School District Would be Financially Viable and Sustainable

OREM, Utah (July 12, 2022) – The results of the 2022 Orem School District Comprehensive Feasibility Study conducted by an independent consultant were presented to Orem City Mayor David Young and members of the Orem City Council on Tuesday, July 12.

 

In addition to financial viability, the Comprehensive Study also reviewed and analyzed eight key areas, including school district growth, unresolved seismic safety issues, student test scores, Title I concerns, teacher pay and benefits, class sizes, student enrollment and local representation.

 

“We care about and want the very best for our students, teachers and taxpayers,” Young said. “That is why we are conducting the most comprehensive school feasibility study to date to determine what is in the best interest of Orem.”   

 

The following are four likely scenarios that were found in the Comprehensive Study. These scenarios are consistent with the financial forecasting models of previous studies. All scenarios are compared to a baseline forecasted result under which the district doesn’t split and there are no new bonds issuances:

 

  • If Orem does not create a new school district and the $595M bond proposed by Alpine School District (ASD) passes, all taxpayers within ASD would experience a 12.8% increase in property taxes.  The Orem taxpayers would be responsible for approximately $116M (19.44%) of the related debt but have no guarantee as to the amount of reinvestment that would be made into Orem schools (historically 13.3% of the bond allocations were directed to Orem from 2002 to 2021.)

 

  • If Orem creates a new school district and ASD does not pass the $595M bond, Orem residents would realize a forecasted 3.5% increase in property taxes. Residents of the remaining district boundaries would experience a 5.3% decrease in their property taxes.

 

  • If Orem creates a new district and ASD passes the $595M bond, Orem residents would realize a forecasted 3.5% increase in property taxes. Residents of the remaining district boundaries would experience a 10.6% increase in property taxes, as they would be obligated to pay for the $595M bond. All of the proceeds would stay with the remaining district but the Orem residents would have no debt obligation as to the $595M bond.

 

  • If Orem splits from ASD, and ASD bonds for $595M and the new Orem School District bonds for $125M (the approximate amount Orem would need to remediate seismic issues), Orem property taxes would increase approximately 17.3%, and the remaining district would increase 10.6%.  In this scenario, the proceeds from the $125M bond would remain 100% in Orem.

 

The following are some key findings from the Comprehensive Study:

 

  • From 2002 to 2021, Orem taxpayers contributed $910M to ASD in property taxes, with $627M allocated to the general fund to pay for school operations, and $283M used to build new schools and pay off bond debt. Orem schools only received $163M in bond allocations for capital improvements. Approximately $120M of Orem taxes subsidized the building of schools outside of Orem

 

  • If Orem creates a new school district, the new district would be represented by 7 local school board members, all living within Orem. These local representatives will decide important issues such as if the new district should have smaller class sizes, safer schools, higher teacher salaries/benefits and, enhanced specialty programs. The Comprehensive Study found that these decisions impact overall student performance and graduation rates.

 

  • According to a 2022 FEMA study, 12 Orem Schools aren’t safe and need significant seismic upgrades. Despite several of these issues having been identified in studies over the past 16 years, ASD has only remediated a handful of facilities in Orem, including demolishing Hillcrest and Geneva elementary schools.   

 

  • Alpine School District K-12 schools in Orem have experienced significant declines in student achievement. It is important to note there appeared to be an alteration and distortion of school testing and reporting provided by the ASD for the Comprehensive Study compared with the same student test scores reported by ASD to the Utah State Board of Education.

 

  • Orem school class sizes, which are 10-30% larger than those in the Provo District, may dramatically increase by 23% during the 2022-2023 school year as part of projections for the Alpine School District. 

 

  • The Comprehensive Study suggests that Title I students in Orem schools may not have the proportional access to district-funded Specialty Programs compared with schools in higher socio-economic communities outside of Orem.

 

  • A local Orem School Board would review local issues and determine how tax dollars are spent and would have greater oversight regarding the programs in Orem schools.

 

About the Comprehensive Feasibility Study

The Orem City Council voted unanimously in February to conduct the study, the third since 2006, to determine the feasibility of creating its own school district. In addition to a financial analysis, the council also wanted to consider and analyze the educational and safety aspects of a possible split from the Alpine School District. The feasibility study was conducted by Discovery Education Consultants (DEC), which is an independent consortium of leading financial and education auditors. DEC examined hundreds of records, secured county and state financial data, reviewed national and local studies, reviewed responses to GRAMA requests and public comments and performed a comparative of other similarly situated school districts. The group also conducted numerous interviews with dozens of school districts, school board members, elected officials, and other experts. The full 281-page report is available at https://orem.org/schooldistrictstudy/.

 

Additionally, public meetings to present and answer questions about the Comprehensive Study will be held on July 13, July 19, and July 28 at Library Hall in the Orem City Center. It is anticipated the Orem City Council will vote on August 2 whether to put the issue on the ballot for the November 8 general election to let voters decide whether to create an Orem School District.      

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