Sept 2026 Public Hearing Culinary Water Project CIB Funding

Town Clerk

Sep 3

5 min read

The Hanksville Town Council convened its regular meeting on the 3rd day of Sep 2026 in conjunction with a PUBLIC HEARING in the Hanksville Community Center; meeting commenced at 6:00pm. (Notice of this public hearing was posted on the Utah Public Notice Website, Hanksville US Post Office, and Hanksville Community Center.)

Present: Mayor Jeffren T. Pei, Councilmember Mona Wells, Councilmember Robert Gilner (virtually) and Councilmember Shyann Alvey (virtually)

Absent: Councilmember Peter Devonshire and Maintenance Eric Wells

Employees: Clerk Lisa Wells and Treasurer Jessica Alvey

Public in Attendance: Brennan Rees - Ensign Engineering, Susan Wells, Charity Jackson, Margaret Re, Duke Alvey, Dan Thatcher, Jaron Jackson, Colton Roberts, Shanna Sellers, Sue Fivecoat, Connie Brown, Doug Roberts, Jason Linder, Jaqei Pei, and Marina Alexander.

Public Hearing opened at 6:18pm

Mayor Pei addressed the public regarding the purpose of this public hearing to discuss applying to the Permanent Community Impact Board (CIB) for funding of the Hanksville Town Culinary Water Project. The size, scope, and nature of the funding request will be discussed regarding this project and the public will be allowed time to comment on all aspects of this project.

Why the project is needed:

Existing storage - a 100,000-gallon tank built in 1978 and a 200,000-gallon tank built in 2001 - 300,000 gallons on paper.
Actual usable storage is about 260,000 gallons. The two tanks were built with their bases at the same elevation but different heights, so the small tank overflows before the large one fills.
State rules require 395,578 gallons (one full day of use for all connections, plus two hours of fire flow). That leaves the Town short by about 135,00 gallons.
Fire protection is the largest piece. Because Town buildings include motels, RV parks, cabins, and a school without sprinkler systems. 300,000 gallons must be reserved for fire flow alone.
The 1978 tank is near the end of its life. If it has to come out of service, the shortfall gets substantially worse.
The wells are fine - storage is the problem. This is a storage project, not a water supply project.

Scope, location, schedule and participants:

Build a new 500,000-gallon reinforced concrete tank on the south side of Town in the red hills area, at a higher elevation than the existing tanks.
Install transmission and distribution pipe connecting the new tank to the existing system near west Hanksville Park Road, PRV valves, metering, SCADA controls, site work access, drainage, and restoration.
Acquire property rights from SITLA and easements from private landowners, and complete environmental review, cultural resource coordination, geotechnical work, and permitting.
Schedule - funding, environmental review, land acquisition, and final design during 2026; bid advertisement after design and permitting; construction anticipated to begin in Spring 2027.
Who does the work - Hanksville Town as owner and applicant; Ensign Engineering for design and construction-phase services; a contractor selected by competitive public bidding; coordination with USDA Rural Development, CIB, Division of Drinking Water, Division of Water Rights, SITLA, and SHPO.

Project Cost:

Item	Amount	Notes
Construction	$2,685,000	Tank, piping, sitwork, appurtenances; includes 10% contingency
Engineering, environmental, land, permitting, administration	$565,000	Design, bidding, construction administration, resident representation, land
Total estimated project cost	$3,250,000	August 2026 estimate

Funding - and all financing scenarios

Current plan: USDA Rural Development is the principal funding agency, with a 75% grant of $2,437,500. That leaves a 25% system contribution of $812,500. CIB assistance is being requested to cover as much of that $812,500 as possible.

The CIB assistance can take three forms: a grant (no repayment), a loan (must be repaid with interest), or a combination of the two. Whatever portion of the $812,500 is not granted must be borrowed over 40 years and repaid from water rates.

The siize of CIB grant is what determines the water rate increase. A full grant means no increase attributable to this project. The smaller the grant, the larger the monthly increase.

If no CIB assistance is received, the Town would rely on USDA financing or other sources for the full $812,500 share.
Local funds: water system revenues or reserves may be used if needed. The Town’s preference is grants first, then available cash, then debt.

Affordability - what this means for water bills.

Basis for the numbers below: 188 equivalent residential connections, a 40-year loan term, a current base rate of $36.00 per month, a current average monthly bill of $48,63, and a Hanksville median adjusted gross income (MAGI) of $38,000.

CIB grant of match	Town borrows	Monthly increase per connection	New average bill	% of MAGI	Affordability
100%	$0	No increase	$48.63	1.54%	Strongest
80%	$162,500	$1.80 - $3.12	$51.75	1.63%	Strong
60%	$325,000	$3.60 - $6.23	$54.86	1.73%	Manageable
40%	$487,500	$5.40 - $9.35	$57.98	1.83%	Manageable
20%	$650,000	$7.20 - $12.46	$61.09	1.93%	Approaching limit
10%	$731.250	$8.10 - $14.02	$62.65	1.98%	Approaching limit

Every scenario stays below the 2% affordability threshold commonly applied to drinking water rates - from 1.54% of median income at a full grant to 1.98% at a 10% grant with 3% interest. Even the worst case remains within accepted affordability limits, and the Town is not being asked to accept an unaffordable rate under any scenario presented.
The increase attributable to this project is modest as a strong grant share. At an 80% CIB grant the typical bill rises by roughly $2 to $3 per month. At a 10% grant it rises by roughly $8 to $14 per month.
These figures reflect the project debt only.
No rates are being adopted at this hearing. These are planning figures for discussion; any rate change comes before the council separately. Repayment would come from water user fees - no property tax increase and no special assessment are proposed.

Special assessments and property taxes

Special assessments and property taxes are financing mechanisms available to municipalities through CIB.
The current financing plan does not propose a special assessment or a property tax increase for this project.
Repayment of any project debt is anticipated to come from water system user-fee revenues.

Public Comment invited on the need for the project, the tank and associated improvements, the cost, the CIB application, grant and loan financing, and potential rate impacts:

Sue Fivecoat - Will the tank be buried?

Brennan Rees - Ensign Engineering - This will depend on the geotechnical report but will be partially buried as much as possible. The tank will sit higher in elevation giving more pressure for the town.

Margaret Re - How many years to repay the loan? Will the rates come down at the end of the term?

Brennan Rees - Ensign Engineering - It will be a 40 year loan, which will also cover operating costs. The rate is not likely to decrease due to inflation over time.

Jason Linder - This rate increase doesn’t include future growth - new water users that will be added over the years.

Brennan Rees - Ensign Engineering - No, it does not include future growth.

Public Hearing portion of council meeting closed at 6:47pm