Spring City to set public hearing

on bonds for water improvements

 

By James Tilson

Staff writer

Mar. 8, 2018

 

SPRING CITY—Water and funding for it were the focus of the meeting of the city council in Spring City on Thursday, March 1.

The council scheduled a public hearing for April 5 to discuss the issuance of a Water Revenue Bond in connection with the ongoing culinary spring water redevelopment project.

The council approved “Resolution 2018-01, consideration for and adoption of Parameters Resolution authorizing the issuance of not to exceed $550,000 in Parity Water Revenue Bonds of Spring City.”

Councilman Neil Sorensen explained to the council that the resolution only approved the parameters resolution for issuance of the bond, not the issuance itself.

The resolution also called for a public hearing to be scheduled regarding the issuance of the bond and any impact it might have on the city’s private sector.

The issuance of the water-revenue bond is tied to the loan from Utah’s Permanent Community Impact Fund Board (CIB) that the city is taking out to partially fund the culinary spring redevelopment project.

The loan will be for at least $419,000, and will have a 1-percent interest rate.

Sorensen said because the city is taking on debt, it must issue a revenue bond.

As part of the public hearing on the water revenue bond, Sorensen said a discussion on city water rates would be needed.

Sorensen told the council Spring City water rates were the lowest in the Sanpete County, and in order to qualify for the federal grants and loans connected to the culinary spring redevelopment project, their rates would have to be raised.

The rates could be raised any number of ways, and all of those methods will be discussed at the public hearing.

In addition, Sorensen told the council the city is “going to need $25,000 a year to cover the bond.”

That amount works out to approximately $5 per month per house in Spring City, although it may not be allocated exactly that way.

Jim Phillips, Spring City’s deputy treasurer, reported to the council on the progress of the CIB loan and Community Development Block Grant (CDBG) grant applications.

Phillips said the engineering contract with Jones and DeMille had been signed, and the engineering work should be done by the end of March.

At that point, the project would be ready to accept bids.

Phillips is also working with the U.S. Forest Service for permitting. He said it is “progressing,” and it “appears to be on track.”

The CDBG application has been completed and submitted, requesting $250,000.

Phillips said Travis Kiehl at Six County Association of Governments (SCAOG) told him Spring City’s application scored the highest of any in the Six County area. Phillips told the council this news made him optimistic that the entire amount of their application would be approved.

Phillips also told the council the CDBG grant would be used to retire an existing water-system loan, which is at 4.5 percent.

This would lower the city’s debt-service payments and provide an immediate benefit to the city.

Dixie Earl, city recorder, corrected Phillips, saying because of requirements within the grant, the money must be used on the redevelopment project first. If there is money left over, the city plans to pay down the debt as much as possible.

At the end of the report, Mayor Jack Monnet said, “Jim has done incredible work, … and it has paid off tremendously for the city.”