Davis County sets parameters for up to $6.2 million in bonds for South Davis County Library; public hearing set for June 17

The Davis County Commission on Tuesday approved a parameters resolution allowing the county to issue up to $6,200,000 in bonds to finance the South Davis County Library project and scheduled a public hearing for June 17 on the issuance.

The resolution sets a maximum maturity of 21 years, caps fixed-rate offers at 6% and establishes a 15% cap for any variable-rate component. The county will pursue a direct purchase approach that can be offered to up to 35 specific investors under SEC rules, the county’s financial advisor said.

Curtis Koch, Davis County controller, introduced the financing plan and said the county has been saving for the project since a tax increase was authorized in 2017. “We anticipate that the $4,000,000 has been saved since that time,” Koch said, adding that county officials do not expect an additional tax increase tied to the debt service.

Jonathan Ward, financial advisor with Science Public Finance, described the anticipated sale process and why the county included parameters for both fixed and variable rates. “These parameters allow us to go forward and sell the bonds within these parameters,” Ward said. “We would sell these directly to investors who wanna buy them. We will offer it to, no more than 35 specific investors as per SEC regulations… we don't get these rated. We don't incur some of the other public offering expenses that we would do, but the interest rate is oftentimes a little higher than if we were to do that.”

Ward said direct purchases may price roughly a half-percentage point higher than a public sale in current markets and explained why a variable-rate component (for example, fixed for 10 years then adjustable) was included as an option to attract buyers and allow refinancing flexibility.

The county expects to issue bid documents, solicit investor interest and receive bids in about two weeks, Ward said. Before the county can close on the bonds, a statutorily required public hearing must be held with at least 14 days’ notice; staff recommended returning to the commission June 17 for that hearing.

Commissioner Bob Stevenson moved to approve the resolution and Commissioner Loreen Kamalu seconded. The motion carried unanimously among commissioners present. The county clerk and controller will complete required notices and schedule the June 17 hearing, at which the public may comment on the bond issuance and whether the project competes with private enterprise.

The approved parameters: maximum principal $6,200,000; maximum term 21 years; maximum fixed interest rate 6%; maximum variable rate 15%; direct purchase to up to 35 targeted investors. The county’s finance team will return with the formal bond documents, solicitation results and the public hearing record before closing the sale.