Herriman replaces $7.6 million water-rights loan as Auto Mall land stays unsold

Herriman's City Council voted 5-0 on Aug. 26, 2026, to approve Resolution R36-2026, replacing an internal loan that the city's capital projects fund used to buy land in the Auto Mall project area. The outstanding balance as of June 30, 2026, was $7,609,747.55, according to the approved minutes. ^[1]

Under the new terms, the Water Rights Capital Impact Fee Fund lends to the General Capital Projects Fund for two years, with principal due at maturity and repayment due immediately upon sale of the Auto Mall land. Interest is set at the June rate of the state Public Treasurer's Investment Fund, and there is no prepayment penalty. ^[1]

Why the city bought the land

Councilmember Jared Henderson said the city borrowed from itself to buy land in the Auto Mall project area that was zoned for apartments. The minutes say the city "intervened under a time-limited agreement to prevent residential development and preserve the site for commercial use." Sale proceeds are to repay the loan. ^[1]

Finance Director Kyle Maurer presented the item. The minutes say the prior loan, "executed in 2020 for an original amount of $12.5 million, had expired." No one spoke at the public hearing. Henderson moved to approve, Councilmember Teddy Hodges seconded, and Councilmembers Terrah Anderson, Matt Basham, Henderson and Hodges and Mayor Lorin Palmer voted aye. ^[1]

Interest and the budget

The staff report in the meeting packet says, "As of June 30, 2026, the land has not been sold." It estimates interest at about $292,000 a year, using an illustrative rate of 3.84%; the actual rate depends on the state fund's June rate. ^[2]

The report says the interest "is not included in the City's Capital Improvement Plan and a budget amendment will be needed." The draft resolution in the packet takes effect June 30, 2026. ^[2]

The two-year budget adopted in June 2026 still showed the loan being repaid. Its water rights fund page lists the $7,609,748 loan through fiscal 2026 and none in fiscal 2027, and says, "The interfund loan is anticipated to be paid off in FY2026." ^[7][8]

Three due dates

The city's financial statements for fiscal 2020 and 2021 say amounts were due to be repaid to the Water Fund on June 30, 2021. ^[3][4]

The statements for fiscal 2022, 2023 and 2024 describe a promissory note effective June 30, 2020, with repayment in a lump sum on June 30, 2025, at 1% annual interest. ^[9][10][5]

The fiscal 2025 statements describe the same note with repayment "in a lump sum on June 30, 2026." The August 2026 staff report again says the loan was executed with a due date of June 30, 2025. ^[6][2]

Each of the notes from fiscal 2022 through 2025 also lists a 5% late fee for payment beyond a five-day grace period and 12% interest after that. The records reviewed do not say whether the due date was formally extended or whether those terms were applied. ^{[9][10][5][6]}

Land sales so far

The fiscal 2025 statements say portions of the land were sold on June 9, 2021, March 29, 2023, May 30, 2024, and May 30, 2025. Total proceeds of $4,883,881 were applied against the loan's principal and interest, leaving a balance of $7,609,748 at June 30, 2025. ^[6]