Parowan's water bonds: a $12 million ceiling, $9.675 million expected

Parowan's water financing involves several different numbers: a $12 million legal ceiling, an expected $9.675 million loan, and $1.075 million in principal forgiveness that the city's notice says will not need to be repaid. ^[1]

None of the records cited is a closing document. ^[1]

What the council authorized

The council's June 11, 2026 agenda listed "A RESOLUTION AUTHORIZING NOT MORE THAN $12,000,000 WATER REVENUE BONDS" as Resolution 2026-11A. ^[2]

The city's notice of public hearing and bonds to be issued, signed by the city recorder, says the council adopted a resolution that day allowing bonds "in an aggregate principal amount not to exceed twelve Million Dollars ($12,000,000)." It allows the bonds to mature in not more than 35 years and to carry a hardship grant assessment fee, in lieu of interest, of no more than 2.00% a year. ^[1]

The notice says the bonds are for improvements to the city's drinking water system and for issuance costs, and that a final bond resolution would be adopted later, with terms no higher than those maximums. The hearing was set for July 23, 2026, at 5:30 p.m. ^[1][6]

What the city expects to borrow

The same notice says the bonds "will not be issued in an amount in excess of $9,675,000," to be repaid over 30 years, "in which event the amount to be repaid will be approximately $13,173,615." ^[1]

It says the city has a commitment for $1,075,000 in principal forgiveness, in addition to the loan amount, "that will not need to be repaid." ^[1]

The notice also gives an estimated total cost of $16,695,645 if the bonds are held to the maximum maturity at the maximum fee rate. ^[1]

The notice says the city has no more than $1,043,000 in outstanding bonds secured by drinking water revenues. The fiscal 2025 audit lists $1,043,000 owed by the water fund on 2008 and 2013 bonds at June 30, 2025. ^[1][4]

The project

The Drinking Water Board's June 10, 2025 packet describes Parowan's request: a treatment plant for Six Mile Spring, replacement of a lead-jointed transmission line "to mitigate the public health threat from the lead joints," replacement of distribution lines and a SCADA control system. ^[3]

The project description lists 8,500 feet of 6-inch line to replace the Main Canyon Spring line and 4,700 feet of 8-inch line to replace 2-inch galvanized line that the packet says does not supply enough flow for fire protection. The total project cost is listed as $10,750,000. ^[3]

Board staff recommended a construction loan of $10,750,000 with $1,075,000 in principal forgiveness, for a repayable $9,675,000 at a 2.00% fee in lieu of interest for 30 years. The packet is a staff recommendation. ^[3]

Water bills and schedule

The packet's affordability model lists a current average water bill of $47.13 a month and a bill of $68.04 after the project under the recommended 30-year option. These are modeled figures, not adopted rates. ^[3]

The packet's projected schedule lists loan closing in February 2026 and the start of construction in March 2026, ahead of design completion in July 2026, plan approval and advertising for bids in August 2026, and bid opening in September 2026. It lists construction completion in November 2026. ^[3]

The city's proposed fiscal 2027 budget lists $8,665,490 in bond proceeds, $1,250,976 in state grants and $9,994,466 in capital outlay in the water fund. ^[5]