Moab approves up to $3.5 million in water bonds for new 1.5-million-gallon tank

What was approved

Moab can borrow up to $3.5 million to help build a new 1.5-million-gallon water tank after the City Council voted 5-0 on Nov. 10 to set the terms for water and wastewater revenue bonds. City staff said the plan is to borrow $3 million through a state Board of Water Resources loan. ^[1][2][4]

Michael Black, presenting for city staff, said the extra $500,000 of authority is there in case bids come in higher, and that the city would not use it without the council's permission. ^[1]

Rate and repayment

An adviser from Zions Bank working with the city told the council the state board offered a 3.72% interest rate, and the resolution was revised to cap the rate at 3.72% instead of 4%. The adviser said borrowing in the open market now would likely cost more. The bonds can run up to 20 years, though the adviser said the city expects a 15-year term. ^[1]

Black said the bonds will be repaid from water rates. Black said a 5% water rate increase already approved for January will cover the payments, so no further increase is needed for the bonds. ^[1]

Other money for the tank

Black said the project also has a grant of more than $1.7 million from the Governor's Office of Economic Development that requires the project to be finished by the end of 2027, a deadline officials said could be extended again if needed. Black said the rest would come from the water enterprise fund, a share officials put at about $800,000. Officials also said the city has asked for a $1 million federal earmark that could cover it. ^[1]

Next steps

A public hearing on the bonds is scheduled for Dec. 8, and the city's draft schedule assumes the bonds close in early February, the adviser said. Bond attorney Darcy Stevens of Gilmore Bell said that if the final terms stay within what the council approved, designated city officers are authorized to sign the documents, and the bond team does not plan to return to the council. ^[1][3]

Other business

The council also approved buying two small parcels on East Center Street to gain legal access to the Whites Canyon detention basin, approved a franchise for fiber internet provider First Digital Communications, and adopted a Safe Streets for All safety plan and an updated water conservation plan, according to the meeting record. ^[4]