fire chief position for one year.
  • Fund three additional police officers (two already in base budget, one additional) and support the AI tool trial ($84,000 one-time) for police efficiency.
  • Fund one part-time records clerk for police and one part-time court clerk for justice center (or one full-time clerk, with majority favoring one this year and one next).
  • Fund parks staffing (arborist/irrigation tech) if feasible within the no-tax budget; council recognized parks are understaffed.
  • Support one-time capital items: $15,000 for outdoor pool liner removal, $300,000 for Station 81 design study, and possibly the Legacy Center feasibility study (to be evaluated with a potential free study from another vendor).
• Outdoor Pool Budget Amendment: Council agreed to add a $15,000 budget amendment for the emergency liner removal to the next regular meeting agenda (May 12) to allow the pool to open by Memorial Day.
• Employee Compensation Discussion: Council discussed the 4% COLA/merit increase policy. Some members suggested exploring a bonus system or different allocation to reward performance, but no changes were made for this budget cycle. Council Chair Lockhart emphasized the need for better data on employee turnover and market comparisons.
• Future Meetings: The council will finalize the budget by the first meeting in June. Staff will incorporate council feedback and present a revised tentative budget. Council members will submit additional cost-saving ideas via email within 48 hours.