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Council waives second reading to set public hearing for water loan that will fund new well
Summary
The council waived second reading on a resolution to authorize notice for a state loan to fund a new drinking-water well; staff will mail statutorily required notices to users and host a public hearing before final bond authorization.
The Nibley City Council on July 10 waived second reading for a resolution that initiates the public-notice process required by state law for taxable water revenue bonds and a low-interest loan to finance a new municipal well.
City and bond counsel explained that Utah statute requires public notice of the maximum loan parameters and a public hearing before municipal bonds or long-term loans may be issued. "The state code says before you can issue bonds, you have to get notice of the maximum parameters for the loan," bond counsel Eric Johnson told the council during the presentation.
Staff described the financing package now under application: grants secured from state agencies (approximately $1.2 million in combined grants described by staff), plus a Division of Drinking Water loan application for up to $3.5 million to fund remaining project costs. Because final bids are not yet in, the notice authorized by the council sets conservative maximum parameters for principal, interest-equivalent fees and maturity so the city can proceed to a public hearing. The council scheduled the required public hearing for July 31; staff must publish the statutory notice on the state public notices web site, the city website and post it at City Hall, and the lender has requested a mailed one-page notice to all water-utility account holders.
Council members asked staff to include a plain-language, one-page explanation with the mailed notice outlining why the city is seeking the loan and how the project fits into long-term water planning; staff agreed to add educational material and a link or QR code to more detailed project documents. City staff said the project has been in planning for about a year, that the city has identified a drill site and believes water rights are in place, and that the loan term would be 20 years under program rules. Counsel said the notice will show conservative maximums (for example, a longer maturity and slightly higher rate than anticipated) because bids are not yet final; the council will consider final authorization after the public hearing.
The council voted to waive second reading and call the July 31 public hearing; staff will mail notices to utility account holders, post statutorily required notices and return after the hearing for final bond/loan authorization.
