Centerville's budget authorizes up to $2.4 million loan to its Water Fund for Main Street waterline
Centerville's fiscal 2027 budget authorizes an interfund loan of up to $2.4 million from the Capital Projects Fund to the Water Fund. The May budget message tied the loan to replacing an aging Main Street waterline and proposed a 7% water rate increase to repay it.
Continuing story: Auditing Centerville
Centerville's fiscal 2027 final budget authorizes an interfund loan of up to $2.4 million from the city's Capital Projects Fund to its Water Fund, Finance Director Nate Plaizier told the council before it adopted the budget on Aug. 25, 2026, according to the minutes. [1]
The Capital Projects Fund had a $6,686,169 fund balance on June 30, 2025, according to the city's audited annual report. [4]
The project
City Manager Brant Hanson's budget message, dated May 5, 2026, describes replacing the waterline on Main Street from Jennings Lane to Chase Lane. It says that section of aging waterline has had a number of leaks in recent years and that a recent leak caused extensive damage to the road and cost over $100,000 in repairs. [2]
The message says staff recommended completing the project in fiscal 2027 because of upcoming construction on Interstate 15, and requests a loan from the Capital Projects Fund to pay for it. It says a 7% rate increase is proposed to repay the debt obligation of $2.4 million. [2]
The minutes of the Aug. 25 hearing do not record a council vote on water rates. [1]
Bidding
On March 13, 2026, the city posted an invitation to bid for the Main Street Waterline Replacement, Chase Lane to Jennings Lane, Project No. 25-171. The work covers culinary waterline pipe, laterals and meter pits in the Utah Department of Transportation right-of-way, designed by ESI Engineering. [3]
The invitation lists an engineer's opinion of cost of $1,700,000 for the total project and set the bid opening for April 1, 2026. [3]
The loan terms and the awards were approved in May, before the August budget adoption described above. [5]
The council's May 5, 2026 minutes record staff recommending a 10-year interfund loan from the Capital Projects Fund, then about $6.1 million, at 3.8% interest, with flexible drawdowns. The council changed repayment from annual to monthly and set a reconsideration range of 3.3% to 4.3% for the state treasurer's investment fund (PTIF) rate. After a public hearing with no comments, it voted 4-0 to approve a loan of up to $2.4 million for 10 years with monthly payments at 3.8%, to be reconsidered by the council if the PTIF rate rises above 4.3% or falls below 3.3%. That range is a trigger for reconsideration, not an automatic variable rate. The minutes say the loan carries no prepayment penalty. [5][6]
The same meeting's summary action calendar, approved 4-0, awarded the Main Street (SR 106) waterline replacement from Chase Lane to Jennings Lane to 3XL Construction for $1,393,748 and the water line materials to Ferguson Waterworks for $567,335.47. By the Ledger's sum the two awards total $1,961,083.47. That is not the project's full cost or spending to date, and the Ledger has not seen signed contracts or payments. The minutes still describe the proposed 7% water rate increase as awaiting a study, and nothing in these motions adopts it. [5]
An interfund loan moves money between two city funds; the Water Fund would owe the Capital Projects Fund. The $2.4 million is a maximum authorized amount, not money spent, and the $1,700,000 engineer's opinion of cost is an estimate made before bids. The Ledger did not review the budget's Water Fund detail pages.
Sources
- Centerville City Council · Minutes posted for Aug. 25, 2026 special meeting (approved Sept. 15, 2026)
- Centerville City · Fiscal 2027 final budget
- Centerville City · Invitation to bid, Main Street Waterline Replacement, Chase Lane to Jennings Lane, Project 25-171
- Centerville City · Annual Comprehensive Financial Report, fiscal year ended June 30, 2025
- Centerville City Council · May 5, 2026 minutes (interfund loan and bid awards; signed, approved May 19)
- Centerville City Council · May 19, 2026 minutes (approve the May 5 minutes)
Reporting by The Utah Ledger from the public records above. AI-assisted, checked against those records.