Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Infrastructure Finance topic
No spam. Unsubscribe anytime.
Santaquin council approves up to $3.1 million bond for wastewater facility upgrade
Summary
City council adopted Resolution 07-03 authorizing sale of up to $3.1 million in sewer revenue bonds to help fund planned upgrades to the Water Reclamation Facility; council and city staff said most of the work will be paid with impact fees and sewer user revenues.
Santaquin City Council voted unanimously July 15 to adopt Resolution 07-03, a bond-parameters resolution that authorizes the city to issue up to $3,100,000 in sewer revenue bonds to fund part of an upgrade to the Water Reclamation Facility (WRF).
City staff said the full WRF upgrade is estimated at about $14,130,000, of which roughly $10,000,000 is available in cash. The bonds will cover the funding gap and would be repaid from sewer system revenues and, where appropriate, impact fees. Officials said the city intends to use impact fees “as much as possible” to lower the rate burden on ratepayers.
During the presentation, city staff and financial advisors described the parameters in the resolution: the council authorized bonds up to $3.1 million, a maximum term of up to 20 years in the parameters language, and an interest-rate cap set well above current markets (6 percent) so the city need not return to council if market conditions shift. Jeanette (Zions Bank Public Finance) told the council the market bids the city expects would likely price a 10-year sale in the neighborhood of 4.00–4.25 percent as of the meeting day. The city’s advisors said direct-purchase offers from institutional lenders would be solicited from a short list of potential purchasers.
Council members and staff discussed use of impact fees, prepayment (“call”) features, and the effect of growth on long-term system capacity. Staff said the city has averaged about $1 million per year in sewer impact fees over recent years and that the municipality would seek flexible call provisions so future revenues can be used to prepay bonds without penalty.
The motion to adopt Resolution 07-03 passed on a roll call vote: Travis — aye; Jeff — aye; Art — aye; Brian — aye; (motion seconded; vote recorded by mayor). Staff said construction financing will be refined after formal bids or direct-purchase negotiations.
What’s next: passage of the parameters resolution allows staff to solicit financing proposals and return to council with final bond documents and a recommended financing structure. City staff and the finance team indicated they will pursue the shortest reasonable amortization (10–20 years was discussed) consistent with market bids and borrowing costs.
Ending: The council’s action authorizes the city to begin the financing process; final terms and any bond sale will be brought back to council for approval before closing.
