The Utah Inland Port Authority has hit some snags in developing a way to pay for the first port-owned facility: a proposed transloading facility to ease the movement of imports and exports through Utah.
The authority unveiled the facility idea this summer, and at a Sept. 8 port authority board meeting, officials discussed the creation of a public infrastructure district (PID). It delayed a vote on resolutions related to the PID’s creation and the authorization of the issuance of related infrastructure bonds — up to $150 million — to finance the facility and some other infrastructure improvements.
A subsequent planned vote on the PID’s creation and the bond authorization was postponed by Jack Hedge, UIPA’s executive director, “in an attempt to bring this PID discussion back to merit arguments, and not further fuel the political fires.”
The postponement had been requested by Salt Lake City Mayor Erin Mendenhall and Salt Lake City Council Chairwoman Amy Fowler, who had several questions about the PID’s creation and financing and the infrastructure’s ownership and future maintenance.
The postponement also occurred while a group of people protested outside the port authority offices.
Hedge has said the facility would address the current inefficient movement of international containerized goods into Utah. The transloading facility would take inbound West Coast oceangoing containers arriving at the Union Pacific intermodal facility in Salt Lake City and transfer the contents to larger containers for domestic movement. For every three international containers coming into the transloading facility by rail, two domestic containers would leave for rail or truck movement.
In addition to the transload facility, other projects related to the PID are a renewable energy station and some rail infrastructure improvements.
Hedge said on Sept. 8 that the projects “are meant to fill existing gaps, current gaps, in the logistics network and logistics system that serves Utah and the Utah economy and frankly the economy of the entire Intermountain West, both in terms of imports and exports.”
The PID is seen as strictly a capital financing tool for the projects. About $94 million for construction costs would be repaid over time from the authority’s growth revenues. The current financing plan contemplates a total of $120 million of bonds — project costs plus capitalized interest, debt service reserve fund and issuance costs — at a combined interest rate of 4 percent to 4.25 percent to be repaid over 30 years.
In a response letter to the Salt Lake City officials, Hedge and Jill Flygare, UIPA’s chief operating officer, wrote that the PID would be a subordinate entity to UIPA and its board, that the PID could operate and maintain the created infrastructure, and that any new property taxes would require the consent of all of the property owners first.
“This tax, if ever approved, would not take away from SLC taxes or its general fund, or that of any other taxing entity in any way, as it would allow a property owner to self-fund infrastructure costs by imposing an additional tax or assessment,” the letter said.
Hedge and Flygare also stressed that current interest rates for bonds “are as low as they have been in 33 years” and that UIPA “would be derelict in its duty to not take advantage of these low interest rates.”
The letter concludes with a summary: “We hope this clarifies the issues raised. In summary, a UIPA PID fits well within UIPA’s mandate; it creates an entity focused on the key operations of its infrastructure, but yet still fully answerable to the UIPA board; and, moving forward with the bonds in an expeditious manner allows us to take advantage of currently low interest rates and is a wise course of action.”
A meeting to vote on the matter has not been rescheduled.