Santaquin's water bond schedule is labeled 125% but shows 120%

An appendix to Santaquin's fiscal 2025 annual financial report includes a 'Net Revenue Bond Requirement – Water Fund' schedule. It lists $630,000 in principal and $240,923 in interest, for $870,923 of debt service. The next line reads 'Required 125%' and shows $1,045,108. ^[1]

By The Ledger's arithmetic, 125% of $870,923 is $1,088,653.75. The $1,045,108 shown is 120% of the debt service, rounded to the dollar. ^[1]

The sewer schedule in the same appendix is labeled 'Required 120%' and shows $611,834. That is 120% of the sewer fund's $509,862 in debt service. ^[1]

The year before

The fiscal 2024 appendix follows the same pattern. The water schedule lists $624,000 in principal and $247,261 in interest, for $871,261 total, and a 'Required 125%' amount of $1,045,513. That is 120% of the total. ^[2]

That year's sewer schedule is labeled 120% and shows $611,357 on $509,464 of debt service. ^[2]

How the schedule counts net revenues

The fiscal 2025 water schedule starts with $4,835,594 of 'Operating Income' and adds $1,335,521 of 'Other Income.' It then adds $1,157,246 of depreciation, listed as 'Operating Expense Not Requiring Funds,' for $7,328,361 in net revenues. It reports $6,283,253 of net revenues above the displayed requirement. ^[1]

In the audited statement of revenues and expenses, $4,835,594 is the water fund's 'Total operating income' line, which adds up charges for service, connection fees and other operating income. Operating expenses of $3,966,985 are listed after it, including the $1,157,246 of depreciation. The statement reports net operating income of $868,610. ^[3]

The schedule's $1,335,521 of other income equals the water fund's $1,045,289 in impact fees plus $290,232 in interest, which the statement lists as non-operating income. ^[1][3]

The sewer schedule follows the same structure. It starts from $3,130,466, the total listed before $2,514,297 of sewer operating expenses, and adds $2,028,709 of impact fees and interest. ^[1][3]

Neither schedule shows operating expenses being subtracted. The records reviewed do not include the bond agreements. They therefore do not show how those agreements define net revenues or which percentage they require. ^[1]

What the auditor said

In its Oct. 31, 2025 report on bond compliance, Larson & Company said it had reviewed the city's compliance with its bond issues and was 'not aware of any areas of non-compliance with the compliance requirements contained in bond purchase agreements.' Its fiscal 2024 letter used the same words. ^[1][2]

The fiscal 2025 schedule of findings lists no financial statement or state compliance findings for the current or prior year. ^[4]