Parowan Council OKs up to $12M Water Revenue Bonds to Repair Six Mile Spring

The Parowan City Council voted unanimously July 23 to approve Resolution 2026-12 authorizing a water-revenue financing package to fund rehabilitation of Six Mile Spring, construction of a filtration-based water treatment plant, and priority fire-flow distribution upgrades.

City Manager Dan Jessen explained the package is structured as a loan not to exceed $12,000,000 (the cap is about 20% above the anticipated ~$9.675 million bid to allow for higher-than-expected offers) paired with a $1,075,000 grant for a total project funding package of about $10.75 million. Bond counsel Eric Johnson described the terms as exceptionally favorable, saying the lender treats the interest as a 2% hardship grant assessment, and that the bonds will be issued on a taxable basis because of that structuring. The financing term was described as up to 30 years, with 35 years noted as a maximum parameter.

Jessen told the Council the Six Mile Spring has been offline for roughly two decades after a water sample taken during a high-runoff event failed to meet state standards. He said the spring currently yields approximately 150 gallons per minute compared with historical production of roughly 800–900 gpm and attributed the decline to a failure of the underground collection structure rather than an absence of water. "The collection structure is what has failed and needs to be rebuilt," Jessen said, and he added that the city is moving ahead with exploratory work and Forest Service re-permitting for the site.

The project also includes construction of a treatment facility sized for filtration to address turbidity and dissolved solids and to relocate the system's chlorination point. Council discussion and public testimony emphasized fire-flow needs: Douglas Fox urged careful attention to pipe sizing when extending service, citing a Cedar City example where an 8-inch line had been reduced to 6-inch and produced ongoing liability. Former Water Board member Steve Thayer, who said earlier estimates in his tenure were around $3 million, noted that costs have grown to more than $9 million in the interim and asked whether redevelopment could restore historical production. Jessen reiterated the city’s assessment that the water remains present and that rebuilding the collection structure is the path to restoring output.

Following the hearing and staff presentations, Councilmember David Burton moved to approve the resolution; the motion passed unanimously by roll call. The Council released bond counsel and financial advisor Marcus Keller from the meeting after the vote. The Council and staff said they will proceed with contracting and permitting steps and related project outreach.