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Front Page » September 15, 2009 » Emery County News » Castle Valley Special Service District plans for bond ele...
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Castle Valley Special Service District plans for bond election on November ballot

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On this year's municipal election on Nov. 3, all citizens of the county that reside within the cities will vote on two separate tax questions concerning the Castle Valley Special Service District. The first question will ask voters if the District should be authorized to issue and sell $12.5 million of general obligation bonds over the next 10 years. These bond funds will be used to construct new facilities and replace old infrastructure. The second question will request that the voters continue the existing authorization of the operation and maintenance tax rate of .001 which is used for road maintenance and the day-to-day operation of the District.

The $12.5 million of general obligation bonds would be used to continue the District's existing construction program for capital improvements. The professional staff and board of the District have studied and weighed the needs of the various communities making up the District for water, sewer, secondary irrigation, road work, and curb and gutter.

A facility plan has been prepared looking into the District's and cities' needs for infrastructure improvements for the next 20 years. This study identified some $53 million of needed projects. The most critical projects will be identified in cooperation with the mayors and city councils of each community in the District and funded with the $12.5 million of voter approved bonds, should the bond pass.

Most of the new bond funds would be used for the construction of new roads and for construction of new curb and gutter. New storm drainage systems would be constructed along with new sewer lines which will be upgraded and extended into areas not presently being serviced. Old culinary lines will be replaced and new lines will be extended into areas not presently having service. Secondary irrigation systems will also be expanded and new screens will be constructed to help eliminate plugging problems.

The District proposes to issue and sell the $12.5 million of bonds without increasing property taxes. However, the taxes presently being paid for repayment of debt would be extended for a longer period of time. The existing debt of the District will be paid off in 2015. If the new bond issue is passed the final year of repayment would be approximately 2027. The bonds would be repaid without increasing the tax rate; however, the length of time that the taxes would be paid will be extended.

In 2001, the voters of the Service District authorized $12 million of general obligation bonds for similar purposes. All of the bonds were sold and projects built as intended. Some of the bonds were sold to the State of Utah at interest rates as low as 0 percent; also, more than $6 million in grant money was obtained and applied to the projects. As time has gone by, the District has retired most of this debt, so that at the present time, the final scheduled bond payment will be on Jan. 1, 2015. The District now estimates that the new bonds will be issued in such a manner as to pay them off within 18 years without any need to increase property taxes.

In the past, the voters of the District have approved four previous bond elections. In 1977 a bond for $5 million was approved, in 1981 a $15 million bond issue was approved, in 1994 a $10 million bond was issued, and in 2001 a $12 million bond issue was approved. In addition to the bond money issued, the District has been able to obtain approximately $26 million in grant and interest earnings, so that over $68 million has been spent on much needed projects to date. This new bond election will allow the District and each community to continue with the planned construction programs. Without the approval of the bond all of the District's construction projects would be stopped.

The administrative control board of the District has weighed various financing alternatives and feels that the voted general obligation bond is the most economical and cost effective method of financing the projects. It allows for citizen participation in the process and brings the lowest net interest cost on the financing. Bonds can be issued in series to dovetail into our existing debt service plan with no substantial increase in taxes. This is accomplished by extending the time frame of our existing short debt service plan. The use of general obligation bonds allows for the participation of the District's large industrial tax base in the repayment of the bonds. Currently, the industrial tax base accounts for about 83 percent of the District's total tax base.

The District will continue to seek low interest loans and construction grants from the State of Utah as appropriate. Wherever possible, the District will apply for federal and state grants to increase and leverage the use of the bond funds.

The other question that the voters will decide upon concerns the District's taxes that they use for the day-to-day operation and maintenance of District operations. A large portion of this tax money is also used for the maintenance of the city streets.

The District's budget for operating and maintenance has been largely supported by the previously voter approved property tax levy of .001. At this time, the voters are being asked to continue the same tax rate into the future. There is no tax increase, only the continuation of the existing tax already in place. This is extremely important to the District to be able to continue their existing operations.

The voters of the District have previously approved Operation and Maintenance taxes in 1976, 1985, and 2001. At the time these taxes were approved, they had expiration dates attached to them. This election will extend those expiration dates and allow the District to continue its normal operations. Again, no tax increase will be required but the existing taxes will be extended throughout the life of the District.

If this election does not pass, the District would have to significantly raise the current water, sewer, and secondary irrigation fees. The area currently enjoys some of the lowest water and sewer rates in the area. Also, the road maintenance program would not be funded and would have to be stopped.

The District plans to hold a series of public information meetings in each community within the District to give details and answer questions on these two tax election propositions. All citizens of Emery County residing in the District are encouraged to study each of the propositions carefully and come to meet with the District, your mayor, and city council to get your questions answered. The meeting schedule is as follows:

Meetings were held in Elmo, Clawson and Cleveland at their September meetings. They will meet in Ferron Sept. 24. at 7 p.m. In Castle Dale on Oct. 8, at 7 p.m. In Orangeville on Oct. 8 at 8:30 p.m. Emery-Oct. 13 at 6 p.m. Huntington Oct. 21, 6:30 p.m.

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