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Show Previously, under the Granger Act, a municipality could issue revenue bonds without holding a general election. But after several cities experienced financial difficulties diffi-culties by overcxtending themselves them-selves through the issuance of bonds without the knowledge of the general public, lenders arc requiring an election before making municipal loans. Water Bond Must Be Approved A loan desperately needed to improve Park City's water system has been approved by FHA. All that remains before work can begin on the city's obsolete water system is the sanction by local voters of the issuance of $600,000 worth of revenue bonds. The city applied for the loan over two years ago, and at that time raised water rates to provide for the retirement of bonds which will secure the $600,000 loan. Because present water rates will generate enough revenue to pay back the five percent loan, there will be no increase in rates if the bond issue passes. Also, due to the fact that the bonds are of the revenue type, as opposed to general obligation, tax dollars cannot be used toward their retirement. Thus the loan will have no effect on present tax rates. The $600,000 generated by the loan will be used to upgrade worn out and corroded water mains in the older section of town, and to install meters on all service lines. The meters will ensure residents of fair charges, as they will only have to pay for water consumed, not a flat fee, as is now the case. City Manager Wayne Matthews Matt-hews said that the mains, many of which were put in over 50 years ago. are in an advanced state of rust and corrosion. "If something isn't done very soon," he asserted, "residents face the danger of dry faucets and contaminated culinary water." If the improvements are not made. Park City may also find itself in violation of the Safe Drinking Water Act when it becomes enforceable by the Environmental Protection Agency and State Board of Health, July 1977 for which there are substantial financial penalties. Even so, Matthews fears voters may associate the Tuesday call for a referendum on the loan with the sewer bond issue which was defeted June 8. "It is important that the voters understand we have already provided funds necessary to repay the loan, so it won't cost them a penny more," said Matthews. "The FHA has appropriated the money, but the general public must give it their okay. " |