OGDEN -- Ogden city could issue up to $18 million worth of bonds to pay for a new water treatment plant and other storm sewer-related improvement projects throughout the city.
The city council voted to adopt two separate bond resolutions Tuesday night.
The first resolution authorizes the city to pay for a new water treatment plant at the top of Ogden Canyon, near Pineview Reservoir, possibly by issuing $13.7 million in bonds. The second resolution pays for storm sewer improvements along Harrison Boulevard by issuing $4.7 million in bonds.
The $13.7 million bond for the water treatment facility would have an interest rate of 4.7 percent and would be repaid over 30 years.
The $4.7 million storm sewer bond would come with an interest rate at approximately 4 percent and would be paid out over 20 years.
But for the water plant bond, both the total amount of the bond and the number of years it will be repaid could change before the bond issuance is finalized after an Aug. 20 public hearing on the matter.
Several members of the council voiced concerns to the city administration and its water rate consultant Lewis, Young, Robertson & Burningham, about bonding for such a high amount while the city's water fund balance holds more than $10 million.
Other iterations of the bond, which include lowering the repayment period to 20 years and decreasing the amount to $11.6 million will be considered by the council before a final deal on the bond is struck.
Ogden resident Dan Schroeder, who has followed and studied the city's water rate issue for several years, said he can't understand the logic behind issuing bonds that would ultimately cost the city millions in net interest payments.
"That's money that the city could instead spend on other needed infrastructure upgrades in coming years," Schroeder said. "Or refund to the citizens in the form of lower utility rates."
Ogden City Attorney Mark Stratford said bonding is required to keep a proper amount of cash on hand in case of decreases in revenue, increases in normal operating costs and any emergency expenditures.
Even though the 60-year-old water plant still provides safe drinking water, after six decades the facility does not meet current seismic codes and has some serious structural issues.
City officials say the plant has reached the point that repairing its defects has become more expensive than replacing it.