REQUEST FOR BIDS - COMBINED SYSTEM UTILITY REVENUE BONDS

South Davis Sewer District, Utah is soliciting bids from interested parties to purchase approximately $35,000,000 Combined System Utility Revenue Bonds that are being issued for sewer system improvements. Parties interested in submitting a bid to purchase the bonds should review the attached document and respond accordingly. Bids are due no later than 2:00 PM Mountain on Thursday, October 16, 2025.

See questions and responses regarding this request for bids below: 

Q1:  Has a parameters resolution already been adopted?  If so, what is the maximum interest rate?

A1:  Yes, the parameters resolution has already been adopted.  It was amended such that the highest interest rate is “not to exceed seven percent (7.0%) per annum and a variable interest rate of not to exceed fifteen (15%) (provided that in the event the Bonds are sold in a private placement and a default rate is required by the purchaser, such default rate shall not exceed eighteen percent (18.0%) per annum)”.

Q2:  What is the projected or proforma for WRR now that it is under OPAL control?  When do they project to break even?  It would be good to have a 5-year forecast of what WRR is to do profit or loss-wise.  Seeing the proforma will likely answer what the risk is that South Davis may have to pay on its moral obligation.

A2:  A pro forma is not available currently; however, back in June, the updated/amended Joint Operating Agreement was posted on EMMA (https://emma.msrb.org/P21930366-P21475374-P21925670.pdf ). Article 10 and 11 of the “Amended and Restated Resource Recovery Project Operating Agreement” describe the payment of operating expenses and financial statements in general.

Q3:  Is the District required to pay on more than 50% of the losses of WRR?

A3:  See response to Q2 above. 

Q4:  Please confirm, if WRR goes under, what is the District’s ongoing responsibilities?  My understanding is to just make good on the moral obligation and pay the annual debt service on the 2017A bonds, which they have not had to do to this point. Approximately $2.3MM a year.  The operating losses would cease if they shut down the WRR.

A4:  The ALPRO Bonds include a “Debt Service Reserve Advance” provision in which the District would receive notice from the trustee of any deficiencies in the Debt Service Reserve Fund and then direct its budget officer to submit an appropriation request from Board.

As to the final question, Article VIII of the “Amended and Restated Resource Recovery Project Joint Ownership Agreement” and Article 12 of the “Amended and Restated Resource Recovery Project Operating Agreement” describes the general terms and related information for a “wind-down event”.

Q5:  Would the District ever have to cover more than 50% of the annual losses of WRR?

A5:  Question is repeated from Q3.