Topic 4: Under state law, all Utahns would be responsible for $2 billion or more of public debt if the Lake Powell Pipeline is constructed.

What the Draft EIS says or doesn’t say:

  • BOR fails to analyze how a multi-billion-dollar project would affect citizens throughout the state, and the Washington County families and businesses who must eventually repay the state.
  • BOR expects the costs of the pipeline, including interest, would be financed by the state and repaid by Washington County residents. The financed costs are estimated at $1.590-1.643 billion, which is equal to a debt burden in Washington County of $8,700 per person if built-in 2020, $6,450-6,670 per person if built-in 2030 (lower in 2030 due to larger population).
  • BOR’s socioeconomic analysis covers only four counties (Washington, Kane, Coconino, and Mohave), ignoring how this project would affect Utah’s bonding limit.
  • BOR does not analyze the effects of different terms of financing, nor does it take into consideration recent events such as an economic recession resulting from the 2020 novel coronavirus pandemic.
  • BOR doesn’t acknowledge that education, social services, health care services, and public employment are already facing many challenges competing for funding, making paying for the LPP an even more significant burden for residents.

Why this is a problem:

  • The terms of financing have not been determined yet, so it’s difficult to assess the actual burden on the residents and the state.
  • The State of Utah’s audit 2019 found that the LPP’s financing terms in the 2006 LPP Development Act are vague, making the Lake Powell project’s financial viability questionable for the state and residents.
  • Already in 2020, the state has held five special sessions to address Utah’s expected budget shortfall due to COVID-19 pandemic costs and decreasing tax revenue.
  • The LPP would be a Utah project that will encumber state bonding capacity for decades, which means less funding for state needs such as education, highways, and public health.
  • The lack of transparency on costs is troubling for a public project of this size, especially considering how long this issue has been studied.
  • Lower than projected population growth would increase the debt burden per person and could make the project unaffordable for residents.
  • A 2019 Utah legislative audit found that Washington County’s ability to pay relies on growth, but low population growth caused by high repayment costs for LPP could make the project unaffordable.

Commenting guidance:

  • The DEIS is deficient because it doesn’t determine whether the LPP project is financially feasible for WCWCD.
  • The BOR doesn’t address the adverse economic effects of paying for the LPP on residents and businesses.
  • The BOR doesn’t address the economic impact on residents and businesses, especially low-income residents in Washington County who are faced with a quadrupling of water rates, doubling of impact fees, and property taxes going to WCWCD increasing by more than 50 percent.
  • BOR must disclose all of the actual costs of the pipeline, including the financing costs.

Personal Note/Experience:

  • Have you had personal experience living in a city or state that was financially overextended by a large project that was not needed? Share this experience in your comments.
  • Are you alarmed because the LLP will rob public dollars from other more pressing needs in our state like education, healthcare, etc? Express your concern in your comments.
  • How does this pandemic economy impact your concerns about the costs of building the LPP? Tell the BOR about your concern.