Davis County closes public hearing on $10 million private activity bond for KeyMac Inc.; formal action to follow

Alex Leonardi, an economic development staff member, told the Davis County Board of Commissioners on June 23 that KeyMac Incorporated is seeking use of a $10,000,000 private activity bond in the manufacturing allocation to build a new facility and that the county’s role would be limited to acting as a conduit for tax-exempt interest on the bonds. Leonardi said the financing would be provided by private lenders and the bonds are nonrecourse to county taxpayers.

“Because no local money is at stake, the return to Davis County is straightforward,” Leonardi said, summarizing staff’s rationale and saying the project would bring “over 50 new jobs paying above the local median individual income.” He also said the last private activity bond Davis County issued was repaid in 2016.

During the public hearing, a Farmington resident who identified himself as Eric Cochranz asked whether the $10,000,000 request was specific to KeyMac and whether other businesses could access remaining state capacity. Leonardi replied that the state issues private activity bonds in several categories and that the $10,000,000 is a cap a single entity may receive while other dollars remain available to other applicants statewide. He gave figures for state capacity during his remarks (the transcript shows both $472 million and $476 million in different places).

A commissioner moved to close the public hearing and approve item 6; the motion was seconded and commissioners said “aye.” Later in the meeting Scott Park, the county controller, requested clarification on the record and confirmed the motion made was to close the public hearing and that any formal approval of the bond would be taken at a later time. County counsel and staff confirmed that procedure.

Next steps described by staff include the county sponsoring the business in the state application and the state Department of Workforce Services (and other state reviewers) determining eligibility under federal tests for private activity bonds. Leonardi emphasized that the business would sign the note and pledge collateral, and that repayment responsibility rests with the company and its lender.

The public hearing was closed; the commission recorded the procedural motion on the record. Staff said a fuller, county-drafted franchise or bond authorization package and any formal approval documentation will be returned to the commission for final action at a future meeting.