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County holds public hearing on up to $10 million in conduit bonds for Kihomac; no approval taken
Summary
Davis County held a public hearing on issuing up to $10 million in conduit industrial development revenue bonds for Kihomac Inc.; staff described the financing as conduit (business repays debt), projected 50+ local jobs, and Commissioners chose to defer final action to a future meeting.
Davis County Commissioners heard a public hearing on June 23 about issuing Industrial Development Revenue Bonds (conduit, private-activity bonds) for Kihomac Incorporated but did not take final action.
Deputy Director of Economic Development Alex Leonardi explained the County would act as a conduit sponsor for the proposed Series 2026 bonds, which have an advertised cap “not to exceed $10,000,000.” Leonardi emphasized that conduit private activity bonds do not shift repayment risk to the County; the applicant company bears the debt and provides collateral. Leonardi told the Commission the project is expected to strengthen the local aerospace and defense industry, construct a new building and create more than 50 jobs paying above the local median individual income, and also generate new local property tax revenue from the construction.
Leonardi said the federal government issues over $37 billion in private activity bonds annually and described Utah’s allocation to multiple categories; the minutes record the State allocation as both “$472 million” and later as “$476 million” during the discussion. Leonardi further described that roughly $56 million was referenced in meeting materials as set aside for small-issue manufacturing allocations; he characterized the $10 million discussed as a cap for a single entity rather than a guarantee that the full amount would be disbursed to that entity.
During the hearing, Farmington resident Erich Kocherhans asked whether the entire $10 million cap would go to Kihomac or whether the dollars could be used for other entities or housing. Leonardi answered that the $10 million is a cap for a single applicant and that remaining allocation could be used by other applicants or categories under State rules. The public hearing was opened and closed by unanimous motions; the minutes note it was initially motioned to close the hearing and approve Item 6 but that Commission members later determined action would need to be taken on a future date.
No final bond inducement, approval, or formal pledge of County backing was recorded in the minutes; the record indicates further action will be required before any bonds are issued.
