Payson's sewer plant: $5 million more in bonds, a 64% debt share and an audit coverage figure The Ledger could not reproduce
Payson authorized up to $5 million in sewer revenue bonds in May to complete its sewer plant. Finance staff said about 64% of sewer operating revenue goes to debt service, and the audit's sewer coverage ratio for fiscal 2025 doesn't match the figures printed beside it.
Continuing story: Auditing Payson
Payson's City Council adopted a resolution on May 6, 2026 authorizing up to $5,000,000 in Sewer Revenue Bonds, Series 2026, to finance sewer system improvements, according to the city's May 18 notice. [1]
The notice sets a maximum term of 21 years, a maximum interest rate of 6.00% and a minimum sale price of 99%, pledges the sewer system's net revenues, and lists $61,977,000 in outstanding bonds already secured by those revenues. It estimates total debt service of $7,846,330 if the new bonds are held to maturity. [1]
At an April 29 work session, the minutes say, "The city will be issuing $5,000,000 bonds to complete the sewer plant project." On June 17, Councilmember Bob Provstgaard said the final $5 million for the sewer project had been approved, "keeping the project within budget." [2][4]
Debt service and coverage
Finance Director Cathy Jensen said at the April 29 work session that "64% of operational revenue for the sewer department goes to debt service," and that the city will have to review rates in the coming years "if they can't meet the 1.25% bond coverage," according to the minutes. [2]
The audit's statistical table of pledged revenue coverage, in thousands of dollars, shows fiscal 2025 sewer net available revenue of $3,480, principal of $1,806 and interest of $2,064, and prints coverage of 1.81. [3]
Dividing $3,480 by the $3,870 total of principal and interest gives about 0.90. The same calculation for water bonds reproduces the table's printed 0.88. The audit does not explain the difference, and the table does not state how the bond documents define coverage. [3]
Federal loan
The Environmental Protection Agency's pending-loans page, last updated Oct. 13, 2026, lists Payson's Water Infrastructure Rehabilitation and Reliability project as "Invited," which the page defines as invited to apply. Its description includes replacing drinking water, sewer and stormwater infrastructure and a wastewater treatment plant expansion. [5]
The April 29 minutes say no WIFIA projects were included in the tentative budget. [2]
The coverage comparison uses only the figures printed in the audit's statistical table. It is not a finding that any bond covenant was breached; the minutes' "1.25%" is quoted as written, and the bond documents' legal definition of coverage was not reviewed. An EPA invitation to apply is not a loan.
Sources
- Utah Public Notice Website · Payson City notice of public hearing and bonds to be issued, Sewer Revenue Series 2026 (May 18, 2026)
- Payson City Council · April 29, 2026 work session minutes (approved May 6, 2026)
- Payson City · FY2025 Annual Comprehensive Financial Report (Larson & Company, Dec. 3, 2025), pledged revenue coverage
- Payson City Council · June 17, 2026 minutes (approved July 1, 2026)
- U.S. Environmental Protection Agency · WIFIA pending loans
Reporting by The Utah Ledger from the public records above. AI-assisted, checked against those records.