Clinton outlines $3.9M water bond tied to UDOT projects; engineer estimates $4.18 monthly rate increase

Clinton City officials told the council on Jan. 13 that upcoming UDOT roadway projects require replacement of aging water mains beneath state routes and recommended issuing a Board of Water Resources loan to fund the city’s portion of the work.

Contracted engineer Bridal Wilcox said Clinton’s main feeds running under several UDOT corridors were installed in the early 1980s and are approaching 45 years old, making coordinated replacement with UDOT’s road work the most cost-effective option. Wilcox estimated roughly $18 million in area infrastructure work, with the city’s portion concentrated at about $10 million and a recommended bond of roughly $3.9 million to $4.0 million to cover the remainder after state and grant contributions.

Wilcox told the council the Board of Water Resources’ parameters are an 85% loan and a 15% local match (about $688,000). The proposal discussed a Board loan of $3,900,000 at an estimated 3.09% interest rate over 15 years and a payment structure tied to scheduled UDOT payments. "We will get about $18,000,000 worth of infrastructure, and we'll need to bond to complete our project at roughly $4,000,000," Wilcox said. He added that the project’s annual debt service after completion (anticipated in 2027) is estimated at about $356,000, and staff projected a monthly water-rate increase of about $4.18 per connection to cover that obligation.

Bond counsel Nate Canova explained the legal steps: the project received preliminary approval from the Board of Water Resources in 2024, the board will be the bond purchaser, and the city will execute a master loan resolution, escrow agreement and purchase agreement before closing. Canova said the council’s public hearing is a condition to issuance and that the board will take final action in a subsequent meeting; he described the Board’s loans as market-driven and noted the city’s parameters resolution capped the maximum interest the city would accept at 4%.

Mayor Marie Doherty and City Manager Trevor Cahoon described Clinton’s water enterprise as a separate fund, paid for by utility fees rather than general tax revenue. Cahoon said the city is weighing the trade-offs between saving for projects and locking in current construction prices, noting that coordination with UDOT avoids later duplicative roadway reconstruction: "Sometimes bonding is appropriate because we can get today's price," he said.

During the public hearing, resident Laura Monterieth asked whether the bond would lead to a rate increase; another resident, Glade Montearth, asked why the city has not built a larger reserve fund to avoid future increases. Mayor Doherty and staff responded that the water fund's revenue sources are limited to utility fees and that staff will explore options — including whether any rate increase might carry a sunset tied to bond repayment — when the council considers a rate ordinance.

Next steps: the Board of Water Resources will take a final vote on the loan at a future meeting; the figures presented to council were estimates and Wilcox and Canova said final numbers and loan documents will be available before the city executes any agreement. The council did not vote on the bond issuance at the Jan. 13 meeting; it held the required public hearing and directed staff to proceed with the process.