Spanish Fork ready to bond for public safety site

SPANISH FORK — The Spanish Fork City Council passed a non-binding resolution Tuesday night that will enable it to move forward in issuing a bond of up to $14 million for a new public safety building.

The resolution does not authorize the city to issue the sales tax bond but does set some general guidelines the city must follow as it prepares to do so.

Those guidelines include limiting the bond to a maximum of $14 million, the interest rate to a maximum of 6.25 percent and the life of the bond to 20 years.

The council passed the resolution on a 4-1 vote, with Councilman Chris Wadsworth casting the dissenting vote. Wadsworth said he fully supports the idea of building a new public safety building but said the chosen course of action, a sales tax bond, would cut citizens out of the process because it does not require a public vote.

"Taxation basically comes down to us taking citizens' property, and we need to be very sensitive to that," he said. "I would like for them to have a voice in this, and that's what I've been struggling with in this."

Mayor Joe Thomas voiced the opinion, echoed by some other members of the city staff and council, that waiting for a public vote could be risky, given fluctuating interest rates.

"I absolutely favor having public input, but on this particular issue, I would favor bypassing a vote because I think if we wait until November, interest rates will be higher," he said. "I'm totally committed to saving money for the public, to my toes. I think there are so many citizens in this community that are burdened right now."

Thomas said he would welcome public input on where to put the facility and if it should be built all at once, or built as a shell and subdivided as needed to reduce up-front costs.

By issuing a sales tax bond, which does not require a public vote, the city uses its sales tax revenue as its designated source of repayment, but can pay off the bond using any source of city revenue. Sales tax bonds also make the city more likely to be given a higher credit rating when it issues the bond, thereby lowering insurance premiums.

A general obligation bond, the city's other main option, is directly dependent on property taxes, and can only be paid using property tax revenue. General obligation bonds require a public vote.