Bringing natural gas to three east Juab County communities is one step closer, following votes by the three city councils Tuesday night to ask residents to endorse the proj-ect in a bond election.
Nephi, Mona and Levan will all conduct general bond obligation elections on Feb. 5 to determine if residents of the communities want natural gas service enough to bond to finance the project.Each of the three towns will have a separate ballot. Although they will vote on the same day, the bond amounts differ. Nephi will bond for the lion's share of the needed monies, 54 percent of the project cost.
The natural gas plan was Nephi's project to start with, said project manager Golden Mangelson. The other communities joined in when it became obvious it would be beneficial to the east side of the county to participate together.
"It would be a crying shame to bring natural gas to Nephi and exclude the other communities," said Nephi Mayor Robert Steele.
General obligation bonds have a lower interest rate than revenue bonds and are advantageous to communities with large projects. However, general obligation bonds must be approved by a vote of the public. Revenue bonds, on the other hand, can be approved by resolution by the community's governing body.
Larry Denham, a municipal financial consultant with Smith Capital Markets in Salt Lake City, attended each of the meetings with Mangelson to explain to the city councils the financing schedules for each of the communities.
"Nephi is a bit short of being able to finance the entire project with general obligation bonds," said Denham. A city, according to state law, can bond for 12 percent of its fair market value. However, the revenue bonds used to supplement the proj-ect, he said, would be for a shorter period.
Mona voted to limit the sale of bonds to $295,000, although the allowed amount of $298,848 could be raised.